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Breakout Session #2
                                       Overview of the
                                   SBIR and STTR Programs
                                                            by
                                   Sharon C. Ballard, President/CEO
                                        EnableVentures, Inc.
                                       Phoenix Convention Center
                                           January 26, 2012




                                                     EnableVentures, Inc.
                                                   You envision . . . we enable.™



“You envision . . . we enable.”™
                                           © Copyright 2003-2012. EnableVentures, Inc.   1
Innovation, US economy and small business


S    Small businesses create most new jobs
B    Business ideas validated, business practices
          imposed
I    High risk/high payoff innovations, globally
           successful new products
R    Research and development by our nation’s
          brain trust




                 © Copyright 2003-2012. EnableVentures, Inc.   2
Agencies in SBIR Program
•   Department of Agriculture (USDA)
•   Department of Commerce (DOC)
•   Department of Defense (DoD)
•   Department of Education (DoED)
•   Department of Energy (DOE)
•   Department of Health and Human Services (HHS)
•   Department of Transportation (DOT)
•   Environmental Protection Agency (EPA)
•   National Aeronautics & Space Admin (NASA)
•   National Science Foundation (NSF)
•   Department of Homeland Security




                   © Copyright 2003-2012. EnableVentures, Inc.   3
Small business requirements

• For-profit U.S. business
• 51% U.S.-owned and independently
     operated
  – NIH, DoE, NSF (25% of budget exceptions)
  – All other agencies (15% of budget exception)
• Small business located in the U.S.
• 500 or fewer employees
• P.I.’s primary employment with small
     business during project (SBIR)

                 © Copyright 2003-2012. EnableVentures, Inc.   4
SBIR Program phases
• Phase I
   Feasibility study (funded proposal effort)
   $150K, 6 months

• Phase II
   Research, Research and Development
   2-Years, $1M

• Phase III
   Commercialization stage
   Funding from non-SBIR Program funds


                  © Copyright 2003-2012. EnableVentures, Inc.   5
What is the Small Business
  Technology Transfer (STTR) Program?

• Team small businesses with research
  institutions
• Similar to SBIR Program
• Requires partnership with research institution
  – Universities, federal labs, private research institutes
• Small Business:  > 40% of Work
• Research Institute: > 30% of Work
• Only 5 Agencies: DoD, DoE, HHS, NASA, NSF
• .3% (2011) to .45% (2016)


                     © Copyright 2003-2012. EnableVentures, Inc.   6
STTR Program phases
• Phase I
   Feasibility study (funded proposal effort)
   $150K, 12 months

• Phase II
   Research, Research and Development
   2-Years, $1M

• Phase III
   Commercialization stage
   Funding from non-SBIR Program funds


                  © Copyright 2003-2012. EnableVentures, Inc.   7
SBIR vs. STTR Program comparison
                                                             SBIR             STTR
Set-Aside Budget (2009)                                       2.5%             0.3%
                                                           $2.315B            $131M
Award Guidelines
                          Phase I                    $150K, 6 mos          $100K, 12 mos
                          Phase II                 $1M, 18-24 mos          $1M, 24 mos
Subcontracts
                          Phase I                            <33%             <60%
                          Phase II                           <50%             <60%
Academic/Lab                                          Not Required            >30%
Component
Business Employment                                          >50%              n/a
of PI


                             © Copyright 2003-2012. EnableVentures, Inc.              8
Agency SBIR/STTR budgets - 2009

             DOD                                            1.36B
             NIH                                            672M
             NSF                                            110M
            NASA                                            127M
             DOE                                            155M
All Others: HSA, EPA, DOC, DOT,                             75.6M
          USDA, DOEd

              © Copyright 2003-2012. EnableVentures, Inc.       9
Agency differences

                                                    Contracts
                                                         Grants                 NIH-
       DOT                                                                     Grants
   NIH-Contracts
                    DOC                                                        USDA
      DHS
      NASA          EPA
                                         DoED

                                                                         NSF
       DOD
                     DOE




Narrow Topics                                                                  Broad Topics




                           © Copyright 2003-2012. EnableVentures, Inc.                   10
Schedule of SBIR/STTR solicitations
  • Each agency = own schedule
  • Schedules change each year
  • Different schedules for SBIR and STTR
  • Some = one solicitation; others =
       multiple solicitations
  • Some have multiple submission dates
       with one annual solicitation
  • Check each agency’s website



                © Copyright 2003-2012. EnableVentures, Inc.   11
Topics & solicitations
• Topics selected by agency
  –   You can contribute a topic idea!
• Proposals must be responsive to a topic
     or they will be screened out (no
     technical review)
• Topic lists published by each agency in its
     solicitation (Request for Proposals)
• Most agencies publish one solicitation
     per year; DoD and DHHS/NIH have
     multiple solicitations

                     © Copyright 2003-2012. EnableVentures, Inc.   12
Review processes by agency: who’s the audience?

            DoD                                                              Internal
           NASA                                                              Internal
            DOT                                                              Internal
             EPA                                                             Internal
            DOE                                                              External
            DHS                                                              Internal
            DOC                                                              Internal
             NSF                                                             External
           USDA                                                              External
           DoED                                                              Internal
             NIH                                                             External


     http://grants.nih.gov/grants/funding/sbir.htm, Overview of the SBIR/STTR Program
                               © Copyright 2003-2012. EnableVentures, Inc.              13
Discussions during open solicitations?
          DoD                                         Restricted
         NASA                                         Restricted
          DOT                                         Restricted
          EPA                                         Restricted
          DOE                                         Restricted
          DHS                                         Restricted
          DOC                                         Restricted
          NSF                                                 Open
         USDA                                                 Open
         DoED                                                 Open
          NIH                                                 Open


                © Copyright 2003-2012. EnableVentures, Inc.          14
SBIR success ratios

• Phase I
   Between 1 to 5 and 1 to 15
• Phase II
   Between 1 to 2
   and 1 to 3




                © Copyright 2003-2012. EnableVentures, Inc.   15
Who are winning SBIR/STTR awards?
            (DoD data)

                                            2008               2009
New Awardee                                  22%               20%
Prior Phase I only                           7%                7%
1-4 Phase II awards                          35%               32%
5+ Phase II awards                           36%               41%




                 © Copyright 2003-2012. EnableVentures, Inc.          16
SBIR/STTR firm size distribution
          (DoD data)

Number of Employees                              2008         2009
       1 to 9                                     39%         40%
       10-24                                      20%         29%
       25-49                                      14%         13%
       50-99                                      10%         10%
      100-249                                       7%        6%
      250-499                                       3%        2%


                © Copyright 2003-2012. EnableVentures, Inc.          17
SBIR/STTR evaluation criteria

• Technical merit
• Team qualifications
• Value to agency
• Potential for commercial
• Cost / cost realism




           © Copyright 2003-2012. EnableVentures, Inc.   18
Electronic proposal submissions
• Nearly all agencies now require
       electronic submissions
• Allow enough time -- weeks, not days
• Prepare for multiple site submission
       processes
• NIH: 20% of electronic submissions
       performed by service providers




               © Copyright 2003-2012. EnableVentures, Inc.   19
The government and IP rights
 • Worldwide “March-In” rights
 • Non-exclusive license
 • Royalty-free license
 • World-wide license (government not
   in business to commercialize)




             © Copyright 2003-2012. EnableVentures, Inc.   20
IP Considerations for SBIR/STTR ventures

•Rights in inventions
•Rights in technical data and computer software
      developed or provided under government
      contracts
•Protecting rights in information in proposals
•Protecting company-confidential information or
      trade secrets under FOIA
•Use of nondisclosure agreements
•Consider an IP Disclosure Plan
•Protecting IP rights in subcontracts and teaming
      agreements
•Retain the best counsel who know IP, licensing
      and FAR, DFAR
                   © Copyright 2003-2012. EnableVentures, Inc.   21
Key financial management &
      accounting requirements
• Financial capability to perform
• Adequate accounting system:
   – Time charging
   – Chart of Accounts
   – Budgets
• Job cost accounting:
   – Segregation of Project/Contract costs
• Reporting (internal and external practices)
• Billing, reporting, shipping and other forms
• Retain professionals who know these areas!
   – They are not so easy to find!


                   © Copyright 2003-2012. EnableVentures, Inc.   22
Program Tradeoffs -
            Sharon’s Personal Experiences
Advantages                                         Disadvantages
•   Payments on Time                               •      Slow Procurement Cycles
                                                   •      Contractual, Administrative
•   Pays for High Risk
                                                          Burdens, Negotiations
    Developments – Invests in
                                                            Delivery
    Research
                                                            Security
•   Desires Small Businesses to                             Billing
    Succeed – Resources

•   Validates technologies                         •      Shared Ownership of
                                                          Technology
•   No Equity
                                                   •      No Financial Privacy
•   Well-Defined Market




                             © Copyright 2003-2012. EnableVentures, Inc.                23
SBIR information sources
  http://www.zyn.com/sbir/
    http://www.sbir.gov
http://www.inknowvation.com/




          © Copyright 2003-2012. EnableVentures, Inc.   24
“Get Ready” for the SBIR Program
            It’s free!
  NEWS – Major Update Coming.

                        UP




          © Copyright 2003-2012. EnableVentures, Inc.   25

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A&D Conf Breakout Session #2

  • 1. Breakout Session #2 Overview of the SBIR and STTR Programs by Sharon C. Ballard, President/CEO EnableVentures, Inc. Phoenix Convention Center January 26, 2012 EnableVentures, Inc. You envision . . . we enable.™ “You envision . . . we enable.”™ © Copyright 2003-2012. EnableVentures, Inc. 1
  • 2. Innovation, US economy and small business S Small businesses create most new jobs B Business ideas validated, business practices imposed I High risk/high payoff innovations, globally successful new products R Research and development by our nation’s brain trust © Copyright 2003-2012. EnableVentures, Inc. 2
  • 3. Agencies in SBIR Program • Department of Agriculture (USDA) • Department of Commerce (DOC) • Department of Defense (DoD) • Department of Education (DoED) • Department of Energy (DOE) • Department of Health and Human Services (HHS) • Department of Transportation (DOT) • Environmental Protection Agency (EPA) • National Aeronautics & Space Admin (NASA) • National Science Foundation (NSF) • Department of Homeland Security © Copyright 2003-2012. EnableVentures, Inc. 3
  • 4. Small business requirements • For-profit U.S. business • 51% U.S.-owned and independently operated – NIH, DoE, NSF (25% of budget exceptions) – All other agencies (15% of budget exception) • Small business located in the U.S. • 500 or fewer employees • P.I.’s primary employment with small business during project (SBIR) © Copyright 2003-2012. EnableVentures, Inc. 4
  • 5. SBIR Program phases • Phase I  Feasibility study (funded proposal effort)  $150K, 6 months • Phase II  Research, Research and Development  2-Years, $1M • Phase III  Commercialization stage  Funding from non-SBIR Program funds © Copyright 2003-2012. EnableVentures, Inc. 5
  • 6. What is the Small Business Technology Transfer (STTR) Program? • Team small businesses with research institutions • Similar to SBIR Program • Requires partnership with research institution – Universities, federal labs, private research institutes • Small Business: > 40% of Work • Research Institute: > 30% of Work • Only 5 Agencies: DoD, DoE, HHS, NASA, NSF • .3% (2011) to .45% (2016) © Copyright 2003-2012. EnableVentures, Inc. 6
  • 7. STTR Program phases • Phase I  Feasibility study (funded proposal effort)  $150K, 12 months • Phase II  Research, Research and Development  2-Years, $1M • Phase III  Commercialization stage  Funding from non-SBIR Program funds © Copyright 2003-2012. EnableVentures, Inc. 7
  • 8. SBIR vs. STTR Program comparison SBIR STTR Set-Aside Budget (2009) 2.5% 0.3% $2.315B $131M Award Guidelines Phase I $150K, 6 mos $100K, 12 mos Phase II $1M, 18-24 mos $1M, 24 mos Subcontracts Phase I <33% <60% Phase II <50% <60% Academic/Lab Not Required >30% Component Business Employment >50% n/a of PI © Copyright 2003-2012. EnableVentures, Inc. 8
  • 9. Agency SBIR/STTR budgets - 2009 DOD 1.36B NIH 672M NSF 110M NASA 127M DOE 155M All Others: HSA, EPA, DOC, DOT, 75.6M USDA, DOEd © Copyright 2003-2012. EnableVentures, Inc. 9
  • 10. Agency differences Contracts Grants NIH- DOT Grants NIH-Contracts DOC USDA DHS NASA EPA DoED NSF DOD DOE Narrow Topics Broad Topics © Copyright 2003-2012. EnableVentures, Inc. 10
  • 11. Schedule of SBIR/STTR solicitations • Each agency = own schedule • Schedules change each year • Different schedules for SBIR and STTR • Some = one solicitation; others = multiple solicitations • Some have multiple submission dates with one annual solicitation • Check each agency’s website © Copyright 2003-2012. EnableVentures, Inc. 11
  • 12. Topics & solicitations • Topics selected by agency – You can contribute a topic idea! • Proposals must be responsive to a topic or they will be screened out (no technical review) • Topic lists published by each agency in its solicitation (Request for Proposals) • Most agencies publish one solicitation per year; DoD and DHHS/NIH have multiple solicitations © Copyright 2003-2012. EnableVentures, Inc. 12
  • 13. Review processes by agency: who’s the audience? DoD Internal NASA Internal DOT Internal EPA Internal DOE External DHS Internal DOC Internal NSF External USDA External DoED Internal NIH External http://grants.nih.gov/grants/funding/sbir.htm, Overview of the SBIR/STTR Program © Copyright 2003-2012. EnableVentures, Inc. 13
  • 14. Discussions during open solicitations? DoD Restricted NASA Restricted DOT Restricted EPA Restricted DOE Restricted DHS Restricted DOC Restricted NSF Open USDA Open DoED Open NIH Open © Copyright 2003-2012. EnableVentures, Inc. 14
  • 15. SBIR success ratios • Phase I  Between 1 to 5 and 1 to 15 • Phase II  Between 1 to 2 and 1 to 3 © Copyright 2003-2012. EnableVentures, Inc. 15
  • 16. Who are winning SBIR/STTR awards? (DoD data) 2008 2009 New Awardee 22% 20% Prior Phase I only 7% 7% 1-4 Phase II awards 35% 32% 5+ Phase II awards 36% 41% © Copyright 2003-2012. EnableVentures, Inc. 16
  • 17. SBIR/STTR firm size distribution (DoD data) Number of Employees 2008 2009 1 to 9 39% 40% 10-24 20% 29% 25-49 14% 13% 50-99 10% 10% 100-249 7% 6% 250-499 3% 2% © Copyright 2003-2012. EnableVentures, Inc. 17
  • 18. SBIR/STTR evaluation criteria • Technical merit • Team qualifications • Value to agency • Potential for commercial • Cost / cost realism © Copyright 2003-2012. EnableVentures, Inc. 18
  • 19. Electronic proposal submissions • Nearly all agencies now require electronic submissions • Allow enough time -- weeks, not days • Prepare for multiple site submission processes • NIH: 20% of electronic submissions performed by service providers © Copyright 2003-2012. EnableVentures, Inc. 19
  • 20. The government and IP rights • Worldwide “March-In” rights • Non-exclusive license • Royalty-free license • World-wide license (government not in business to commercialize) © Copyright 2003-2012. EnableVentures, Inc. 20
  • 21. IP Considerations for SBIR/STTR ventures •Rights in inventions •Rights in technical data and computer software developed or provided under government contracts •Protecting rights in information in proposals •Protecting company-confidential information or trade secrets under FOIA •Use of nondisclosure agreements •Consider an IP Disclosure Plan •Protecting IP rights in subcontracts and teaming agreements •Retain the best counsel who know IP, licensing and FAR, DFAR © Copyright 2003-2012. EnableVentures, Inc. 21
  • 22. Key financial management & accounting requirements • Financial capability to perform • Adequate accounting system: – Time charging – Chart of Accounts – Budgets • Job cost accounting: – Segregation of Project/Contract costs • Reporting (internal and external practices) • Billing, reporting, shipping and other forms • Retain professionals who know these areas! – They are not so easy to find! © Copyright 2003-2012. EnableVentures, Inc. 22
  • 23. Program Tradeoffs - Sharon’s Personal Experiences Advantages Disadvantages • Payments on Time • Slow Procurement Cycles • Contractual, Administrative • Pays for High Risk Burdens, Negotiations Developments – Invests in  Delivery Research  Security • Desires Small Businesses to  Billing Succeed – Resources • Validates technologies • Shared Ownership of Technology • No Equity • No Financial Privacy • Well-Defined Market © Copyright 2003-2012. EnableVentures, Inc. 23
  • 24. SBIR information sources http://www.zyn.com/sbir/ http://www.sbir.gov http://www.inknowvation.com/ © Copyright 2003-2012. EnableVentures, Inc. 24
  • 25. “Get Ready” for the SBIR Program It’s free! NEWS – Major Update Coming. UP © Copyright 2003-2012. EnableVentures, Inc. 25