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SBIR 101: SBIR 101: Often the best option for funding Often the best option for funding your business to bring innovative your business to bring innovative new ideas to market new ideas to market * * SBIR/STTR as alternative financing for new SBIR/STTR as alternative financing for new business starts and new product/technology business starts and new product/technology development development TechLink is an Authorized U.S. Department of Defense Partnership Intermediary per Authority 15 U.S.C. Ray Friesenhahn SBIR & Technology Transition Manager June 12, 2013 *without losing equity or building de *without losing equity or building de
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SBIR/STTR as alternative financing for new business starts and new product/technology development

Mar 19, 2016

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SBIR 101: Often the best option for funding your business to bring innovative new ideas to market *. SBIR/STTR as alternative financing for new business starts and new product/technology development. *without losing equity or building debt. Ray Friesenhahn SBIR & Technology Transition Manager - PowerPoint PPT Presentation
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Page 1: SBIR/STTR as alternative financing for new business starts and new product/technology development

SBIR 101:SBIR 101:Often the best option for funding your business Often the best option for funding your business

to bring innovative new ideas to marketto bring innovative new ideas to market**

SBIR/STTR as alternative financing for new business SBIR/STTR as alternative financing for new business

starts and new product/technology developmentstarts and new product/technology development

TechLink is an Authorized U.S. Department of Defense Partnership Intermediary per Authority 15 U.S.C. 3715

Ray FriesenhahnSBIR & Technology Transition ManagerJune 12, 2013

*without losing equity or building debt*without losing equity or building debt

Page 2: SBIR/STTR as alternative financing for new business starts and new product/technology development

Small Business Innovation Research(SBIR)

$2.4 Billion (FY12) federal set-aside (since 1982) for U.S. Small Businesses

Small Business Technology Transfer(STTR)

$300 Million (FY12) federal set-aside (since 1992) for U.S. Small Businesses

working with not-for-profit Research Institutions (e.g. universities)

Page 3: SBIR/STTR as alternative financing for new business starts and new product/technology development

o SBIR is just one funding optionSBIR is just one funding optiono Not always the best optionNot always the best optiono Can mix/synergize with other funding optionsCan mix/synergize with other funding options

o Know your customer (agency)!Know your customer (agency)!o Grant vs. contract; line vs. peer reviewGrant vs. contract; line vs. peer reviewo Do your homework – background researchDo your homework – background researcho Customer (agency) relationships can be important!Customer (agency) relationships can be important!

o Plan for the long term Plan for the long term (don’t chase short-term $)(don’t chase short-term $) o Plan for Phase III and commercialization/transitionPlan for Phase III and commercialization/transition

o Build successful collaborations & partnershipsBuild successful collaborations & partnershipso Read the instructions! Read the instructions!

Today’s Key Takeaways:Today’s Key Takeaways:

Then read them again!Then read them again!

Page 4: SBIR/STTR as alternative financing for new business starts and new product/technology development

Perspective on SBIRas a business finance option

Page 5: SBIR/STTR as alternative financing for new business starts and new product/technology development

Convince yourself it’ll work

Conduct some realistic market research

Begin IP (Intellectual Property) protection

Build a prototype or test a crude demo

Develop a business plan

Now you need to finance this plan!

Start to build a team!

Work on building your team!

Continue building your team!

Do you have everyone you need?

Working with your team!

Page 6: SBIR/STTR as alternative financing for new business starts and new product/technology development

Options for Financing your Innovative Technology Start-up

• Venture Capital (VC)• Angel or Corporate Investors• FFFF• Loans & Bootstrapping• Crowdfunding • SBIR/STTR

Page 7: SBIR/STTR as alternative financing for new business starts and new product/technology development

“Typical” Early-Stage Funding Levels:(Traditional) VC:

Angels:

FFFF:

(Bank) Loans:

Bootstrapping:

Crowdfunding: SBIR/STTR:

$4M – $50M+ (Avg. $7.2M, $27B in 2012)

$25K - $2M (Med. $450K, $22B in 2011)

$5K - $100K ($50B overall)

$0~$250K (with good collateral)

Varies (see Greg Gianforte, e.g.)

To $10M?

$70K - $1M +++ ($2.4B overall)

Pebble on Kickstarter

(Kickstarter $435M on 37K proj.)

(Sometimes use convertible debt, typically pre-seed)

Page 8: SBIR/STTR as alternative financing for new business starts and new product/technology development

Venture Capital&

Angel Investors

Page 9: SBIR/STTR as alternative financing for new business starts and new product/technology development

# of Deals

VC Funding in the U.S.PricewaterhouseCoopers MoneyTree Report

Bill

ions

Page 10: SBIR/STTR as alternative financing for new business starts and new product/technology development

VC Funding in TexasPricewaterhouseCoopers Money Tree Report

Page 11: SBIR/STTR as alternative financing for new business starts and new product/technology development

VC Considerations:• Looking for ROI: >10X 5 years

• Need Scalability, Exit Strategy• Odds of getting VC <1% (0.11% of new co’s get VC)

• VCs looking for team experience• Performance-driven (ruthless)

• ~50% of founders forced out in 1st year• VC need to bring value to your Board• Earlier stage = more equity to VC• “20-Minute Rule” for traditional VC

Page 12: SBIR/STTR as alternative financing for new business starts and new product/technology development

Angel Considerations:(From the Ewing Marion Kauffman Foundation)

• Of 500K annual new business starts, typically 50K receive some angel backing

• In 2011, $22B angel funding (vs. $29B VC)• Up to 90% of companies receiving outside

equity capital got it from angel investors• Median angel investment: ~$450K• Investments tend to be local, within industry

experience of investor (adding value to Board)

• Should come after self-financing, FFFF• Typically take 20% - 40% equity

Page 13: SBIR/STTR as alternative financing for new business starts and new product/technology development

SBIR/STTR Overview

Page 14: SBIR/STTR as alternative financing for new business starts and new product/technology development

o Federally mandated programs (since 1982/1992) for agency funding of small business (<500 empl.) R&D to develop new commercial products or services

o FY13 Budgets: o SBIR: ~$2.4 Billion

o 2.7% of extramural R/R&D for agencies >$100M (3.2% by FY17)o STTR: ~$300 Million

o 0.35% of extramural R/R&D for agencies >$1B (0.45% by FY16)

o Goal is commercialization of new innovations from U.S. small businesses

SBIR/STTR Overview

Page 15: SBIR/STTR as alternative financing for new business starts and new product/technology development

3-Phase Program:o Phase I: Feasibility Study

o “Typically” 6-month, $80K - $150K ($225K)

o Phase II: Proof of Principal/Prototypeo “Typically” 2-year, up to $1M ($1.5M)

o Phase III: Commercialization (or “Transition” to DoD)o No SBIR/STTR fundingo May be government contract/procuremento No contract size limito Possible Phase II “Enhancement” to get there

SBIR/STTR Overview

Page 16: SBIR/STTR as alternative financing for new business starts and new product/technology development

SBIR/STTR Highly Competitive • Overall about 1 in 6 win Phase I• For “Newbies” odds ~1:10• 40 – 60 hours to write decent proposal•Most companies lose money during Phase I•Must prove feasibility and still compete for Phase II

• Overall ~40% of Phase I awardees win Phase II

Page 17: SBIR/STTR as alternative financing for new business starts and new product/technology development

SBIR Importance to the Nation • Nation’s most successful program in moving

cutting-edge technology into the marketplace• Many other nations now copying it• Largest source of early-stage technology financing• Results meet important societal and/or government

and Defense mission needs• SBIR companies produce over:

• 20X # patents/$R&D as universities• 5X # patents/$R&D as large companies

• SBIR-backed firms responsible for ~25% of the nation’s most crucial innovations over last decade

Page 18: SBIR/STTR as alternative financing for new business starts and new product/technology development

o Not a loan – no repayment requiredNot a loan – no repayment requiredo No loss of equity ownershipNo loss of equity ownershipo Can be high-risk (high-payoff) innovationCan be high-risk (high-payoff) innovationo Preferences, including sole source Preferences, including sole source

contracts, for follow-on government contracts, for follow-on government funding or procurementfunding or procuremento Not required, no guaranteed follow-onNot required, no guaranteed follow-on

o Overall chances of winning ~1/6Overall chances of winning ~1/6

SBIR/STTR Advantages:SBIR/STTR Advantages:

Page 19: SBIR/STTR as alternative financing for new business starts and new product/technology development

o Government contracts and accounting can Government contracts and accounting can be onerousbe onerous

o Slow process (3-5 years through Phase II)Slow process (3-5 years through Phase II)o Not appropriate for short windows of Not appropriate for short windows of

opportunityopportunityo Requires R&D capability and writing skillsRequires R&D capability and writing skillso Must propose what agencies ask forMust propose what agencies ask for

o Very specific for contracting agencies Very specific for contracting agencies (e.g. NASA, DoD)(e.g. NASA, DoD)

o Much more leeway for granting agencies Much more leeway for granting agencies (e.g. NSF, NIH)(e.g. NSF, NIH)

SBIR/STTR Disadvantages:SBIR/STTR Disadvantages:

Page 20: SBIR/STTR as alternative financing for new business starts and new product/technology development

Companies Started with SBIR/STTR

Funding

Page 21: SBIR/STTR as alternative financing for new business starts and new product/technology development

Sonicare ToothbrushSonicare Toothbrush

• Started as GEMTech (1988)

•1990 NIH Phase I SBIR ($50K) for “Sonic Brush”

• 1992 NIH Phase II: $500K

•1995 changed name to Optiva Corp.

•2000: Optiva (Snoqualmie, Washington) had >600 employees, $175 million in annual sales

•Acquired by Phillips (2000)

Page 22: SBIR/STTR as alternative financing for new business starts and new product/technology development

Packbot Packbot (with bomb)(with bomb)

iRobot(Bedford, MA)

•29 DoD SBIR/STTR awards (2001 – 2008)• Total award value $9.2M•2010:

• 657 employees• $400M annual sales

• ~40% military• $737M market value

•2011 sales $466M•2012 sales $436M

• ~10% militaryRoomba Roomba (vacuum cleaner)(vacuum cleaner)

Page 23: SBIR/STTR as alternative financing for new business starts and new product/technology development

“With one of the grants, we developed some of the first chips we did at Qualcomm.. making chips for cellphones is about two-thirds of our revenue today.” -Irwin Jacobs 1987-1990: 12 SBIRs (NSF & DoD), $1.4M

Today (2011 numbers):•21,000+ employees (21% growth)•$15B annual sales (36% growth)•Holds >13,000 U.S. patents•Pays more in taxes than SBA’s annual budget!

Page 24: SBIR/STTR as alternative financing for new business starts and new product/technology development

Basic SBIR/STTR Eligibility

Requirements

Page 25: SBIR/STTR as alternative financing for new business starts and new product/technology development

o Small by SBA definitions: <500 employees – including all affiliates (see VC ownership issues)

o For-profito At least 51% owned & controlled by U.S. individuals (see VC issues)o Primary employment of the PI must be with the small business firm

at the time of the award and during the conduct of the proposed effort (or with Research Institution for some STTR)

o All work must be done in U.S. (except with special approval)

SBIR/STTR Eligibility Requirements

Page 26: SBIR/STTR as alternative financing for new business starts and new product/technology development

Company Size Distribution:NASA Phase I SBIR Awards

NASA SBIR: About 1/3 are 1st-time awardees

Page 27: SBIR/STTR as alternative financing for new business starts and new product/technology development

Basic Requirements for SBIR/STTR

Success

Page 28: SBIR/STTR as alternative financing for new business starts and new product/technology development

o Innovationo New Product or Technologyo New Application of Existing Technology

o Research o Research of the Feasibility of the Projecto Not Market Researcho Not Strictly Product Development

o Commercial Applicationso Societal Need and Commercial Potential and/oro Specific Agency Need and “Dual Use”

Requirements for SBIR Success:

Page 29: SBIR/STTR as alternative financing for new business starts and new product/technology development

o Proposal Writing Skillso Blending of business & technical/scientific proposal

o Tip: Start with the Commercialization Plan

o Hiring a proposal writer usually not a good choiceo Having a reviewer and/or technical editor is very helpful

o Know Your Customer! o Significant agency differences in proposal requirements,

technical focus, evaluation process

o Build a Team to Fill in Gapso Use allowed subcontracts, consultants, collaborators to

build research capabilities, path to commercialization

Additional Needs for Winning SBIR:

Page 30: SBIR/STTR as alternative financing for new business starts and new product/technology development

o Phase I is Required Step, Not Objectiveo Most companies actually lose money in Phase Io Phase I required before Phase II

o Phase II Much More $$ - Still Just a Stepo Strong Commercialization Plan is one key to winningo Need to show intent and ability to develop the product

or service and get it to the customer (market).

o Commercialization is Goalo Commercial or other saleso Follow-on gov’t contracts for DoD, NASA, others

Planning Ahead for SBIR Success:

Phase III

Page 31: SBIR/STTR as alternative financing for new business starts and new product/technology development

SBIR/STTR Summary Info:SBIR/STTR Summary Info:SBIR STTR

Total Ann. Amt. ~$2.4 Billion ~$300 Million

Agencies 11 5(DoD, DOE, NIH, NASA, NSF)

Phase I (~15% win, much higher for STTR)

Typically to $150KUsually 6 months

Typically $150KOften 12 months

Phase II (~40% win) Typically to $1M24 months

Up to $1M24 months

(University) Phase I:Subcontracts Phase II:

Allows up to 1/3Allows up to 1/2

Requires 30 – 60% to RIRequires 30 – 60% to RI

Page 32: SBIR/STTR as alternative financing for new business starts and new product/technology development

Agency Participation in SBIR/STTR

And Key Differences

Page 33: SBIR/STTR as alternative financing for new business starts and new product/technology development

o 11 different agencies participate in SBIRo 5 of these also have STTR programs

o Each agency manages its own programso Each (of 12) DoD Components manages its own

programs, with some coordination by OSD

o SBA sets general rules (SBIR & STTR Program Policy Directives) o per law set by Congress (SBIR/STTR Reauthorization

Act of 2011, in NDAA of FY2012, Public Law 112-81)

o Agencies report as required to SBA

SBIR/STTR Agency Participation

Page 34: SBIR/STTR as alternative financing for new business starts and new product/technology development

Agency Programs Budget Award Type Review

DoD SBIR/STTR $1.2 B / $154 M Contracts LineHHS/NIH SBIR/STTR $617 M / $80 M Grants +Contracts PeerDOE SBIR/STTR $166 M / $22 M Grants L/PNASA SBIR/STTR $145 M / $19 M Contracts L/PNSF SBIR/STTR $133 M / $18 M Grants PeerUSDA SBIR $19.3 M Grants PeerED SBIR $13.7 M IES: Contracts Line(IES & NIDRR) NIDRR: Grants PeerDHS SBIR/ - $12.6 M / - Contracts L/PDOT SBIR $8.6 M Contracts LineEPA SBIR $4.8 M Contracts L/PDOC SBIR $4.7 M Contracts Line(NOAA & NIST)

Participating Agencies

Page 35: SBIR/STTR as alternative financing for new business starts and new product/technology development

Contracting Agencieso Highly focused topicso Agency establishes plans,

protocols, requirementso More fiscal requirementso Subject to FARs, DFARso Restricted communicationso Agency may be buyer –

procurement mechanism for DoD, NASA

o Usually line-reviewed

Grants vs. Contracts:Granting Agencies

o Less-specific topicso Investigator initiates

approacho Assistance mechanismo More flexibilityo More open

communicationo Usually peer-reviewed

Page 36: SBIR/STTR as alternative financing for new business starts and new product/technology development

Line Reviewo Contracting agencies

(DoD, NASA, DHS) use SBIR to develop new technologies they need, want to eventually buy

o “Dual-use” is importanto Program Manager and

knowledgeable cohorts review proposals

o Personal knowledge, “insider” terminology useful

Line vs. Peer Review:Peer Review

o Markets and approach defined by submitter, meeting societal need of interest to agency

o Technical reviews by outside experts, usually university faculty

o Some use separate business review panel

o Agency PM makes final decision

Page 37: SBIR/STTR as alternative financing for new business starts and new product/technology development

o Know Your Customer! o Significant agency differences in proposal requirements,

technical focus, evaluation processeso For “peer review” agencies (e.g. NSF, NIH), reviewers are

typically subject matter experts at universities – consider what they might want to see

o For “line review” agencies (e.g. DoD, NASA), personal knowledge, interaction, & relationships are much more important

o Talk to TPOC before solicitation opens, if at all possibleo Do in-depth background research before talking to TPOC, to leave a good

impression

Critical Need for SBIR:

Page 38: SBIR/STTR as alternative financing for new business starts and new product/technology development

Plan Ahead: Registration ReqsDoD HHS/NIH DOE NASA NSF DHS USDA ED DOC EPA DOT

SBIR.gov SAM (sam.gov) DUNS (dnb.com) EIN (irs.gov) Grants.gov DoDSBIR.net eRA Commons (NIH.gov) FastLane (nsf.gov) PAMS (energy.gov) ASAP (asap.gov) FedConnect (fedconnect.net)

EHB (nasa.gov)

Page 39: SBIR/STTR as alternative financing for new business starts and new product/technology development

Agency Perspectives: DoDGeneral DoD Descriptionso Primary focus is on the warfighter

o Additional Service requirements alsoo Topics may cover nearly any technology area

o Many medical topics in Army solicitationo DARPA seeks most advanced technologies

o Moving back to longer-range insertiono Applicants should show strong connections to Service userso DARPA PMs may serve just 4 years, often “adopt” other Phase II proposals

o SOCOM wants quick deployment of practical technologyo Other Services in-between in level of technology o Navy has had most successful Phase III program

o Other Services modifying programs to improve transition

Page 40: SBIR/STTR as alternative financing for new business starts and new product/technology development

Agency Perspectives: DoD12 participating DoD Componentso Each with its own culture, needs, requirements, and SBIR

solicitation (6 with STTR)o Organizations within Services may vary as well

FY10 SBIR (STTR) $ Topics Ph I proposals Ph I awards Award Rates Ph II awards

Navy $343M ($41M) 232 (50) 4,098 (804) 666 (151) 16.3% (18.8%) 310 (46)Air Force $331M ($40M) 181 (37) 2,494 (309) 501 (125) 20.1% (40.5%) 282 (59)Army $244M ($29M) 176 (29) 3,240 (446) 434 (64) 13.4% (14.3%) 202 (22)MDA $90M ($11M) 35 (4) 553 (33) 126 (25) 22.8% (75.8%) 77 (12)OSD $86M ($6M) 64 (6) 915 (54) 143 (9) 15.6% (16.7%) 41 (3)DARPA $67M ($8M) 27 (0) 833 (0) 107 (9) 12.8% (N/A) 127 (16)CBD $15M 10 127 21 16.5% 19SOCOM $10M 8 142 23 16.2% 6DTRA $8M 17 307 21 6.8% 5DLA $2.4M 1 55 6 10.9% 2DMEA $2.2M 2 35 4 11.4% 0NGA N/A 0 0 0 N/A 0

Page 41: SBIR/STTR as alternative financing for new business starts and new product/technology development

Agency Perspectives: NIH• Largest part of HHS (NIH, CDC, FDA, ACF)• 24 Institutes & Centers (23 + Director’s Office w/ funding)

• “Parent” SBIR & STTR FOAs released January– Standard due dates Apr. 5th, Aug. 5th, Dec. 5th

– AIDS-related due May 7th, Sep. 7th, Jan. 7th

• SBIR Contract Solicitation (NIH, CDC) rel. In Aug.– Closes Nov. 13th

• Additional FOAs (PAs, RFAs) released periodically• Budgets (2012)

– NIH SBIR: $632M NIH STTR: $85M– CDC SBIR: $8.3M FDA SBIR: $1M– ACF SBIR: $350K

Page 42: SBIR/STTR as alternative financing for new business starts and new product/technology development

Agency Perspectives: NIHNIH Institutes & Centers relative SBIR/STTR budget allocations

Page 43: SBIR/STTR as alternative financing for new business starts and new product/technology development

Agency Perspectives: DOE• “Granting agency that acts like a contracting

agency”• Program undergoing major changes

– Now two solicitations per year (S&T Program Topics, Applied Program Topics)

– Now providing Technical Points of Contact for pre-solicitation period

– Requires Letter of Intent

• Note that DOE Program focus may not be what you’d expect:– Includes Defense nuclear nonproliferation, fossil fuels, nuclear

clean-up, as well as renewable energy and energy conservation

Page 44: SBIR/STTR as alternative financing for new business starts and new product/technology development

DOE Program Offices Participating DOE Program Offices Participating in SBIR/STTRin SBIR/STTR

New for FY12: ARPA-E SBIR/STTR

Programs

Defense Nuclear Nonproliferation

Energy Efficiency &Renewable Energy

Electricity Delivery &Energy Reliability

Nuclear Energy

Environmental Management

Fossil Energy

Advanced Scientific Computing Research

Basic Energy Sciences

Biological & Environmental Research

Fusion Energy Sciences

High Energy Physics

Nuclear Physics

DOE SBIR/STTR Programs Office

Goal 1: Clean Energy TechnologiesGoal 2: Science and Engineering LeadershipGoal 3: Nuclear Security

Page 45: SBIR/STTR as alternative financing for new business starts and new product/technology development

DOE SBIR vs. STTRDOE SBIR vs. STTR

• STTR: Small business collaborates with a non-profit research institution

• For both Phase I & II– Small business: >40%– Research Institution: >30%

• SBIR: Small business is required to perform the majority of the R&D– Phase I: >67%– Phase II: >50%

• DOE uses the same topics for SBIR & STTR• Applicants can apply to either or both programs with

a single application. If you apply to both programs, you must meet the requirements for both.

Page 46: SBIR/STTR as alternative financing for new business starts and new product/technology development

Agency Perspectives: NSF• National Science Foundation wants to see transformational, game-

changing technology based upon good science, real innovation, real risk– Peer reviews typically by university faculty in relevant fields– Your team should have recognized experts, published scientists in relevant fields of

science or technology, doing real research– NSF values strong industry/university collaborations– Likes to see commercialization of prior NSF-funded research– Especially values university spin-outs

• NSF has very strong focus on commercialization – Need to show significant market opportunity, ability to address it (e.g. partner/customer

support, incl. relevant letters of support)– NSF has led other agencies in support for, emphasis on commercialization planning and

broader impacts

Page 47: SBIR/STTR as alternative financing for new business starts and new product/technology development

Strategies for SBIR/STTR

Success

Page 48: SBIR/STTR as alternative financing for new business starts and new product/technology development

o Focus Strategicallyo Don’t chase money opportunities “just ‘cause we can”o Focus on opportunities that take you towards goals

o Work with customers (agencies) to create new opportunities

o Network, Collaborate, Partner! o Work with university researchers wherever possible

o Biggest single factor in winning Phase I SBIRo Partner with fed. labs, esp. if agency is target customer

o Cooperative R&D Agreements (CRADAs), Test Service Agreements may be paid for with SBIR/STTR funds

o Work with Prime Contractors where relevanto Can be subcontractor on SBIR/STTR

o Other partners for design, mfg., dist., service, etc.

Keys to Long-Term Success:

Page 49: SBIR/STTR as alternative financing for new business starts and new product/technology development

Consider a First Strategic Partnership:

The single greatest factor for SBIR (Phase I) success is partnering with a research institution (esp. a university).

- Observation noted by top SBIR experts and Program Managers

• Recognized scientific expertise adds credibilityRecognized scientific expertise adds credibility• University labs are significant sources of innovationUniversity labs are significant sources of innovation• University laboratory research facilities may be neededUniversity laboratory research facilities may be needed• University scientists have lots of technical proposal experienceUniversity scientists have lots of technical proposal experience

• DonDon’’t let them take lead in writing full proposal!!t let them take lead in writing full proposal!!

Page 50: SBIR/STTR as alternative financing for new business starts and new product/technology development

Advantages of a CRADA Advantages of a CRADA (Cooperative R&D Agreement)(Cooperative R&D Agreement)::• Tie into significant R&D capability at little or no costTie into significant R&D capability at little or no cost• Utilize specific R&D capability available nowhere elseUtilize specific R&D capability available nowhere else• Increase your perceived credibility based on partnershipIncrease your perceived credibility based on partnership• Become familiar with Agency (customer) needs, cultureBecome familiar with Agency (customer) needs, culture• Agency personnel become familiar with your capabilities Agency personnel become familiar with your capabilities

for potential advantages for potential advantages • Often opens doors for other funding opportunities Often opens doors for other funding opportunities

• SBIR/STTR plus the OTHER 96% - tremendous long-term value!SBIR/STTR plus the OTHER 96% - tremendous long-term value!

Note: federal law prohibits payment to company under a CRADA, while Note: federal law prohibits payment to company under a CRADA, while companies may pay lab for services, which may now be allowed as an companies may pay lab for services, which may now be allowed as an SBIR/STTR subcontract. SBIR/STTR subcontract.

Partnering with Federal Labs:

Page 51: SBIR/STTR as alternative financing for new business starts and new product/technology development

Partnering with Primes:Partnering with Primes:• Prime Contractors (Boeing, Raytheon, Prime Contractors (Boeing, Raytheon,

Lockheed, etc.) often seek out SBIR Lockheed, etc.) often seek out SBIR companies for partnering. companies for partnering.

• Can subcontract to Prime on an SBIR. Can subcontract to Prime on an SBIR. Amount may not be significant to them, Amount may not be significant to them, but future system enhancements, but future system enhancements, contract opportunities can be.contract opportunities can be.

• For SBIR company, tremendous future For SBIR company, tremendous future business opportunities for business opportunities for subcontracting, even business subcontracting, even business acquisition.acquisition.

• Caveat: Get professional advice Caveat: Get professional advice on IP, SBIR Data Rights (on IP, SBIR Data Rights (““7018 7018 ClauseClause””), before signing any ), before signing any agreements.agreements.

DoD Perspective:DoD Perspective: Partnering with Partnering with Primes shows Primes shows intent to transition intent to transition technology, and technology, and capability to do so.capability to do so.

Boeing SBIR/STTR [email protected] Lockheed Martin SBIR [email protected] [email protected]

Page 52: SBIR/STTR as alternative financing for new business starts and new product/technology development

SBIR and the Business Development

Timeline

Page 53: SBIR/STTR as alternative financing for new business starts and new product/technology development

Timeline: SBIR to CommercializationIdeal Case:

Year 1 Year 2 Year 3

“Perfect Match” SBIR topic

posted

Company:Experienced,Competent,Capable,Focused,Aggressive

Phase I Award

Year 4

Phase II Award

Prime Contractor / Commercial Partner:Relevant Contract,Technical Need,Eager to Partner,Willing to work with small business

Phase II Enhancement

Initial Product Introduction(Software)

Page 54: SBIR/STTR as alternative financing for new business starts and new product/technology development

Client Example: Client Example: Visual Learning Systems, Inc.Visual Learning Systems, Inc.Transition Success: Transition Success: Feature AnalystFeature AnalystTMTM Software Software

Technology: Technology: Software for automated feature extraction in hyperspectral or Software for automated feature extraction in hyperspectral or panchromatic images. Learning algorithms are orders of magnitude faster than panchromatic images. Learning algorithms are orders of magnitude faster than manual digitizing, also easy to train.manual digitizing, also easy to train.

• Developed under multiple SBIRs:Developed under multiple SBIRs:• 3 NASA SBIR awards, 3 NSF 3 NASA SBIR awards, 3 NSF • Army TEC Ph. I & II, NAVAIR Ph. I & IIArmy TEC Ph. I & II, NAVAIR Ph. I & II

• CRADAs & Partnerships with GovCRADAs & Partnerships with Gov’’t:t:• Army TEC & NUWC CRADAsArmy TEC & NUWC CRADAs• NASA TCA NASA TCA • NIMA & NRO partnershipsNIMA & NRO partnerships

• Partnered with Primes: Partnered with Primes: • ESRI, Leica, BAE, IntergraphESRI, Leica, BAE, Intergraph

Chosen by NGA for deployment across all NGAChosen by NGA for deployment across all NGA’’s Integrated Exploitation s Integrated Exploitation Capability (IEC) workstations – Now Dual-Use (Commercial & Military) Success!Capability (IEC) workstations – Now Dual-Use (Commercial & Military) Success!

Page 55: SBIR/STTR as alternative financing for new business starts and new product/technology development

NSF Phase I

Timeline: Feature Analyst Transition

1998

Company:Integrated Geosciences

TCA with NASA JPL

1999 2000 2001 2002 2003 2004 2005

NASA Stennis Phase I

NASA Stennis Phase II

ESRI partnership

Army TEC Phase I award

Army TEC Phase II award

Feature Analyst for

ArcGIS

NGA Product Adoption

(Integrated Exploitation Capability)

New Company:Visual Learning Systems

NASA JPL

Phase I

NAVAIR Phase I award

NAVAIR Phase II award

Army TEC CRADA

NUWC CRADA

NIMA “Big

Ideas”

NRO Fastmax

NIMA BAA

NRL contract

NSF Phase II

USFS Testing

Leica Geosystems partnership

FA for ERDAS

BAE Systems partnership

FA for SOCET SET

Army TEC

Phase II award

Army TEC

Phase I award

OverwatchAcquisitionTextron

Acquisition

$325M

Page 56: SBIR/STTR as alternative financing for new business starts and new product/technology development

o Sign up for PNNL’s free SBIR Alert:o http://www.pnl.gov/edo/opportunities/sbir.stm

o Attend SBIR conferences and workshops as ableo Network at relevant industry & technology conferences

o For Defense, check out NDIA

o Other relevant SBIR resources:o SBIR Gateway: www.zyn.com/sbir

o “Insider” news, agency links, calendar, and best historical topic database to search - can help determine relevant agency interests, find DoD contacts.

o SBIR.gov – “Official” central government SBIR websiteo Greenwood Consulting Group, proposal writing tips:

o http://www.g-jgreenwood.com/sbir_proposal_writing_articles.htm

Getting Started in SBIR/STTR