SBIR/STTR Overview

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Extramural Programs Reserved for Small Business
SMALL BUSINESS INNOVATION RESEARCH (SBIR)
PROGRAM SMALL BUSINESS TECHNOLOGY TRANSFER
(STTR) PROGRAM
Updated 03/21/02 (JGLE)
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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
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Course 101 SBIR/STTR Basics General
Features and Agency Nuances
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Program Descriptions

• SBIR Set-aside program for small business
• concerns to engage in federal RD --
• with potential for commercialization.
• STTR Set-aside program to facilitate
• cooperative RD between small
  business concerns and U.S. research
  institutions -- with potential for
  commercialization.

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SBIR/STTR 3-Phase Program

• PHASE I
• Feasibility study
• 100K and 6 months (SBIR)
• or 12 months (STTR)

• PHASE II
• Full R/RD
• 2-Year Award and 750K (SBIR)
• or 500K (STTR)

• PHASE III
• Commercialization Stage
• Use of non-SBIR Funds

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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
• business during project
• 500 or fewer employees

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Some important facts to remember

• Eligibility is determined at time of award
• No appendices 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

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SBIR AND STTR PROGRAMSCRITICAL DIFFERENCES

• Research Partner
• SBIR Permits (encourages) research
• institution partners
• 33 Phase I
  and 50 Phase II RD
• STTR Requires research institution
• partners (e.g., universities)
  
• 40 small business and 30
  research institution

AWARD ALWAYS MADE TO SMALL BUSINESS
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SBIR AND STTR PROGRAMSCRITICAL DIFFERENCES

• Principal Investigator
• SBIR Primary (gt50) employment must be
  with small business concern
• STTR Primary employment not stipulated
• PI can be from research institution
  and/or
• from small business concern

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SBIR PROGRAM

• Program re-authorized through FY 2008
• 10 agencies with RD budgets greater than 100
  million participate
• Amounts to be set-aside of RD budget
• FY 1987-92 1.25
• FY 1993-94 1.5
• FY 1995-96 2.0
• FY 1997 and beyond 2.5

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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

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Were all just a little bit different ...
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Agency SBIR/STTR Differences

• RD 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

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Agency SBIR/STTR Differences

• Granting Agencies
• Investigator initiates
• approach
• Less-specified topics
• Assistance mechanism
• More flexibility

• Contracting Agencies
• Agency establishes plans,
• protocols, requirements
• Highly focused topics
• Procurement mechanism
• for DOD and NASA
• More fiscal requirements

DOD HHS/NIH NASA DOC EPA DOT ED
HHS/NIH DOE NSF USDA ED
Awards Grants and Contracts
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SBIR vs STTR UNIQUE FEATURES
SBIR STTR
Set-Aside of Agency Budget 2.5
0.15
FY02 SBIR/STTR Budget 1.3 Billion
Award Guidelines Phase I 100K/6mos
100K/12 mos. Phase II 750K/2 yrs
500K/ 2 yrs
Business Employment of PI gt50
n/a
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Advice from Awardees

• Dont judge an agencys interests by
• its name
• Understand agencys mission needs
• Get to know your agency Program
• Manager
• Read solicitation and follow
• instructions

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Advice from Awardees

• Dont depend solely on SBIR funding
• Dont go it alone - use support systems
• Have an outcome
• Win or lose - get and review evaluations
• Be PERSISTENT

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Course 201 SBIR/STTR History and
Law Legislative Background and Relationship
Dynamics
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WHY SBIR????
Small Business Innovation Development Act of 1982

• Congress designated 4 major goals

• Stimulate technological innovation

• Use small business to meet federal RD needs

• Foster and encourage participation by minorities
  and disadvantaged persons in technological
  innovation

• Increase private-sector commercialization
  innovations derived from federal RD

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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
  RD
• Improve dissemination of information on SBIR
  Program

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2000 REAUTHORIZATION
MAJOR PROVISIONS OF P.L. 106-554 Signed 12/21/00

• 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)

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2000 REAUTHORIZATIONcontinued
MAJOR PROVISIONS OF P.L. 106-554 Signed 12/21/00

• National Research Council report (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

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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

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SBIR/STTR Historical Relationships
1982
1997
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SBIR/STTR Historical Relationships
1998
1982
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SBIR/STTR Historical Relationships
2000
1982
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Course 301 Research Institutions and SBIR/STTR
Universities / Industry Partnerships and Cultural
Differences
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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

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University and IndustryTwo 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

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University and IndustryTwo diverse cultures

• Industry culture
• Mission toward research / RD /
• 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

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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

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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

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ExamplesSuccessful EntrepreneurialResearch
Institutions

• The Ohio State University
• Purdue University
• University of Wisconsin -
• Madison

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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

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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

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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
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An Example of A Successful Entrepreneurial
Research Institution

• Purdue University
• Environment for business to have
• frequent and mutually beneficial
• interactions with University
• Policies / Procedures to address COI --
• not to eliminate, but to minimize and
• manage

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An Example of A Successful Entrepreneurial
Research Institution

• Purdue University --
• COI Policies and Procedures
• Contact Department Heads/Deans
• Disclose all potential COIs
• Obtain permission to engage in outside
  activities
• Full Financial Disclosure if subcontracting
  with RI
• Appropriate licensing agreements
• Compensation for phone, computers, etc.

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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

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

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