Funding Your Idea Niches to Riches

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Funding Your Idea Niches to Riches

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Biotechnology, Energy, Medical Equipment, Software ... Specimen radiography. systems. Biolucent. MammoPad. Breast. biopsy. devices. Breast. specimen ... – PowerPoint PPT presentation

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Title: Funding Your Idea Niches to Riches


1
Funding Your IdeaNiches to Riches
Session sponsor
2
Niche Experts John P Waszczak, Raytheon -
SBIR/STTR Sandra DiCosola-Summit Contract
Management Government Grants and
Contracts Harry George, Solstice Capital -
Venture Capital Jill Malick, Wells Fargo Bank -
Commercial Bank Loans Emre Toker, Surgical Tools
Niches to Riches Success Story
3
Small Business Development Center Pima Community
College October 30, 2008
4
Most Likely Sources of Capital by Business Type
and Stage of Development
Small Business Development Center Pima Community
College October 2008
5
SBIR Program Funding
DOD History
2006 SBIR Budget
1.134B
M (FY06)
2.07B
1.134B
SBIR Program Phases
Distribution within DoD
Ph I, 6mo, 75K
Ph II, 18mo, 750K
Ph 0
Ph III, non-SBIR s
1.134B
Support the War Fighter
6
SBIR Program Evolution
  • 1982 Lab Technology Development Focus
  • 2000 Transition Assistance Program
  • 2002 Program Manager Pull
  • 2004 Primes Initiative
  • 2005 Presidential SBIR/ ManTech EO
  • 2006 Commercialization Pilot Program (CPP)
  • 2007 Integrated Tech Roadmaps Phase 0s

Major Changes in Past 8 Years!
7
Integrated Funding Plans
  • IRD Investment
  • SBIR/ STTR
  • ManTech
  • Plus-ups
  • CRAD/ ACTD/ BAA/ DACP/
  • VECPs/ IDIQs/ CRADA
  • TTI/ RTT/ RTI/ QRF/
  • Title III
  • SDD/ Qual/
    Production

Spanning the Valley of Death!
8
Keys to SBIR/ OPM Funding Success
  • PM 2 Pull
  • Work w/ Prime
  • Strategic Need ltgt Core Capability
  • Effective Match Making
  • Relationship, Trust, IP
  • Transition/ Cut-in Plan
  • Minimize Risk, P3I
  • TRL, MRL, BRL CRL
  • Business plan
  • Communicate!
  • Related opportunities
  • Possible Mentor Protégé
  • Supplier Development R6S

9
Working Together!
Win! Win! Win! Win!
10
Preparing for a Government Award
  • Government RD funding fits your business
    proposition
  • Technical and Business Management Team
  • Protection of your privately developed
    Intellectual Property well documented
    chronology, lab notebooks, IRD project in
    accounting records
  • Job cost accounting system time sheets!
  • Financial capability to perform, viable business

11
AZFAST Grants
  • 5K grants offered by Arizona Department of
    Commerce for eligible SBIR/STTR expenses
  • Small AZ technology companies with lt100 employees
    or lt 4M revenue
  • Use for grant writing/coaching, attend
    conferences or seminars (Pima SBDC SBIR Seminar
    12/9/08)
  • Next round opens 11/20/08 closes 12/18/08

12
Broad Agency Announcements(FAR 6.102 and FAR
35.016)
  • A competitive solicitation procedure
  • Agencies obtain proposals for basic and applied
    research
  • Topics are not related to the development of a
    specific system or hardware procurement
  • Can introduce innovation with a white paper
  • Open to all size businesses
  • Generally higher funding amounts

13
General Services Administration (GSA)
  • One of largest agencies in the federal government
  • Mission to simplify buying and to reduce costs
  • Negotiate multi-user contracts
  • Leverage the volume of the federal market to
    drive down prices
  • Multiple award schedules and single award
    schedules

14
Venture Capital
  • Venture Capitalist look for businesses with
  • Rapid revenue growth
  • Potential for significant returns on investment
  • Market dominance
  • Barriers to entry into industry
  • Professional, highly qualified management team

15
Venture and Angel Capital
16
SBA Loans
  • The Benefits
  • Access a full package of financial services to
    finance up to 90 of a business purchase,
    including the land/building, furniture, fixtures,
    and obtain working capital
  • Start, buy or expand a franchised business, make
    leasehold improvements or pay franchise fees
  • Purchase equipment, pay installation costs, or
    finance up to 100 of equipment costs
  • Fund accounts receivable fluctuations, hire
    employees, expand a business, finance a new
    project or take advantage of vendor discounts.
    Lines of credit are available up to 350,000.
  • Longer maturities and more flexible terms than
    most bank loans.

17
SBA 7(a)
  • Summary Information
  • Uses to purchase owner-user real estate,
    refinance balloons of owner-user real estate,
    equipment purchase, working capital, purchase
    existing business
  • Advance rates of up to 90 for real estate, 85
    for business acquisitions, 70 for start-up
    businesses
  • 7-10 year terms for non-real estate loans
  • Floating interest rate fixed rate is available
    for real estate loans with 3 year adjustment
  • Must have two years of industry management
    experience

18
504 Loans
  • Summary Information
  • Purchase owner-occupied commercial property
    tenant improvements
  • Advance rate is typically 90
  • Up to 30 year amortization (20 years on Community
    Development Corporations piece)
  • Terms of 10, 15 or 20 years
  • Fixed interest rate
  • Must have two years of industry management
    experience
  • Typical structure 10 owners equity, 50 bank
    financing, 40 Community Development Corporation

19
Find a niche in your market landscape
consistent with your resources
Consumer market
Niche market
CAPITAL EQUIPMENT PRODUCTS
MARKET
DISPOSABLE PRODUCTS (and/or SERVICES)
20
Study in detail your niche in the market
landscape
Screening mammo 50M women/year
Screening mammo systems
Biolucent MammoPad
Diagnostic mammo 5M women/yr
Breast biopsy devices
Diagnostic mammo systems
Therapeutic breast surgery 200K women/yr
Specimen radiography systems
Breast specimen container
CAPITAL EQUIPMENT PRODUCTS
MARKET
DISPOSABLE PRODUCTS (SERVICES)
21
Standard VC model



Think big!
22
Niches-to-Riches strategy
Tackle in increasing complexity technical,
regulatory, competitive, distribution,
23
Understand and utilize the SBIR process
SBIRs typically fund high-risk (futuristic) RD
projects. Always include in your high-risk SBIR
application a low-risk component that can be
readily commercialized.
EXAMPLE SBIR application proposed the
development of a very complex three dimensional
x-ray imaging system for breast surgery. One
component of the proposed system was a very
simple disposable plastic breast specimen
container (required for the 3-D imaging system to
work properly), for which there is an instant
market.
24
Niches to Riches Strategies
  • Overwhelming amount of work for the founder
  • Few to delegate to so use your time efficiently
  • Study your market niche
  • Understand and utilize the SBIR program
  • Define and plan for your exit point
  • Strive to build a company infrastructure that is
    not reliant on you (documentation)

25
Q A
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