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Funding Technology Development for Commercialization


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Title: Funding Technology Development for Commercialization

Funding Technology Development for
  • SBIR/STTR Small Business Innovation Research
  • Clarkson University

Reasons to Be Interested in SBIR
  • Non-profit research funds at risk
  • Congress demands return on investment for RD
  • Commercialization can reap rewards for
    corporations as well as non-profit organizations
  • Intellectual assets
  • Royalties, new venture partnerships

Things to Keep in Mind
  • Commercial application is the focus
  • Provides good ROI evidence
  • Market and customer need is the driving force
  • Economic prosperity for the U.S.
  • Job creation
  • Richer tax payers
  • Keep the U.S. globally competitive

Government Performance Results Act
  • 1993 legislation to improve government
    performance with performance reports due from
    federal agencies on March 31, 2000
  • Each agency will have a mission statement, major
    goals, plan for achieving goals, and description
    of key external factors

Watch the Trail Blazers for Program and Policy
  • What NSF does first is usually seen 1-2 years
    later in other SBIR agency programs
  • Navy (Office of Naval Research) is the innovator
    in the Dept. of Defense

NSF response to GPRA
  • Enable the U.S. to uphold a position of world
    leadership in all aspects of science, mathematics
    and engineering
  • Promote discovery, integration, dissemination and
    employment of new knowledge in service to society
  • Achieve excellence in U.S. science, math,
    engineering and technology education at all levels

NSF response to GPRA
  • Focus on
  • Discoveries
  • Connect discoveries to society
  • Workforce of scientists and engineers
  • Math and science national standards
  • Information dissemination

New Merit Review Criteria
  • Research
  • Quality
  • Study directed toward application
  • Research Impact
  • Commercialization

What NSF Favors
  • High-risk, high payback innovations rather than
    evolutionary advances
  • Tied to the NSF mission - advancements in
    science, math, engineering
  • Commercial potential (consideration given to
    firms past track record)
  • Promote partnerships

  • What are SBIR and STTR, and what do they fund?
  • How To Apply
  • What Do You Need To Know About Writing the

What does SBIR/STTR fund?
  • Exploitation of scientific breakthroughs
  • Innovation through the use of emerging
  • Novel application of existing technologies
  • New capabilities or major improvements to
    existing technologies

What does SBIR/STTR fund?
  • Health-related areas
  • Clinical treatment research
  • New therapies
  • Pharmaceutical development
  • Clinical trials and drug evaluation studies
  • Diagnostic and prognostic equipment and tools
  • Genetics
  • Informatics
  • Prevention techniques, education, training

What does SBIR/STTR fund?
  • Education-related areas
  • Math, Science, Engineering
  • Interdisciplinary research
  • Treatments and Prevention
  • Cancer
  • Drug and Alcohol
  • Mental Health
  • Technology to improve teaching and learning
  • Adaptive Learning Systems (web-based)

Examples from NIH - NIA
  • Role of nutrition in determining longevity
  • Development of non-invasive research and test
  • Social, behavioral, environmental and/or
    technical interventions on the individual for
    health maintenance and disease/disability
  • Biosensors and prosthetic devices to aid sensory
    and memory dysfunctions

Examples from NIH - National Cancer Institute
  • Identification of genes associated with the
    process of metastasis
  • Combinatorial library approaches for gene
    function analysis
  • Development of educational intervention software
    packages for women and minorities exposed to
    occupational carcinogens

Examples from National Science Foundation
  • Four Broad Areas of Technology
  • Advanced Materials and Manufacturing
  • Biotechnology
  • Electronics
  • Information-Based Technologies

Examples from National Science Foundation -
  • Agriculture and food biotechnology
  • Marine biotechnology and aquaculture
  • Industrial bioproducts - enzymes,
    neutraceuticals, bioreagents, biopolymers, etc.
  • Biosensors, biomaterials, bioprocessing,
  • Biomedical engineering
  • Tissue engineering Metabolic engineering
  • Pharmaceutical drug delivery
  • Biomolecular nanotechnology, genomics
  • New emerging developments in biotechnology

Examples from National Science Foundation -
  • Materials for Next Generation Vehicles
  • Membrane research, surface engineering
  • Catalysis Separation, purification
  • Structural materials Nanostructures
  • Harsh environment performance
  • Technologies that address materials failure and
  • Electronic application Environmentally conscious
  • Advanced manufacturing processes, equipment

NSF Information Technologies
  • Applications
  • Social, behavioral and economic science
  • Education
  • Teaching and learning
  • Higher education
  • Assistive technology - human-computer interfaces
  • Mathematics, computers and computation
  • Information systems
  • Storage, delivery, transmission
  • Robotic systems

Department of Commerce
  • NOAA
  • Atmospheric sciences
  • Ocean observation systems and living marine
  • Cartography and photogrammetry
  • NIST
  • Materials, intelligent control
  • Measurement and standards
  • Integration of manufacturing applications

Department of Defense
  • Simulation, training
  • Faster, lighter, cheaper materials and equipment
  • Command, control, communications
  • Battlefield warfare Information warfare
  • Battlefield survival and medical items
  • Chemical, biological, nuclear weaponry and
    defense or detection systems

What is SBIR?
  • Federal Legislation
  • Federal Incentives
  • Phases I, II, and III
  • Eligibility

Three Phases of SBIR
  • Phase I Scientific and technical feasibility
    (Six months)
  • Phase II Concept refinement, generally leading
    to prototype (Two years)
  • Phase III Commercialization (non-SBIR
    funded phase)

History of SBIR Program
  • 1982 - Congress passed the Small Business
    Innovation Development Act
  • 1986 - Reauthorization
  • 1992 - Congress extended SBIR and created STTR
  • 2000 - Up for renewal in September

Purposes of SBIR/STTR
  • To stimulate technological innovation
  • To use small businesses to meet federal research
    and development needs
  • To encourage participation by minority and
    disadvantaged persons in technological innovation
  • To increase the commercialization of products and
    services from federal RD assistance
  • To emphasize private sector commercialization of
    SBIR research

What is STTR?
  • Small Business Technology Transfer Program
  • Created in 1992
  • Cooperative RD between small business and
    research institutions
  • Joint venture introducing entrepreneurial skills
    to high-tech research efforts

Three Phases of STTR
  • Phase I
  • Awards up to 100,000 for up to one year
  • Explore scientific, technical, commercial
    feasibility of an idea or technology
  • Phase II
  • Awards up to 500,000 for two years
  • RD work performed and commercial potential
  • Phase III
  • Non-STTR funding to move from lab to market

SBIR/STTR Differences
  • SBIR
  • 10 agencies participate
  • Two-thirds (minimum) of funds spent inside the
  • One-third spent on outside consultants or
  • SBIR is 2.5 of external RD budget - FY 99
  • STTR
  • 5 agencies participate
  • Company performs at least 40 of work
  • Research institution performs at least 30 of
  • STTR is 0.15 of external RD budget - FY 99
  • Allocation of Rights agreement required
  • Phase I term is up to one year
  • Topics may be limited, different cycle than SBIR

Agency SBIR/STTR Differences
  • RD topic areas
  • Award size
  • Proposal review process
  • Proposal success rates
  • Type of award (contract or grant)
  • Number and timing of solicitations
  • Other details
  • Profit or fee allowed
  • Phase I to Phase II gap funding
  • Payment types and schedule, etc.

Eligibility for SBIR/STTR
  • American-owned,independently operated
  • For-Profit business less than 500 employees
  • Not dominant in the proposed field of operation
  • The Principal Investigator is employed by the
    business over 50 time (SBIR)
  • Research space must be available to and under the
    control of the SBIR grantee for the companys
    portion of the proposed project

STTR Qualifications
  • American-owned, independently operated
  • For-profit
  • Principal researcher need not be employed by
    small business
  • Company size limited to 500 employees (no size
    limit for non-profit research institution)
  • Research Institution must be in U.S.

  • How Do I Apply?
  • Identifying Topics
  • Contacting Agencies
  • Preparing the Proposal
  • Following Up
  • Resubmitting

How Do I Apply?
  • 1. Identify topics funded by each agency
  • that relate to your companys RD interest
  • Link from http//
  • Links to SBIR Info Sources
  • SBIR Solicitation Schedule
  • STTR Solicitation Schedule
  • New York State SBIR/STTR Guidebook

Agencies Offering SBIR and STTR Awards
  • Ten SBIR agencies and five STTR agencies
  • Department of Agriculture
  • Department of Commerce
  • Department of Defense - also STTR
  • Department of Education
  • Department of Energy - also STTR
  • Health and Human Services - also STTR
  • National Institutes of Health
  • Health Care Financing Administration
  • Department of Transportation
  • Environmental Protection Agency
  • National Aeronautics and Space Administration -
    also STTR
  • National Science Foundation - also STTR

Number of SBIR Awards - FY 97
  • Department of Defense 2,154
  • Health and Human Services 1,076
  • NASA 529
  • Department of Education 421
  • National Science Foundation 389
  • Department of Energy 286
  • Department of Agriculture 102
  • Department of Commerce 88
  • Environmental Protection Agency 63
  • Department of Transportation 48
  • Lesser award amounts

SBIR Funding Agencies
  • For SBIR - 2.5 allocated from agencys
    extramural RD budget
  • Over 1.1 Billion in FY99
  • DOD 45 of dollars in the SBIR program
  • HHS 25
  • NASA 13
  • DOE 8
  • NSF 5
  • EPA, USDA, DOC, DOT, DoEd 4
  • For STTR, FY99 funding Over 65 million

How Do I Apply?
  • 2. Review Solicitation information
  • Presolicitation Announcements
  • SBIR/STTR Solicitation Schedules
  • Guidelines
  • Requirements - technical and personnel
  • Award amounts
  • Application and submission details
  • Forms and budget guidelines
  • Research funded in the past
  • Sample or model proposals

How Do I Apply?
  • 3. Contact each agency
  • Treat each agency as you would treat any customer
    - market to them
  • Learn why the agency is funding the topic
  • Technical questions before Release Date
  • Only administrative questions after release
  • DOD has a pre-release period
  • HHS and Agriculture not concerned about release
    date restrictions

Preparing to Sell Your Idea
  • Homework - Search the Literature
  • Your own field of expertise and alternatives
  • Key application areas, existing patents
  • Potential market opportunities
  • Brainstorming/Teamwork

Preparing to Sell Your Idea
  • Evaluating the Topic Fit
  • Identifying the Projects Theme
  • Contact SBIR/STTR people in the off season
  • Know how your approach is different from
    competing technologies

Write for Your Reviewer
  • Quality appearance of proposal
  • Holds interest and is easy to read
  • Dont make reviewer dig for information
  • Highlight key issues
  • Use pictures, tables and figures
  • Select topics that are new and innovative, not
    already in the public domain

Preparing a Phase I Proposal
  • Elements of the Application
  • Abstract
  • Identify the problem and your solution
  • Why the problem is important
  • Why the solution will work
  • Your methodology and qualifications
  • Expected results and benefits

Preparing a Phase I Proposal
  • Elements of the Application
  • Technical Description and Work Plan
  • Background
  • Technical approach
  • Objectives
  • Task descriptions
  • Schedule, e.g., Gantt and PERT charts
  • Deliverables

Preparing a Phase I Proposal
  • Personnel and Facilities
  • Principal Investigator and Key Personnel
  • Industry Partners and Recognized Consultants
  • Commercial Potential, Anticipated Benefits
  • Plans for Phase II
  • Budget and Justification
  • Commercialization Planning
  • Who will benefit, who will buy
  • Identify a pathway to commercial use

Qualifications of Personnel
  • Persuade reviewers of PIs qualifications
  • Describe contributions of consultants
  • Describe what each will do, when, and relation to
    the research goals
  • Select the right consultant
  • Letter from consultant stating contribution
  • Condense biographies to relevant information

Preparing a Proposal Budget
  • Realistic budget based on work plan
  • One month of PI time on Phase I, two months on
    Phase II (example)
  • Adequate hours of engineering and technical
  • Travel directly related to the project only
  • Justification of direct cost items
  • Equipment and facilities included, or
    arrangements described
  • Profit rate between 5-10

Commercial Applications
  • Persuade the reviewer that commercial market
  • Provide detailed supporting statements
  • Demonstrate knowledge of the commercial area
  • Think creatively about possible applications
  • Concisely describe the plan to commercialize
  • Describe previous success in converting RD into
    new products
  • Focus on large potential markets
  • Include government applications

Description of Commercial Potential
  • Significant competitive advantages the new
    technology has over the existing in
  • Major competitive products
  • Application
  • Performance
  • Technique
  • Efficiency
  • Cost
  • Your plan to move from research to market

Quality Proposals
  • Sound approach, objectives and research plan
  • Describes problem in detail
  • Innovative idea and why its innovative
  • Anticipates problems and presents response
  • Good methodology
  • Doesnt assume reviewers are knowledgeable
  • Assumptions and statements are supported
  • Logical approach, easy to read

Why SBIR/STTR Proposals Win and Lose
  • Basic Requirements to Win
  • Follow guidelines
  • Title indicates important problem area
  • Initial appearance favorable
  • Important problem
  • Quality proposal upon careful reading
  • Commercial applications
  • Related research
  • Qualifications of PI, Consultants, Sub-contracts
  • Facilities and equipment
  • Budget and justification

SBIR as Part of a Business Strategy
  • Plan for growth and financing needs
  • Develop a roadmap for your company
  • SBIR/STTR provides credibility
  • Is timeline realistic for your organization?
  • Is timeline realistic for your technology and

SBIR as a Business Strategy
  • Academic-Corporate Alliances
  • Fit with overall goals and objectives
  • Intellectual Property Issues
  • Commercialization Opportunities

Miscellaneous Issues
  • Enhancing Credibility
  • Related accomplishments
  • Submitting Multiple Proposals
  • Disclosures

Proposal Review and Selection
  • Proposal reviewers are a heterogenous group
  • Interests, expertise, objectivity/subjectivity
  • Reading habits
  • Conscientious reader 30
  • Skimmer 30
  • Peruser/Readers Digest 30
  • Critic 10
  • Request a briefing

Follow-Up on Rejections
  • 110 ratio for awards
  • First time proposals seldom win
  • DOD - no prior connection made - reject
  • Agency required to debrief on rejections
  • Automatic versus phone call
  • Is the topic is likely to be included in the
    next solicitation?
  • Is the reason for rejection within your control
    to change?

  • Can the proposal can be resubmitted in the next
    round with recommended changes?
  • Address the recommendations
  • Was your proposal close to the quality of others
    that were awarded?
  • Read the abstracts of the projects that were
  • Competitor or collaborator?

New SBIR Provisions Being Considered for 2000
  • Improvements in the SBIR Program
  • Easier to participate
  • Reduce administrative burden
  • Include grant preparation expenses (?)
  • Reduce the funding gap
  • Lower threshold for agency participation

Questions Being Asked About SBIR
  • Should technical excellence continue as the
    primary criteria?
  • Ability to skip Phase I?
  • Change the percentage from 2.5?
  • Permanent versus sunset/reauthorization?
  • Agencies to syndicate a project?

Questions Being Asked About SBIR
  • Foreign participation?
  • Dropping the size eligibility from 500 to 100?
  • Patent royalties when the federal government is
    the only customer?
  • Extend SBIR Phase I to one year (like STTR)?

Points to Remember
  • Tremendous diversity among agencies, programs,
    solicitations, reviewers, and winning proposals
  • No guaranteed WIN strategies
  • Guidelines and suggestions based on ten agencies
    and regional companies experiences
  • The SBIR program is not static
  • Look for evolutionary changes

Business Development Issues
  • Business Plan Development
  • Protecting Intellectual Property
  • Accounting Systems and Audits
  • Record keeping and cost allocation
  • Direct and indirect costs

Business Development Issues
  • Contracts versus Grants
  • Marketing Research
  • Commercial Partnerships

Indicators of Success
  • Product company versus RD or service company
  • Private sector versus military customer
  • Completion of prototype
  • Use of university personnel or facilities
  • Protection of intellectual property
  • Progress on a marketing or business plan
  • Follow-on funding commitments or no outside
    funding needed

General Suggestions
  • Recognize non-research problems
  • Recognize regulatory problems
  • Thoroughly describe use of new or non-standard
  • Describe how data will be organized, recorded and
  • SBIR/STTR research must be challenging
  • Use of software requires mention of how, why and
    what it will do
  • Balanced proposal - idea, research, execution
  • Limit the perceived risk

Major Commercialization Problems
  • Marketing
  • Intellectual Property Protection
  • Strategic Planning
  • Lack of Business Development Skills
  • Financial Resources
  • Ideas for Potential Applications
  • Transition from RD Focus to Product Focus

Sources of Commercialization Assistance
  • Local colleges and universities
  • Business and Management programs
  • Information Studies
  • Communications departments
  • Regional TDOs and SBDCs
  • Trade and professional associations
  • State and Federal programs and events

Other Programs to Consider
  • Energy Related Inventions Program
  • New York State Energy Research and Development
  • Advanced Technology Program

Energy Related Inventions Program
  • ERIP (301) 975-5500
  • Since 1974, awarded over 41M to over 600
  • Evaluated by NIST, supported by DOE
  • Encourages invention and innovation in energy
  • Evaluates promising energy inventions
  • Provides development assistance
  • Grant size varies, up to 100,000
  • Year-round acceptance of proposals

New York State Energy Research and Development
  • NYSERDA 518-862-1090
  • 5 areas of interest
  • Industry, buildings, energy resources,
    transportation, environment
  • Grant size varies, up to 500,000
  • Minimum 50-50 match required
  • New initiatives announced
  • Green building design
  • Alternative-fuel vehicle strategies

Advanced Technology Program
  • ATP 518-862-1090
  • Goal to benefit the U.S. economy by cost-sharing
    research with industry to foster new, innovative
  • Risky, challenging technologies with the
    potential for a big pay-off
  • Minimum 50-50 match required
  • Single companies - direct costs only(2M up to 3
  • Joint venture partners encouraged
  • General competitions and focused programs

ATP General Technologies
  • Agriculture
  • Biotechnology
  • Microelectronics and electronics manufacturing
  • Machine tools
  • Advanced automotive manufacturing
  • Advanced materials
  • Information and communication technology
  • Chemical processing and other areas

NIST ATP Program http//
  • Projects evaluated for
  • scientific and technological merit, and
  • potential for broad-based economic benefits, with
    both parts weighted equally
  • For-profit U.S. Company
  • Universities can participate on subcontract
  • University cannot retain the title to patents
  • Can negotiate royalties

Other Web Pages of Interest
  • Small Business Administration
  • http//
  • National Technology Transfer Center
  • http//
  • National SBIR Conference Center
  • http//

  • http//