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Rainbows, Unicorns & Uncle Sam: Funding for your startup

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SBIR (Small Business Innovation Research) grants are viable source of funding for startups. They sound too good to be true, but it's a real program and an accidentally well kept secret.

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Rainbows, Unicorns & Uncle Sam: Funding for your startup

  1. 1. SBIR It’s Like The Easiest $$$ Eva! Rainbows, Unicorns & Uncle Sam: Free Money for your Startup by Nicholas Napp is licensed under a Creative Commons Attribution- ShareAlike 3.0 Unported License .
  2. 2. SBWhat? <ul><li>SBIR = Small Business Innovation & Research </li></ul><ul><li>Federally mandated grant program </li></ul><ul><ul><li>All agencies with $100M or more must set aside 2.5% of their budget for SBIR programs </li></ul></ul><ul><ul><li>$2+B in awards per year </li></ul></ul><ul><ul><li>For small, US based companies </li></ul></ul><ul><ul><li>DOD, HHS, NASA, DOE, NSF, DHS, USDA, DOC, ED, EPA, DOT </li></ul></ul><ul><li>Companion program for tech transfer opportunities (STTR) </li></ul>
  3. 3. Why Should You Care? <ul><li>Phase 1 is typically $100k - $150k </li></ul><ul><ul><li>Odds of getting a Phase 1 are ~1:8 </li></ul></ul><ul><li>Phase 2 is $500k or more </li></ul><ul><ul><li>Odds of getting a Phase 2 are 1:3 </li></ul></ul><ul><li>Phase 3… </li></ul><ul><ul><li>You’re on your own </li></ul></ul><ul><li>It’s a grant!!! </li></ul><ul><ul><li>No equity participation </li></ul></ul><ul><ul><li>Relatively few strings attached </li></ul></ul>
  4. 4. My Assumptions <ul><li>Too slow </li></ul><ul><li>Too stupid </li></ul><ul><li>Unlikely to be a fit for anything I was interested in working on </li></ul><ul><li>a.k.a. A Giant Waste of Time </li></ul>
  5. 5. The Reality <ul><li>Very Responsive </li></ul><ul><li>Program Manager very well informed </li></ul><ul><li>Some agencies have very broad mandates </li></ul><ul><li>Painful dotting of i’s and crossing of t’s </li></ul><ul><li>But a very viable funding source </li></ul>
  6. 6. Typical NSF Topics <ul><li>Very, very broad </li></ul><ul><ul><li>Biological and Chemical Technologies </li></ul></ul><ul><ul><li>Education Applications </li></ul></ul><ul><ul><li>Electronics, Information & Communications Technologies </li></ul></ul><ul><ul><li>Nanotechnology, Advanced Materials & Manufacturing </li></ul></ul><ul><li>[Click links to see detailed topic lists] </li></ul>
  7. 7. No Two Agencies Are The Same <ul><li>DoD & NIH have bigger budgets </li></ul><ul><ul><li>Phase 2 can be $1M or more </li></ul></ul><ul><li>Nasa tends to be very specific </li></ul><ul><ul><li>e.g. Glue for Space Shuttle tiles </li></ul></ul><ul><li>Different process, different procedures </li></ul><ul><ul><li>Application process </li></ul></ul><ul><ul><li>Budgets </li></ul></ul><ul><ul><li>Allowable costs </li></ul></ul><ul><ul><li>Overall goals </li></ul></ul>
  8. 8. Phase 1 / NSF Specific <ul><li>Feasibility Study, not a full product </li></ul><ul><ul><li>Research focused </li></ul></ul><ul><ul><li>High risk scientific research </li></ul></ul><ul><ul><li>Broad societal impact </li></ul></ul><ul><ul><li>Commercial potential </li></ul></ul><ul><li>Six Month Project </li></ul><ul><li>$150k budget, with strings attached </li></ul><ul><li>~30 pages in standard proposal </li></ul>
  9. 9. Timeline / NSF Specific May 2009 Initial contact with Program Manager Jun 9, 2009 Proposal due Sept 24, 2009 Request for additional info & conference call Oct 2, 2009 Conference call & decision to fund Nov 17, 2009 Formal notification Jan 1, 2010 Grant begins Jan 4, 2010 Money in bank (approx 2/3 upfront) June 30, 2010 Grant ends
  10. 10. Budget / NSF Specific * Mandatory allocations with set %’s & limits * * *
  11. 11. Metrics: Compare & Contrast PREVIOUS STARTUP MOVEABLECODE Time spent trying to raise money 18 months 1 month + waiting time VC Angel play (in principal) Yes Yes Within scope of NSF SBIR Yes Yes # Business Plans / Exec Summaries / PPT Decks 10+ / 15+ / 30+ 0 / 1 / 2 Meetings: Bullshit vs Productive 30 : 1 0 : 1 % of Soul Sold or Destroyed 25% 0% Actual Money Raised $20k $200k Equity given up ~15% 0%
  12. 12. Other Key Points… <ul><li>Takes a long time to write – you can’t do it in a week </li></ul><ul><li>Next NSF SBIR Deadline is June 10, 2011 </li></ul><ul><li>Attend an SBIR overview class </li></ul><ul><li>Many agencies have matching funds available </li></ul><ul><ul><li>NSF has $550k for $1.1M in investment or customer revenue </li></ul></ul>
  13. 13. Useful Links <ul><li>http://www.nsf.gov/eng/iip/sbir/ </li></ul><ul><li>http://zyn.com/ </li></ul><ul><li>& http://zyn.com/sbir/ </li></ul>

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