Extramural Programs Reserved for Small Business SMALL BUSINESS

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

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

Course 101 SBIR/STTR Basics General Features and Agency Nuances

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.

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

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

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

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

SBIR AND STTR PROGRAMS CRITICAL 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]

SBIR/STTR Participating Agencies TOTAL ~ $1. 3 B FY 2002 • • • DOD HHS NASA DOE NSF USDA DOC EPA DOT ED SBIR/STTR SBIR/STTR SBIR SBIR

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

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: ü Profit or fee allowed ü Phase I to Phase II gap funding ü Payment types and schedule

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

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

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

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

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

1992 REAUTHORIZATION PURPOSES OF P. L. 102 -564, SIGNED 10/28/92 • • Expand 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

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)

2000 REAUTHORIZATION [continued] 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

2001 STTR REAUTHORIZATION • • Reauthorized through FY 2009 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

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

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

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

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

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

University and Industry: Two diverse cultures University culture u u u 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

University and Industry: Two diverse cultures Industry culture u u u Mission toward 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

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

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

Examples Successful Entrepreneurial Research Institutions • The Ohio State University • Purdue University • University of Wisconsin Madison

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

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

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

SUCCESS STORY • Endocyte, Inc. (Purdue Research Park) l l 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 v ADVICE: Hire experienced CEO to handle all but science v BENEFIT: Purdue retains talent

Final Exam The Top 10 List

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 $$$

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

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

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

For more information…. . l Contact individual agency websites l Cross-agency website: http: //www. sbirworld. com/sbir èConferences / workshops èTopic search engine for all agencies èPartnering Opportunities èState Newsletters