National Science Foundation Industrial Innovation Funding

1. National Science FoundationIndustrial Innovation Funding F. C. Thomas Allnutt Division of Industrial Partnerships & Innovation Vermont June 2008 - overview

2. The NSF Mission • To promote the progress of science and engineering • To advance the national health, prosperity, and welfare • To secure the national defense

3. Directorate forEducation and Human Resources Directorate forComputer andInformation Science and Engineering Directorate forBiologicalSciences Directorate for Social, Behavioral, and Economic Sciences Directorate for Mathematical and Physical Sciences Directorate for Geosciences Office of Polar Programs Integrative Activities (MRI, STC) Industrial Innovation and Partnerships (IIP) NSF is… National Science Board IG Office Director Staff Offices Directorate for Engineering

4. Division of Industrial Innovation and Partnerships (IIP) • Link basic research to the marketplace • Cross-cutting programs • SBIR • STTR • I/UCRC (Industry University Cooperative Research Centers) • PFI (Partnerships for Innovation)

5. SBIR & STTR Programs • 2.5% of NSF budget SBIR • 0.3 % of NSF budget STTR • Goal is to move science from the bench to the marketplace

6. Bridging the “Valley of Death” Prototypes Small Business Tech Development Business Development Seed Funding NSF SBIR Business Startups; Expansions • Research • and Education • Univ. • R&D Labs

7. TOTAL ~ $2.3BEst. FY 2008 Participating Agencies • DOD Defense • HHS Health • NASA Space • DOE Energy • NSF ~$110 Million • DHS Homeland Security • USDA Agriculture • DOC Commerce • EPA Environment • DOT Transportation • DoED Education

8. NSF SBIR/STTR Innovation Model Taxes Federal Investment Phase IIBThird-PartyInvestment + 1:2 NSF Matching Phase I BThird-PartyInvestment + 1:2 NSF Matching Unique to NSF Private Sector or Non-SBIR Investment MATCH MAKER PHASE I Feasibility Research $100k/6 mos PHASE III Product Development to Commercial Market PHASE II Research towards Prototype $500k/24 mos

9. Doing Business with NSF • NSF is not the Final Customer • NSF is not buying a product, process, software, or intellectual property • NSF wants to see the grantee successfully commercialize the innovation • Company needs investment dollars beyond NSF SBIR/STTR

10. SBIR/STTR Reviews • Technical Review • Technical Merit • Broader Impact • Commercial Review • Team • Market Opportunity • Technology, IP, and Competition • Financial Plan

11. Remember the Supplements!http://www.nsf.gov/eng/sbir/phase_iib.jsphttp://www.nsf.gov/eng/iip/sbir/supplemental_requests.jsp • IB – Gap Funding • Max $50K (1:2) match for third party funds • IIA – Minority Partnership • Max $150K partnership with a CREST institute to delve deeper into the technology 30:70 (grantee : institute) • IIB – Third-Party Leverage • Max $500K (1:2) match for third party funds • IICC – Leverage of Community College • Max $40K partnership with a MSCC institute to delve deeper into the technology 25:75 (grantee : institute) • REU/RET – Increased Human Capital

12. IIB Supplement • Supplemental Research to Phase II • Bridge the gap between Phase II and Phase III • Third-Party match required • Third-Party can be Private, State, or Federal

13. NSF/SBIR Phase IIB Success

14. Takeaway • Many SBIR/STTR programs out there! • At NSF ~$110M/year granted primarily for seed-stage development in… • Software & Systems (SS) • Biotechnology & Chemical Technologies (BC) • Electronics (EL) • Program to mitigate technical risk and bridge the “Valley of Death” • Investment in Country’s Innovation Capacity

15. Questions?? Useful Links: www.sbir.gov(SBIR Resource/gov run) www.zyn.com/sbir/(SBIR Gateway) www.nsf.gov/eng/iip/sbir/(NSF SBIR homepage) Contact info: Tom Allnutt email: tallnutt@nsf.gov phone: 703-292-5332

16. IB Supplement • Bridge gap between Phase I & Phase II • Foster partnerships with investors and attract third party funding • Maximum award $50,000 based on a third party investment of $100,000

17. IIA Supplement - Minority Partnership • Consistent with the SBIR Legislation • encourage minority participation • Opportunity to further enhance the science and engineering research underlying the SBIR technology • Phase IIA is a supplement to an active Phase II grant

18. Phase IIA Minority Partnership (continued) • Requires a Phase II grantee to partner with a CREST/RISE grantee: http://www.nsf.gov/pubs/2005/nsf05/nsf0520.pdf • Budget not to exceed $150, 000 • SBIR portion <30% • CREST/RISE portion >70%

19. Phase IIB Review • Reviewed in-house • Submission must be within original 24 month award period • Reviewed by at least two NSF Program Officers • Two Criteria • Award recommendations within 90 days from the two closing dates of September 1, 2006 and March 1, 2007 • Minimum $100,000 total Third-Party investment (s)

20. Phase IIB Information • NSF will match 50% of the funds received • Overall total (Phase II & Phase IIB) cannot exceed $1,000,000 • Payment schedule (50% with the supplemental award, 50% with the submission and approval of 6 month interim report) • Extends Phase II grant by one (or two) year (s)

21. IIB Third-Party Funds Can Come From . . . • Another company • Venture capital firm • Individual “angel” investor • State Government • Local Government • Non-SBIR Federal Government • Any combination of the above

22. MatchMaker Phase III Goal - Link Early Stage Investors and Strategic Corporate Partners with Qualified Phase II Grantees

23. MatchMaker “Value-Added” • NSF Program Officers have done “due diligence” on companies • Because of NSF Program selectivity Corporate Partners will receive targeted matches • Through MatchMaker Corporate Partners will be locked into Future opportunities

24. MatchMaker – Grantee Criteria • Definitive plan to protect intellectual property • Consent to NSF SBIR to provide reference for company • Phase II proposal ended 5 years ago or less • Good standing within the SBIR program

25. MatchMaker Connection • Mailbox (SBIRmatch@nsf.gov) was created to allow potential investors and PI’s to register • Program Manager matches their PI’s with potential investors and makes the introduction • MatchMaker Coordinator manages the mailbox and maintains the database