Extramural Programs Reserved for Small Business

1. Extramural Programs Reserved for Small Business SMALL BUSINESS INNOVATION RESEARCH (SBIR) PROGRAM SMALL BUSINESS TECHNOLOGY TRANSFER (STTR) PROGRAM Updated 03/21/02 (JGLE)

2. SBIR/STTR -- A Four Course Overview Course 101 SBIR/STTR Basics Course 201 SBIR/STTR History and Law Course 301 Research Institutions and SBIR/STTR Final Exam Top Ten

3. Course 101 SBIR/STTR Basics General Features and Agency Nuances

4. Program Descriptions • SBIR: Set-aside program for small business concerns to engage in federal R&D -- with potential for commercialization. • STTR: Set-aside program to facilitate cooperative R&D between small business concerns and U.S. research institutions -- with potential for commercialization.

5. SBIR/STTR: 3-Phase Program • PHASE I • Feasibility study • $100K and 6 months (SBIR) or 12 months (STTR) • PHASE II • Full R/R&D • 2-Year Award and $750K (SBIR) or $500K (STTR) • PHASE III • Commercialization Stage • Use of non-SBIR Funds

6. SBIR PROGRAM ELIGIBILITY CHECKPOINTS • Organized for- profit U.S. business • At least 51% U.S.-owned and independently operated • Small Business located in the U.S. • P.I.’s primary employment with small businessduring project • 500 or fewer employees

7. Some important facts to remember • Eligibility is determined at time of award • Noappendices allowed in Phase I • The PI is not required to have a Ph.D. • The PI is required to have expertise to oversee project scientifically and technically • Applications may be submitted to different agencies for similar work • Awards may not be accepted from different agencies for duplicative projects

8. SBIR AND STTR PROGRAMSCRITICAL DIFFERENCES • Research Partner SBIR:Permits (encourages) research institution partners [ ~ 33% Phase I and 50% Phase II R&D] STTR:Requiresresearch institution partners(e.g., universities) [ 40% small business and 30% research institution] AWARD ALWAYS MADE TO SMALL BUSINESS

9. SBIR AND STTR PROGRAMSCRITICAL DIFFERENCES • Principal Investigator SBIR: Primary (>50%) employment must be with small business concern STTR: Primary employment not stipulated [PI can be from research institution and/or from small business concern]

10. TOTAL ~ $1.3 B FY 2002 SBIR/STTR Participating Agencies • DOD SBIR/STTR • HHS SBIR/STTR • NASA SBIR/STTR • DOE SBIR/STTR • NSF SBIR/STTR • USDA SBIR • DOC SBIR • EPA SBIR • DOT SBIR • ED SBIR

11. We’re all just a little bit different ...

12. Agency SBIR/STTR Differences • R&D Topic Areas • Dollar Amount of Award (Phase I and II) • Receipt Dates / Number and Timing of Solicitations • Proposal Review Process • Proposal Success Rates • Type of Award (Contract or Grant) • Many other details: • Profit or fee allowed • Phase I to Phase II gap funding • Payment types and schedule

13. Agency SBIR/STTR Differences • Contracting Agencies • Agency establishes plans, protocols, requirements • Highly focused topics • Procurement mechanism for DOD and NASA • More fiscal requirements • Granting Agencies • Investigator initiates approach • Less-specified topics • Assistance mechanism • More flexibility DOD HHS/NIH* NASA DOC EPA DOT ED* HHS/NIH* DOE NSF USDA ED* * Awards Grants and Contracts

14. Advice from Awardees • Don’t judge an agency’s interests by its “name ” • Understand agency’s mission & needs • Get to know your agency Program Manager • Read solicitation and follow instructions

15. Advice from Awardees • Don’t depend solely on SBIR funding • Don’t go it alone - use support systems • Have an outcome • Win or lose - get and review evaluations • Be PERSISTENT

16. Course 201 SBIR/STTR History and Law Legislative Background and Relationship Dynamics

17. WHY SBIR???? Small Business Innovation Development Act of 1982 Congress designated 4 major goals • Stimulate technological innovation • Use small business to meet federal R&D needs • Foster and encourage participation by minorities and disadvantaged persons in technological innovation • Increase private-sector commercialization innovations derived from federal R&D

18. 1992 REAUTHORIZATION PURPOSES OF P.L. 102-564, SIGNED 10/28/92 • Expand and improve SBIR Program • Emphasize goal of increasing private sector commercialization • Increase small business participation in federal R&D • Improve dissemination of information on SBIR Program

19. 2000 REAUTHORIZATION • Program Extension until 9/30/2008 • Output and Outcome Data (within 180 days) - Public Database: basic award information (searchable, up-to-date, electronic database) - Government Database: program evaluation (Phase II awardees -- e.g., new product sale revenues; other investment funding sources) MAJOR PROVISIONS OF P.L. 106-554; Signed 12/21/00

20. 2000 REAUTHORIZATION[continued] • National Research Councilreport(3 years) • Policy Directive Modifications (SBA) - Commercialization Plans: Phase II proposals - Agency Reports: Follow-on funding agreements • FAST Program (Federal & State Partnership Program) - State-level Entity: One per State - Mentoring Networks: Business advice & Counseling MAJOR PROVISIONS OF P.L. 106-554; Signed 12/21/00

21. 2001 STTR REAUTHORIZATION • Reauthorized through FY2009 • Set-aside increased from 0.15% to 0.30% in FY 2004 • Phase II award levels increased from $500,000 to $750,000 in FY 2004 • Participating agencies to implement similar outreach efforts as SBIR

22. Federal Government Small Businesses SBIR/STTR: Historical Relationships 1982 1997

23. Federal Government State Government  Quasi-Government Corporations  Economic Development Entities  Technology Centers Small Businesses SBIR/STTR: Historical Relationships 1998 1982

24. Federal Government State Government  Quasi-Government Corporations  Economic Development Entities  Technology Centers Academia Small Businesses  University Research Parks  Faculty & Graduate Students  Technology Incubators  Research Foundations SBIR/STTR: Historical Relationships 2000 1982

25. Course 301 Research Institutions and SBIR/STTR Universities / Industry Partnerships and Cultural Differences

26. Research Institution Partnership Opportunities • Own small firms (assign someone else PI) • Principal Investigator (with official permission from University) • Senior Personnel on SBIR/STTR • Consultants on SBIR/STTR • Subcontracts on SBIR/STTR • University facilities provide analytical and other service support

27. University and Industry:Two diverse cultures University culture • Research to educate, break ground, provide service (economic development) • Pace is slower • Mission = basic and applied research • Technology transfer activities are companion to applied research mission • Fertile ground for economic development

28. University and Industry:Two diverse cultures Industry culture • Missiontoward research / R&D / commercialization • Quick-paced • Solve problems - develop new products - profit • Maintain control of science to explore full potential of discovery (initially) • Direct and indirect economic impact

29. FLEXIBILITY is KEY! CULTURAL DIVERSITY That was then… This is now… University - Industry Relationships • Universities are establishing creative and entrepreneurial environments for the commercialization of university intellectual property • Universities and Industry learning to work together

30. Entrepreneurial Research Institution Key Ingredients • Develop common goals between faculty-initiated business and mission of research institution • Create entrepreneurial environment while protecting interests of University • Establish policies to manage, reduce or eliminate conflict of interest (COI) • Retain intellectual talent

31. ExamplesSuccessful EntrepreneurialResearch Institutions • The Ohio State University • Purdue University • University of Wisconsin - Madison

32. An Example of a Successful Entrepreneurial Research Institution (cont.) • The Ohio State University • Establish entrepreneurial management expertise, realistic business plan, sufficient access to capital • Proper management of COI management plans • financial interest disclosure • management of gift monies thru impartial University officials • limitation of employees’ ownership interest/management roles

33. An Example of a Successful Entrepreneurial Research Institution (cont.) • The Ohio State University Models: Start-ups involving RI employees • Managed Start-Up Model • Faculty-Owned Business Model • Early Stage Development Model • Entrepreneurial Leave Model http://www.techtransfer.rf.ohio-state.edu

34. An Example of A Successful Entrepreneurial Research Institution • Purdue University Purdue Research Park • 3 business incubators • Companies benefit from shared office concept, flexible leases, attractive rental rates, and more ... • Gateways Program • Financial assistance http://www.adpc.purdue.edu/PRF/main.html

35. SUCCESS STORY • Endocyte, Inc.(Purdue Research Park) • Researcher, Philip Low, discovered way to diagnose, potentially cure, ovarian cancer using vitamin folate • Sell technology or start own company to develop and market treatment???? • Resisted VC offers: wanted control of science • Now exploring use of folate in arthritis • ADVICE: Hire experienced CEO to handle all but science • BENEFIT: Purdue retains talent

36. Final Exam The Top 10 List

37. Top 10 Reasons to Seek SBIR/STTR Funding Opportunities 10. Over $1.3 Billion available 9.NOT A LOAN - no repayment 8. Provides recognition, verification and visibility 7.Potential leveraging tool to attract venture capital/other sources of $$$

38. Top 10 Reasons to Seek SBIR/STTR Funding Opportunities 6. Fosterspartnerships (e.g., large corporations, academia) 5. Creates jobs and generates tax revenues 4. Provides seed money to fund high risk projects

39. Top 10 Reasons to Seek SBIR/STTR Funding Opportunities 3.Intellectual property rights are normally retained by the small business 2. Small business concerns are recognized as a unique national resource of technological innovation

40. Top 10 Reasons to Seek SBIR/STTR Funding Opportunities 1. To make economic and societal contributions to America

41. For more information….. • Contact individual agency websites • Cross-agency website: http://www.sbirworld.com/sbir • Conferences / workshops • Topic search engine for all agencies • Partnering Opportunities • State Newsletters