2. Sources of Funding for Startups
■ Investment
– Private Capital
■ Sales
– Customers
■ Grants
– Government
■ No matter what, you’re “selling” something
– Equity
– Product / Service
– Idea
3. What is an SBIR/STTR?
SBIR
Small Business Innovation
Research
■ 60% of work MUST be
done by small business
STTR
Small BusinessTechnology
Transfer Research
■ MUST Partner with a Research
Institution
■ 30% of work MUST be done by
a collaborating research
institution
■ 40% of work MUST be done
by Small Business
4. I want a
Grant!
Just like a customer or investor…
■ Funding agencies will work with you or
not based on their own Needs, Priorities
and Goals
Original Objectives of SBIR / STTR program:
■ Stimulate technological innovation
■ Use small business to meet Federal
research and development needs
■ Foster and encourage participation by
minority and disadvantaged persons in
technological innovation
■ Increase private sector
commercialization innovations derived
from Federal research and development
The
government
doesn't
care what
5. "TO PROVIDE FUNDING FOR SOME OFTHE
BEST EARLY-STAGE INNOVATION IDEAS --
IDEASTHAT, HOWEVER PROMISING, ARE STILL
TOO HIGH RISK FOR PRIVATE INVESTORS,
INCLUDINGVENTURE CAPITAL FIRMS."
- RobertTibbet, SBIR / STTR Program Founder
6. Image Credit: Charles W. Wessner PhD
U.S Federal
Government spent
$133.5 billion on
Research in 2013
In 2010, the SBIR and STTR programs collectively provided
7,104 awards, compared with just 396 seed stage deals
made by venture capitalists
Venture capitalists invested $29.4
billion in 3,995 deals in 2013
(copy credit: InteliSpark.com)
VALLEY OF DEATH
7. But my technology isn’t based on
government funded research…
■ That’s OK!
– It can help if it is though
■ As long as your technology innovation:
– Solves a significant problem or
– Addresses a substantial opportunity
■ That is in line with the research priorities of a
funding agency
8. Participating Agencies
Set aside program (% of total research budget)
SBIR:Any agency with $100 Million+ in research funding
STTR: Any agency with $1 Billion+ in research funding
9. Three Phase program
■ Phase I
– ProvingTechnical
Feasibility
■ Phase II
– Research and Development
■ Phase III
– Commercialization
Funding Levels vary by agency
■ NSF
– Phase I = $225,000
– Phase II = $750,000
■ USDA
– Phase I = $100,000
– Phase II = $600,000
■ NIH and DOD can be
substantially higher
10. How do I know if I should apply?
■ Do you just have a new product?
– Or do you have a technology driven innovation
■ NSF SBIR / STTR program looks to fund:
– High risk / high reward technologies
– Not incremental improvements
11. Where do I start?
■ Identify the appropriate agency for your technology
– Find specific program
■ There is a lot of publicly available data to help you
– Look at Request for Proposals
■ Look at the last few RFPs and see what’s changed
– Look at SBIR / STTR grants that have been funded
– Look at academic grants that have been funded
12. CONTACTTHE PROGRAM DIRECTOR
EARLY
■ They are there to help you
■ They want to receive good proposals
■ Speaking with them will help you gauge if your project is
appropriate for their program
– You might have a good project, but it probably wont get
funded if it isn’t pertinent to a specific program
13. Get Started Early
A competitive proposal takes over 100 person hours to write
■ Determine deadline
– Submission dates vary widely by agency
■ Identify your topic area 8 - 10 weeks in advance
– Focus on background research / concept development for a few weeks
– Register for all required websites
■ Develop solid concept / rough outline by 4 - 6 weeks in advance
– Start writing actual proposal and formulating budget
■ Leave time to revise
– This is where good proposals become great proposals
– You will almost certainly have to adjust your budget
■ Try to submit at least one day before the actual due date
– In case of technical issues
14. Do I really have a shot?
Success rates are low…
■ Approximately 15% for NSF SBIR / STTR
BUT, you can improve your odds:
■ START EARLY
■ Do your homework
– Customer discovery / validate need
■ Hire a grant writing professional
15. FOCUS ONTHE PROBLEMYOU ARE
SOLVING
■ Your proposal needs to be crafted as a compelling narrative
– Convince the reviewers the problem is real
– Position your technology as a logical and feasible solution to
said problem
■ Do not beTOO technical
– Do not get lost in the weeds
■ Don’t just list features and benefits
■ Don’t use too much jargon
16. KnowThy Review Panel
■ Understand what kind of people will be on the review panel
– Depends on agency, but typically either:
■ Primarily technical researchers
■ Combination of technical and commercialization experts
17. Strategic Research Partners
■ Even if you don’t have domain expertise
– You can gain credibility by working with an
academic or expert
18. The State of Indiana wants you toWIN
■ Resources / Information
– SBIR / STTR specialist
■ Matching State Funds
– Up to $50,000 for first three phase I awards
■ Letter of Support
Approximately $2.5 billion is awarded through this program each year.
The United States Department of Defense (DoD) is the largest agency in this program with approximately $1 billion in SBIR grants annually.
