~Funding Innovation with
the Federal SBIR and
STTR Programs~
CNY Technology Development
Organization
Marcene Sonneborn
September 13, 2006
Program sponsored by
Rensselaer Polytechnic Institute
~
Center for Economic Growth (CEG)
~
CNY Technology Development Organization
Statewide Program Objectives
– To stimulate and encourage broader SBIR
and STTR participation
– To increase the number of awards at all
levels (Phases I, II and III)
– To outreach to small businesses
– To provide assistance in applying for
awards
– To assist with commercialization
Reasons to Be Interested in SBIR
• Companies must innovate to stay competitive in a
global economy
• Innovation is high-risk
• R&D is expensive
• Commercialization can reap rewards for corporations
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New products
Intellectual assets
Royalties, new venture partnerships
New Opportunities!
Reasons to Be Interested in SBIR
• Non-profit research funds at universities are at risk
• Congress demands return on investment for R&D
programs
• The U.S. supports technology development to
meet national objectives in military, commerce,
health, education, space, energy, agriculture,
transportation, the environment and basic science
Things to Think About
• Commercial application is the focus of
SBIR and STTR
– Provides good ROI evidence
• Market and customer need is the driving
force
• Economic prosperity for the U.S.
– Job creation
– Richer tax payers
– Keep the U.S. globally competitive
SBIR/STTR
• What are SBIR and STTR, and what do
they fund?
• How To Apply
• What Do You Need To Know About Writing
the Proposal?
What does SBIR/STTR fund?
• Exploitation of scientific breakthroughs
• Innovation through the use of emerging
technologies
• Novel application of existing technologies
• New capabilities or major improvements to
existing technologies
Selected Topics
Examples of topics funded by
the 11 federal agencies that
participate in SBIR
Department of Defense
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Simulation, training
Faster, lighter, cheaper materials and equipment
Command, control, communications
Battlefield warfare; Information warfare
Battlefield survival and medical items
Chemical, biological, nuclear weaponry and
defense or detection systems
Health-Related Topics
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Clinical treatment research
New therapies
Pharmaceutical development
Clinical trials and drug evaluation studies
Diagnostic and prognostic equipment/ tools
Prevention techniques, education, training
materials, etc.
Examples from National Science
Foundation
• Four Broad Areas of Technology:
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Advanced Materials and Manufacturing
Biotechnology
Electronics
Information-Based Technologies
Department of Energy
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Drinking water disinfection
Particulate matter
Ecosystem protection
Air pollutants and indoor air
Waste site risk characterization
Waste management and site remediation
Endocrine disruptors
Department of Transportation
• FAA
– Ultra fire resistant thermoplastics
• National Highway Traffic Safety
Administration (NHTSA)
– Tire failure warning sensor
• Federal Railroad Administration
– Safety Glazing Design for passenger rail
vehicles
• U.S. Coast Guard - e.g., night vision
NASA
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Aero Propulsion and power, aircraft systems
Safety, reliability and quality assurance
Materials and structures
Teleoperators and robotics
Information systems and computer sciences
Instrumentation and sensors
Space habitability and biology
Space communications
Commercial space applications
Department of Commerce
– NOAA:
• Atmospheric sciences
• Ocean observation systems and living marine
resources
• Cartography and photogrammetry
– NIST:
• Materials, intelligent control
• Measurement and standards
• Integration of manufacturing applications
Department of Agriculture
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Forests and related resources
Air, water, soils
Plant production and protection
Animal production and protection
Food science and nutrition
Rural and community development
Production using agricultural materials
Marketing and trade
Environmental Protection Agency
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Nanomaterials and clean technology
Prevention and control of air pollution
Treatment/Monitoring of drinking water
Municipal and industrial wastewater treatment
Hazardous waste management and site
remediation
• Recycling of municipal and industrial solid waste
• Monitoring and measurement technologies
• Environmental bioterrorism detection and
decontamination
SBIR Web Sites
(Cross-Agency)
http://www.sbirworld.com
http://www.zyn.com/sbir/
What is SBIR?
• Federal Legislation
• Federal Incentives
• Phases I, II, and III
• Eligibility
Three Phases of SBIR
• Phase I: Scientific and technical
feasibility (Six months)
• Phase II: Concept refinement,
generally leading to prototype
(Two years)
• Phase III: Commercialization
(non-SBIR funded phase)
History of SBIR Program
• 1982 - Congress passed the Small Business
Innovation Development Act
• 1986 - Reauthorization
• 1992 - Congress extended SBIR and created
STTR
• 2000 - Renewal until 9/30/08
• 2001 – STTR renewal until 9/30/09
Purposes of SBIR/STTR
• To stimulate technological innovation
• To use small businesses to meet federal research
and development needs
• To encourage participation by minority and
disadvantaged persons
• To increase the commercialization of products and
services from federal R&D assistance
• To emphasize private sector commercialization of
SBIR research
What is STTR?
– Small Business Technology Transfer
Program
– Created in 1992
– Cooperative R&D between small
business and research institutions
– Joint venture introducing
entrepreneurial skills to high-tech
research efforts
SBIR/STTR Differences
– SBIR
• 11 agencies participate
• Two-thirds (minimum) of funds spent inside the company
• One-third spent on outside consultants or resources
• SBIR is 2.5% of external R&D budget
– STTR
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6 agencies participate
Company performs at least 40% of work
Research institution performs at least 30% of work
STTR is 0.3% of external R&D budget –
Allocation of Rights agreement required
Phase I term is up to one year
Topics may be limited, different cycle than SBIR
Eligibility for SBIR/STTR
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American-owned,independently operated
For-Profit business less than 500 employees
Not dominant in the proposed field of operation
The Principal Investigator is employed by the
business over 50% time (SBIR)
• Research space must be available to and under the
control of the SBIR grantee for the company’s
portion of the proposed project
STTR Qualifications
– American-owned, independently operated
– For-profit
– Principal researcher need not be employed by
small business
– Company size limited to 500 employees (no
size limit for non-profit research institution)
– Research institution must be in U.S.
SBIR APPLICATION PROCESS
• How Do I Apply?
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Identifying Topics
Contacting Agencies
Preparing the Proposal
Following Up
Resubmitting
How Do I Apply?
1. Identify topics funded by each agency
that relate to your company’s R&D interest:
– Link from http://www.sbirworld.com/
– Links to SBIR Info Sources
– SBIR Solicitation Schedule
– STTR Solicitation Schedule
Agencies Offering SBIR and STTR
Awards
• Eleven SBIR agencies and five STTR agencies:
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Department of Agriculture
Department of Commerce
Department of Defense - also STTR
Department of Education
Department of Energy - also STTR
Health and Human Services - also STTR
– National Institutes of Health
– Health Care Financing Administration
Department of Homeland Security – also STTR
Department of Transportation
Environmental Protection Agency
National Aeronautics and Space Administration - also STTR
Number of SBIR Awards
General Example
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Department of Defense
2,383
Health and Human Services
1,265
National Aeronautics and Space Administration 447
National Science Foundation
305
Department of Energy
325
Department of Agriculture
125
Department of Commerce
97
Department of Education*
70+
Environmental Protection Agency
55
Department of Transportation
30
SBIR Funding Agencies
• For SBIR - 2.5% allocated from agency’s
extramural R&D budget
• Over $2.2 Billion in FY 06
• Approximate breakdowns:
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DOD = 45% of dollars in the SBIR program
HHS = 25%
NASA = 13%
DOE = 8%
NSF = 5%
EPA, USDA, DOC, DOT, DoEd = 4%
• For STTR, FY06 funding = Over $65 million
How Do I Apply?
2. Review Solicitation information:
– SBIR/STTR Solicitation Schedules
– Guidelines
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Requirements - technical and personnel
Award amounts
Application and submission details
Forms and budget guidelines
– Research funded in the past
– Sample or model proposals
How Do I Apply?
3. Contact each agency
Treat each agency as you would treat any
customer - “market to them”
Learn why the agency is funding the topic
– Technical questions before “Release Date”
– Only administrative questions after release
– DOD has a pre-release period
– HHS and Agriculture not concerned about
release date restrictions
Preparing a Phase I Proposal
• Elements of the Application
– Abstract
• Identify the problem and your solution
• Why the problem is important
• Why the solution will work
• Your methodology and qualifications
• Expected results and benefits
Preparing a Phase I Proposal
• Elements of the Application
– Technical Description and Work Plan
• Background
• Technical approach
• Objectives
• Task descriptions
• Schedule, e.g., Gantt and PERT charts
• Deliverables
Preparing a Phase I Proposal
– Personnel and Facilities
• Principal Investigator and Key Personnel
• Industry Partners and Recognized Consultants
– Commercial Potential, Anticipated Benefits
– Plans for Phase II
– Budget and Justification
• Commercialization Planning
– Who will benefit, who will buy
– Identify a pathway to commercial use
Qualifications of Personnel
• Persuade reviewers of PI’s qualifications
• Describe contributions of consultants
• Describe what each will do, when, and
relation to the research goals
• Select the right consultant
– Letter from consultant stating contribution
• Condense biographies to relevant information
Preparing a Proposal Budget
• Realistic budget based on work plan
– One month of PI time on Phase I, two months
on Phase II (example)
– Adequate hours of engineering and technical
personnel
– Travel directly related to the project only
– Justification of direct cost items
– Equipment and facilities included, or
arrangements described
– Profit rate between 5-8% (usually 7%)
Commercial Applications
• Persuade the reviewer that commercial market
exists
• Provide detailed supporting statements
• Demonstrate knowledge of the commercial area
• Think creatively about possible applications
• Concisely describe the plan to commercialize
• Describe previous success in converting R&D
into new products
• Focus on large potential markets
• Include government applications
Description of Commercial Potential
• Significant competitive advantages the new
technology has over the existing in:
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Major competitive products
Application
Performance
Technique
Efficiency
Cost
• Your plan to move from research to market
SBIR as Part of a Business
Strategy
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Plan for growth and financing needs
Develop a roadmap for your company
SBIR/STTR provides credibility
Not equity or a loan
Is timeline realistic for your organization?
Is timeline realistic for your technology and
markets?
• Submitting multiple proposals
SBIR as a Business Strategy
Academic-Corporate Alliances
Fit with overall goals and
objectives
Intellectual Property Issues
Commercialization
Opportunities
Points to Remember
• Tremendous diversity among agencies,
programs, solicitations, reviewers, and
winning proposals
• No guaranteed “WIN” strategies
• Guidelines and suggestions based on ten
agencies and regional companies’
experiences
• The SBIR program is not static
– Look for evolutionary changes
Sources of Commercialization
Assistance
• Local colleges and universities
– Business and Management programs
– Information Studies
– Communications departments
• Regional RTDCs and university programs
• Trade and professional associations
• State and Federal programs and events
Thank You
www. tdo.org