SBIR & STTR Funding Issues and Case Studies ~SBIR Outreach Program~ CNY Technology Development Organization (TDO) Marcene Sonneborn 315-425-5144 or [email protected]

SBIR & STTR Funding Issues and SBIR & STTR Funding Issues and Case Studies Case Studies

~SBIR Outreach Program~~SBIR Outreach Program~

CNY Technology Development Organization CNY Technology Development Organization (TDO)(TDO)

Marcene SonnebornMarcene Sonneborn

315-425-5144 or [email protected] or [email protected]

SBIR Outreach Program SBIR Outreach Program sponsored bysponsored by

CNY Technology Development CNY Technology Development OrganizationOrganization

New York State Office of Science, New York State Office of Science, Technology and Innovation (NYSTAR)Technology and Innovation (NYSTAR)

Regional SBIR ProgramRegional SBIR Program

• NYSTAR funds: NYSTAR funds: 10 Regional Technology Development Centers10 Regional Technology Development Centers 15 Centers for Advanced Technology15 Centers for Advanced Technology

• Three SBIR Outreach Centers:Three SBIR Outreach Centers: Western NYWestern NY New York City and DownstateNew York City and Downstate Central NY Central NY

Regional SBIR Program Regional SBIR Program ObjectivesObjectives

• To stimulate and encourage broader SBIR To stimulate and encourage broader SBIR and STTR participationand STTR participation

• To increase the number of awards at all To increase the number of awards at all levels (Phases I, II and III)levels (Phases I, II and III)

• To outreach to small businessesTo outreach to small businesses

• To assist companies in applying for awardsTo assist companies in applying for awards A benefit of being a New York State businessA benefit of being a New York State business

• No fees for services!!No fees for services!!

Objectives for Today’s ProgramObjectives for Today’s Program

Provide information about SBIR/STTRProvide information about SBIR/STTR• Why might you be interested in these programs?Why might you be interested in these programs?

Brief history and objectivesBrief history and objectives• Pre-feasibility to CommercializationPre-feasibility to Commercialization

• How the program operatesHow the program operates

• How to access these programs – strategiesHow to access these programs – strategies

• Who to call when you are preparing to write your proposalWho to call when you are preparing to write your proposal

History of SBIR ProgramHistory of SBIR Program 1982 - Congress passed the Small Business 1982 - Congress passed the Small Business

Innovation Development ActInnovation Development Act 1986 - Reauthorization1986 - Reauthorization 1992 - Congress extended SBIR and created 1992 - Congress extended SBIR and created

STTRSTTR 2000 – Renewal extended from 9/30/08 until 2000 – Renewal extended from 9/30/08 until

March 20, 2009March 20, 2009 2001 – STTR renewal until 9/30/092001 – STTR renewal until 9/30/09

Reauthorization UnderwayReauthorization Underway

It is unlikely that SBIR will go away, but it It is unlikely that SBIR will go away, but it could change immenselycould change immensely

SBIR/STTR ReauthorizationSBIR/STTR Reauthorization

77thth Continuing Resolution until 7/31/10 Continuing Resolution until 7/31/10 There has been an unprecedented number of There has been an unprecedented number of

changes in SBIR program managers among changes in SBIR program managers among the 11 agencies in the past year. the 11 agencies in the past year.

With these personnel changes come changes in With these personnel changes come changes in the agencies' SBIR program features, "culture" the agencies' SBIR program features, "culture" and priorities.and priorities.

SBIR/STTR ReauthorizationSBIR/STTR Reauthorization

Specifics of final program unknownSpecifics of final program unknown• Venture Capital participationVenture Capital participation• Phase I to Phase IIPhase I to Phase II• Length of term for reauthorizationLength of term for reauthorization

We do know the programs will be different after We do know the programs will be different after the House and Senate reach a compromise the House and Senate reach a compromise between their two radically different versions of between their two radically different versions of the reauthorization legislation.the reauthorization legislation.

SBIR and STTRSBIR and STTR Federal R&D funding Federal R&D funding

• To conduct research leading to a commercializable To conduct research leading to a commercializable product, service or process – grant or contract awards product, service or process – grant or contract awards

• From $500,000 to $1.5 million (or more) for From $500,000 to $1.5 million (or more) for approximately 3 years of R&D approximately 3 years of R&D

SBIR = Small Business Innovation ResearchSBIR = Small Business Innovation Research

STTR = Small Business Technology Transfer ProgramSTTR = Small Business Technology Transfer Program

Why Should you be interested Why Should you be interested in SBIR or STTR?in SBIR or STTR?

If you have an idea or concept for If you have an idea or concept for a technology or product that is a technology or product that is truly an innovationtruly an innovation


If your idea may or may not be If your idea may or may not be feasible…feasible…

but if it is, it could revolutionize but if it is, it could revolutionize some aspect of medicine, agriculture, some aspect of medicine, agriculture, aerospace, military operations, etc.aerospace, military operations, etc.


If you want to spinoff a business If you want to spinoff a business venture to take your innovation into venture to take your innovation into the commercial market the commercial market

Why Be Interested in SBIR?Why Be Interested in SBIR?

Grants and contracts - Not loans or equityGrants and contracts - Not loans or equity• Retain full equity ownership (no stock for funds)Retain full equity ownership (no stock for funds)• Retain cash for operations (no payback requirements)Retain cash for operations (no payback requirements)

Establish a sole source marketing position with a Establish a sole source marketing position with a ready-made customer baseready-made customer base

Receive additional support for business planning, Receive additional support for business planning, commercialization and venture capital acquisitioncommercialization and venture capital acquisition

Treated as Federal ProcurementTreated as Federal Procurement

Subject to the Federal Acquisition regulations Subject to the Federal Acquisition regulations (FARs) (FARs) • DFAR for the Department of DefenseDFAR for the Department of Defense

Announcements, solicitations, schedulesAnnouncements, solicitations, schedules Written proposals, review panelsWritten proposals, review panels Subject to a DCAA auditSubject to a DCAA audit

Purposes of SBIR/STTRPurposes of SBIR/STTR To stimulate technological innovation in the U.S. To stimulate technological innovation in the U.S.

To use small businesses to meet federal R&D To use small businesses to meet federal R&D needsneeds

To increase the commercialization of products To increase the commercialization of products and services from federal R&D assistanceand services from federal R&D assistance

To emphasize private sector commercialization To emphasize private sector commercialization

What does SBIR/STTR fund? What does SBIR/STTR fund? Exploitation of scientific breakthroughsExploitation of scientific breakthroughs

Innovation through emerging technologiesInnovation through emerging technologies

Novel application of existing technologiesNovel application of existing technologies

Major improvements to existing technologiesMajor improvements to existing technologies

Three Phases of SBIRThree Phases of SBIR Phase I:Phase I: Scientific and technical Scientific and technical

feasibility (Six months)feasibility (Six months)• Up to $150,000Up to $150,000

Phase II:Phase II: Concept refinement, generally Concept refinement, generally leading to prototype (Two years)leading to prototype (Two years)• $1 million or more$1 million or more

Phase III:Phase III: Commercialization (non-SBIR Commercialization (non-SBIR funded phase)funded phase)

What is STTR?What is STTR?

• Small Business Technology Transfer Small Business Technology Transfer ProgramProgram

• Cooperative R&D between small Cooperative R&D between small business and research institutionsbusiness and research institutions

• Joint venture introducing Joint venture introducing entrepreneurial skills to high-tech entrepreneurial skills to high-tech research effortsresearch efforts

Three Phases of STTRThree Phases of STTR Phase IPhase I

• Awards up to Awards up to $100,000 $100,000 for for up to one yearup to one year

• Explore scientific, technical, and commercial Explore scientific, technical, and commercial feasibility of an idea or technology\feasibility of an idea or technology\

• Requires an allocation of rights agreement between Requires an allocation of rights agreement between the partiesthe parties

Phase IIPhase II

• Awards of Awards of $750,000 $750,000 or more for two yearsor more for two years

• R&D work performed and commercial potential R&D work performed and commercial potential consideredconsidered

Phase IIIPhase III

• Non-STTR funding to move from lab to marketNon-STTR funding to move from lab to market

SBIR/STTR “Innovation” SBIR/STTR “Innovation” ModelModel

PHASE IFeasibilityResearchh

PHASE IIIProductDevelopmenttoCommercialMarket

Taxes

PHASE IIResearchtowardsPrototype

Federal Investment

SBIR/STTR DifferencesSBIR/STTR Differences• SBIRSBIR

11 agencies participate 11 agencies participate Two-thirds (minimum) of funds spent inside the companyTwo-thirds (minimum) of funds spent inside the company One-third spent on outside consultants or resourcesOne-third spent on outside consultants or resources SBIR is 2.5% of the agency’s external R&D budget SBIR is 2.5% of the agency’s external R&D budget

• STTRSTTR 5 agencies participate5 agencies participate Company performs at least 40% of work Company performs at least 40% of work Research institution performs at least 30% of work Research institution performs at least 30% of work STTR is 0.3% of the agency’s external R&D budgetSTTR is 0.3% of the agency’s external R&D budget Allocation of Rights agreement requiredAllocation of Rights agreement required Phase I term is up to one yearPhase I term is up to one year Topics may be limited, different cycle than SBIRTopics may be limited, different cycle than SBIR

Agencies Offering SBIR and STTR Agencies Offering SBIR and STTR AwardsAwards

Eleven SBIR agencies and five STTR agencies:Eleven SBIR agencies and five STTR agencies: Department of AgricultureDepartment of Agriculture Department of CommerceDepartment of Commerce Department of Defense - Department of Defense - also STTRalso STTR Department of EducationDepartment of Education Department of Energy - Department of Energy - also STTRalso STTR Department of Homeland Security (HSARPA)Department of Homeland Security (HSARPA) Health and Human Services - Health and Human Services - also STTRalso STTR

• National Institutes of HealthNational Institutes of Health• Health Care Financing AdministrationHealth Care Financing Administration

Department of TransportationDepartment of Transportation Environmental Protection AgencyEnvironmental Protection Agency National Aeronautics and Space Administration - National Aeronautics and Space Administration - also STTRalso STTR National Science Foundation - National Science Foundation - also STTRalso STTR

Approximate Amounts by AgencyApproximate Amounts by Agency Defense (DoD ‐ $1 Billion )Defense (DoD ‐ $1 Billion ) Health and Human Services (National Institutes of Health, Centers forHealth and Human Services (National Institutes of Health, Centers for

Disease Control‐ HHS/NIH ‐ $574 million )Disease Control‐ HHS/NIH ‐ $574 million ) National Aeronautics and Space Administration (NASA ‐ $108 million )National Aeronautics and Space Administration (NASA ‐ $108 million ) Energy (DOE‐ $102 million)Energy (DOE‐ $102 million) National Science Foundation (NSF ‐ $94 million)National Science Foundation (NSF ‐ $94 million) Homeland Security ($33 million)Homeland Security ($33 million) Department of Agriculture (USDA ‐ $18 million)Department of Agriculture (USDA ‐ $18 million) Department of Education (ED ‐ $9 million)Department of Education (ED ‐ $9 million) Environmental Protection Agency (EPA ‐ $8 million)Environmental Protection Agency (EPA ‐ $8 million) Commerce (National Oceanographic and Atmospheric AdministrationCommerce (National Oceanographic and Atmospheric Administration

NOAA /National Institute on Standards and Technology NIST‐ $7 million)NOAA /National Institute on Standards and Technology NIST‐ $7 million) Department of Transportation (DOT ‐ $4 million)Department of Transportation (DOT ‐ $4 million)

Eligibility for SBIREligibility for SBIR American-owned,independently operatedAmerican-owned,independently operated For-Profit business less than 500 employeesFor-Profit business less than 500 employees Not dominant in the proposed field of operationNot dominant in the proposed field of operation The Principal Investigator is employed by the business The Principal Investigator is employed by the business

over 50% time (SBIR)over 50% time (SBIR) Research space must be available to and under the Research space must be available to and under the

control of the SBIR grantee for the company’s portion control of the SBIR grantee for the company’s portion of the proposed projectof the proposed project

STTR EligibilitySTTR Eligibility• American-owned, independently operated American-owned, independently operated • For-profitFor-profit• Principal researcher Principal researcher need not be need not be employed by employed by

small businesssmall business• Company size limited to 500 employees (no size Company size limited to 500 employees (no size

limit for non-profit research institution) limit for non-profit research institution) • Research Institution must be in U.S.Research Institution must be in U.S.

SBIR STTR

Agency: Release Date: Closing Date(s): Release Date: Closing Date:

Department of Agriculture June 1 Sept 4 ** **

Department of Commerce: 1. NOAA 2. NIST

Oct 15 Oct 31

Jan 14 Jan 30

** **

Department of Defense: 1. DOD First Solicitation

2. DOD Second Solicitation 3. DOD Third Solication

4. DOD Fourth Solication

Dec 1 May 1 July 1

Sept 15

Jan 15 Jun 17 Aug 12 Oct 15

Mar 1 Apr 15

Department of Education 1. First Solication

2. Second Solication Dec 14 Mar 28

Feb 14 Jun 1

** **

Department of Energy Oct 7 Jan 6 Oct 7 Jan 6

Health & Human Services (NIH, CDC, FDA):

1. PHS/NIH (grants) (AIDS related applications due 1

month later) 2. PHS/NIH (contracts)

Jan 15

Jul 16

Apr 5, Aug 5

Apr, Nov 7

Jan 15 Apr 5, Aug 5, Dec 5

Homeland Security Jun 14 Jul 14 ** **

Department of Transportation Feb 17 May 1 ** **

Environmental Protection Agency Mar 25 May 25 ** **

National Aeronautics & Space Administration

Jul 7 Sept 9 Jul 7 Sept 9

National Science Foundation: 1. IT & ST

2. AM Mar 1 Oct 1

Jun 9 Jan 20

Mar 1 Oct 1

Jun 9Jan 20

SBIR APPLICATION PROCESSSBIR APPLICATION PROCESS How Do I Apply?How Do I Apply?

• Identifying TopicsIdentifying Topics• Contacting AgenciesContacting Agencies• Preparing the ProposalPreparing the Proposal• Following UpFollowing Up• ResubmittingResubmitting

How Do I Apply?How Do I Apply?1. Identify topics funded by each agency1. Identify topics funded by each agency

that relate to your company’s R&D interest:that relate to your company’s R&D interest:• Link from http://www.sbirworld.com/Link from http://www.sbirworld.com/

• Links to SBIR Info SourcesLinks to SBIR Info Sources• SBIR Solicitation Schedule SBIR Solicitation Schedule • STTR Solicitation ScheduleSTTR Solicitation Schedule

How Do I Apply?How Do I Apply?2. Review Solicitation information:2. Review Solicitation information:• Presolicitation AnnouncementsPresolicitation Announcements• SBIR/STTR Solicitation Schedules SBIR/STTR Solicitation Schedules • GuidelinesGuidelines

Requirements - technical and personnel Requirements - technical and personnel Award amountsAward amounts Application and submission detailsApplication and submission details Forms and budget guidelinesForms and budget guidelines

• Research funded in the pastResearch funded in the past• Sample or model proposalsSample or model proposals

General Phase I Proposal Outline

Cover page(s) – (Includes abstract for public release) Identification & Significance of the Problem or Opportunity Technical Objectives Work Plan Related Work Relationship With Future R&D Potential Post Applications Key Personnel Facilities/Equipment Consultants & Subcontracts Prior, Current or Pending Support Cost Proposal

How Do I Apply?How Do I Apply?3. Contact each agency3. Contact each agency

Treat each agency as you would treat any customer - Treat each agency as you would treat any customer - “market to them”“market to them”

Learn why the agency is funding the topicLearn why the agency is funding the topic• Technical questions before “Release Date”Technical questions before “Release Date”• Only administrative questions after releaseOnly administrative questions after release• DOD has a pre-release periodDOD has a pre-release period• HHS and Agriculture not concerned about release HHS and Agriculture not concerned about release

date restrictionsdate restrictions

Before You Start to Write…Before You Start to Write…

4. Think about your plan for the long term4. Think about your plan for the long term

Prepare a technology/product development planPrepare a technology/product development plan• Clear list of all that needs to be done to take the technology Clear list of all that needs to be done to take the technology

into the marketinto the market Technology and product featuresTechnology and product features Markets and Core BenefitsMarkets and Core Benefits IP issuesIP issues Manufacturing or production Manufacturing or production Quality assurance and quality control issuesQuality assurance and quality control issues Clinical trials or product testingClinical trials or product testing Partnerships, strategic alliancesPartnerships, strategic alliances

Before You Start to Write…Before You Start to Write…

5. Clearly define specific aims for the grant 5. Clearly define specific aims for the grant proposal, consistent with the product proposal, consistent with the product development plandevelopment plan• Time span and budgetTime span and budget

What preliminary data is valuableWhat preliminary data is valuable• What will support the Specific Aims?What will support the Specific Aims?

Preparing to Sell Your IdeaPreparing to Sell Your Idea 6. Homework - Search the Literature6. Homework - Search the Literature

• Your own field of expertise and alternativesYour own field of expertise and alternatives

• Key application areas, existing patents Key application areas, existing patents

• Potential market opportunitiesPotential market opportunities

7. Brainstorming/Teamwork7. Brainstorming/Teamwork

Tight Focus on the ProjectTight Focus on the Project 8. Evaluating the Topic “Fit”8. Evaluating the Topic “Fit”

• Why did the agency list this topic?Why did the agency list this topic?

• Is this within your strategic mission?Is this within your strategic mission?

• Identify the Project’s ThemeIdentify the Project’s Theme

• Contact SBIR/STTR people in the “off season”Contact SBIR/STTR people in the “off season”

• Know how your approach is different from Know how your approach is different from

competing technologies and explain itcompeting technologies and explain it

Preparing a Phase I ProposalPreparing a Phase I Proposal Elements of the ApplicationElements of the Application

• Total proposal no more than 25 pages for Phase ITotal proposal no more than 25 pages for Phase I NIH has reduced its technical description from 15 down to 6 NIH has reduced its technical description from 15 down to 6

pagespages

Description of the problem you are attempting to solveDescription of the problem you are attempting to solve How you propose to solve it (research plan)How you propose to solve it (research plan) TimelineTimeline Resources neededResources needed Budget and administrative formsBudget and administrative forms CVs and research team capabilities, expertiseCVs and research team capabilities, expertise

Preparing a Phase I ProposalPreparing a Phase I Proposal• Personnel and FacilitiesPersonnel and Facilities

Principal Investigator and Key PersonnelPrincipal Investigator and Key Personnel Industry Partners and Recognized ConsultantsIndustry Partners and Recognized Consultants

• Commercial Potential, Anticipated BenefitsCommercial Potential, Anticipated Benefits• Plans for Phase IIPlans for Phase II• Budget and JustificationBudget and Justification

Commercialization PlanningCommercialization Planning• Who will benefit, who will buyWho will benefit, who will buy• Identify a pathway to commercial useIdentify a pathway to commercial use

Useful WebsitesUseful Websites http://www.sbir.gov/

http://www.zyn.com/SBIR/• Solicitation NewsSolicitation News• Sign up for Zyn's SBIR Gateway Sign up for Zyn's SBIR Gateway InsiderInsider

http://sbir.us/schedule.html http://gram.eng.uci.edu/~top/sbir.htm#SBIR_SCHEDULE

http://www.sba.gov/SBIR/• Requires a password Requires a password

DOD SITISDOD SITIS

http://www.dodsbir.net/SITIS/ SBIR/STTR Interactive Topic Information SBIR/STTR Interactive Topic Information

SystemSystem• Provides technical clarification on solicitation Provides technical clarification on solicitation

topics topics • Questioner and respondent remain anonymous Questioner and respondent remain anonymous • All technical questions and answers posted All technical questions and answers posted

electronically for general viewingelectronically for general viewing

SBIR Web SitesSBIR Web Sites(Cross-Agency)(Cross-Agency)

http://www.sbir.gov

http://www.zyn.com/sbir/http://www.zyn.com/sbir/

Case Studies

Symantec

Sensis Corporation

Early SBIR Case Study 1979: An NSF SBIR grant funded a high risk, potentially

high payoff, extremely complex idea that Dr. Gary Hendrix conceived when he was working at Stanford Research Institute.

• Technology: Microcomputer-based Natural Language Understanding

• The SBIR project resulted in the first personal computer software that understood English.

Early SBIR Case Study

1982: Symantec was founded by Dr. Hendrix and a team of visionary

scientists

• Their breakthrough was so successful that it helped Symantec attract: 12 outstanding scientists and engineers from academia $3.5 million of venture capital from Kleiner Perkins and a strong marketing team

• Symantec was originally focused on artificial intelligence-related projects, including a database program

Early SBIR Case Study

1985: It’s first product was marketed in 1985 as "Q&A Software"

• 6 years after the first SBIR

Q&A quickly generated millions of dollars of sales • Database management bundled with a word processor

Symantec grew from a small, four-person startup to a large, diversified software firm

• The company had record sales of $455 million in 1995 and cumulative sales are now approximately $2 billion. Total employment is nearly 2000.

Symantec's initial success with Q&A led to an IPO of $10.5 million that was followed by 19 acquisitions.

Early SBIR Case Study 1995:

10 years after Q&A was released, the company had reached:• Record sales of $455 million• Cumulative sales of approximately $2 billion• Over 2000 employees

By 1997 it was the most popular commercial application of natural language processing in the world.

Best known for Norton Antivirus and its family of

security products

2009: The company has evolved to become one of the

world’s largest software companies with more than 17,500 employees in more than 40 countries.

Security, storage, and systems management solutions

Local SBIR Case Study

Founded in 1985, Sensis Corporation is a global provider of air defense, air traffic control, airline and airport operations management, and data integration and distribution.


Founded in 1985 by Jud Gostin• A former General Electric executive in Syracuse• Left GE after 27 years and patterned his new company after GE's

military radar business. • His first six employees were radar design engineers hired away from

General Electric.

FY 86 – First Phase I received from the Navy for $49,860• “Multi-Static Radar (Passive) Applicability for Small Radar Cross

Section”• Employees: 6


1986-1991 Sensis Corporation received 7 Phase Is and one Phase II for a

total of nearly $1 million:

A global provider of air defense, air traffic control, airline and airport operations management, and data integration and distribution.

“A key to success? Empower employees to innovate”

By Steve Carlic / The Post-Standard February 09, 2009

Jud Gostin on incentives for innovation

“. . . If we forestall (airport) collisions, you can imagine how good that makes people feel. And we do. Our equipment saves lots of lives on airports. And we think it will save lots of lives on the battlefield, as well.”

2010: Over 700 employees and hiring…

Sensis has branched out into other lines of business, driven by employee innovation.

» Air Traffic Systems• Air Traffic Systems (ATS) provides surveillance and information technology for the

aviation industry, supporting air navigation service providers, airports and airlines. » Defense & Security Systems

• Defense & Security Systems (D&SS) provides protection, safety and security to the world's defense organizations through radar subsystems and upgrades; ground based radar; and performance and optimization tools.

» Advanced Development• Leveraging our core competencies, Advanced Development (AD) works in conjunction

with our ATS and D&SS divisions to develop innovative, real-world solutions for today and new business for tomorrow.

Things to Keep in Focus About Things to Keep in Focus About SBIR/STTRSBIR/STTR

Commercial application is the focusCommercial application is the focus Good ROI evidence is importantGood ROI evidence is important

• Addresses a significant issueAddresses a significant issue Market and customer need is the driving forceMarket and customer need is the driving force Economic prosperity for the U.S. Economic prosperity for the U.S.

• Job creationJob creation• Richer tax payersRicher tax payers• Keep the U.S. globally competitive Keep the U.S. globally competitive

There is no fee for SBIR Outreach There is no fee for SBIR Outreach services, they are funded through a New services, they are funded through a New

York State contract to TDOYork State contract to TDO

www. tdo.org Marcene SonnebornMarcene Sonneborn

SBIR SpecialistSBIR SpecialistCNYTDOCNYTDO

445 Electronics Parkway, Suite 206445 Electronics Parkway, Suite 206Liverpool, NY 13088Liverpool, NY 13088

(315)425-5144(315)[email protected]@tdo.org

Documents

SBIR & STTR Funding Issues and Case Studies ~SBIR Outreach Program~ CNY Technology Development Organization (TDO) Marcene Sonneborn 315-425-5144 or [email protected]