Using Crane's inventions to start a business SBIR/STTR Funding Fundamentals Accessing America’s Seed Funds in Indiana Lisa R. Sproul Hoverman, PhD State of IN SBIR/STTR Program Director

Session Overview Introduction & America’s Seed Funds State of IN Support for SBIR/STTR Indiana SBIR/STTR Program Services Indiana Matching Funding for SBIR/STTR Awardees Review Q & A

Introduction – Who we Are Indiana Procurement Technical Assistance Center (PTAC) - part of Indiana Economic Development Corporation (IEDC) administers support for Federal SBIR/STTR Program in IN PTAC purpose is to generate employment and improve the general economic condition of the state by assisting Indiana companies including those eligible for preferential consideration in obtaining and performing under local, state and federal government contracts

Introduction – SBIR/STTR SBIR (often pronounced ‘esber’): Small Business Innovation Research grant or contract STTR (often pronounced ‘ester’): Small business Technology Transfer grant or contract

Introduction- Terminology SBIR/STTR grants are usually for STEEAM Small Businesses (SB) STEEAM stands for Science, Technology, Engineering, Education, Agriculture, and Mathematics – perfect for supporting inventions from Crane FY stands for Fiscal Year PI stands for Principal Investigator R/R&D stands for Research/Research & Development

Introduction to SBIR/STTR $2.8B+ in non-dilutive funding/year Exclusively set aside for SBs Administered by SBA Encourages domestic SBs to engage in high-risk R/R&D with strong commercialization potential Competitive awards-based program Enables SBs to explore technological potential Provides incentive to profit from commercialization Funding over 2 Phases, commercialization is Phase III Funding success is about 25% for first time applicants! Structured so SBs can respond themselves You can write this grant!

Goal of the SBIR/STTR Program Meet Federal R/R&D needs Increase private-sector commercialization of innovations derived from Federal R/R&D funding – like those inventions from Crane Stimulate technological innovation Foster and encourage participation in innovation and entrepreneurship by socially and economically disadvantaged persons

History of SBIR/STTR Program Created by Roland Tibbetts at the National Science Foundation and signed as a Federal program in 1982 SBIR programs have awarded over $40 billion to research-intensive American small businesses The 450,000+ engineers and scientists involved are one of the largest STEM talent concentrations in the world 11 Federal Agencies participate annually in program

The Current SBIR/STTR Programs Qualcomm Symantec iRobot Genzyme Nimble Systems NanoMech Lift Labs Adaptec Trellis Growing Systems PIttMoss Techshot Speak Modalities The Current SBIR/STTR Programs Small Business Innovation Research (SBIR) Set-aside program for SB to engage in R&D – with potential for commercialization 3.2 % of Federal agencies Extramural R&D budgets greater than $100M per year (FY 2016 ~ $2.0-2.5 Billion in summation of 11 participating agencies). Small Business Technology Transfer (STTR) Sister set-aside program to facilitate cooperative R&D between SB and U.S. research institutions – with potential for commercialization. 0.4% of the extramural research budget (>$250 million) for all agencies with a budget greater than $1B per year.

SBIR/STTR Differences SBIR applicants must perform 67% of the work, and can only subcontract 33%. No partnering required for SBIR. Principal Investigator/Project Lead must work at company >51% of time (most agencies). Intellectual Property (IP) is with the SB only. STTR differs from SBIR in several ways, including: SB must partner with a research institution and award them 30% of the work. The SB must perform at least 40% of the work; additional 30% can be further subcontracted. PI/Project Lead can work at company part time (most agencies). STTR requires the SB and its partnering institution to establish IP agreement detailing the allocation of intellectual property rights and rights to carry out follow-on research, development or commercialization activities.

Milestone-Driven Award Process Phase I - Feasibility Study or Prototype ~$150 thousand and 6 months Phase II - Full Development Effort ~$1 million and 24 months Phase III - Commercialization Effort Private and Non-SBIR Allocated financing

The11 SBIR Funding Agencies SBIR + STTR SBIR Only Department of Defense (DoD) Department of Agriculture (USDA) Department of Energy (DoE) Department of Commerce – National Institutes of Standards and Technology (NIST) Department of Health & Human Services (HHS) (NIH administers the SBIR/STTR Program for all of HHS) Department of Commerce – National Oceanic and Atmospheric Administration (NOAA) National Aeronautics & Space Administration (NASA) Department of Education (ED) National Science Foundation (NSF) Department of Homeland Security (DHS) Department of Transportation (DoT) Environmental Protection Agency (EPA)

SBIR/STTR Agency Funding FY2016 ~ $2.8 B in FY17 across all agencies 23 Sept 2015

SBIR/STTR Agency Budgets FY2016 Agencies with SBIR and STTR Programs Budget Department of Defense (DOD) $1.070B Department of Health and Human Services (HHS), including the National Institutes of Health (NIH) $797.0M Department of Energy (DOE), including Advanced Research Projects Agency – Energy (ARPA-E) $206.1M National Aeronautics and Space Administration (NASA) $180.1M National Science Foundation (NSF) $176.0M Agencies with SBIR Programs Budget U.S. Department of Agriculture (USDA) $20.3M Department of Homeland Security (DHS): Science and Technology Directorate (S&T) and Domestic Nuclear Detection Office (DNDO) $17.7 M Department of Commerce: National Oceanic and Atmospheric Administration (NOAA) and National Institute of Standards and Technology (NIST) $8.4M Department of Transportation (DOT) $7.9M Department of Education (ED) $7.5M Environmental Protection Agency (EPA) $4.2M 23 Sept 2015

Agencies Differ Solicitations can be topics which you respond to DoD, DOE, USDA, NASA, NIH, NOAA, and others Solicitations can be principal investigator led NIH, NSF, USDA, Dept. ED, others Solicitations have very different names and the end vehicle for giving you money may be a contract! Solicitations, Funding Opportunity Announcements (FOAs) (NIH), and more Money remains non-dilutive

Review of the Introduction SBIR/STTR enables SBs in STEEAM to explore new technologies by providing the incentive of profit from commercialization in non-dilutive funding! You can license (more on this upcoming!) inventions from federal funded R&D labs (federal labs, universities, other non-profit research institutions (i.e. Scripps))

Session Overview Introduction & America’s Seed Funds State of IN Support for SBIR/STTR Indiana SBIR/STTR Program Services Indiana Matching Funding for SBIR/STTR Awardees Review Q & A

Session Overview Introduction & America’s Seed Funds State of IN Support for SBIR/STTR Indiana SBIR/STTR Program Services Indiana Matching Funding for SBIR/STTR Awardees Review Q & A

Why State Support for SBIR/STTR? We want our SBs Competing at the highest level and for federal funding! Largest source of seed funding for STEEAM innovative start-ups in U.S SBIR/STTR Funding is $1-3M+ over 2-3 years, this spans 3 Phases. Can be incredibly important source of funding for IN start-ups! So Let’s Pursue it! We want to be a good home for Crane and other federally funded institutions (IU, Notre Dame, Purdue, USI)

Ideal Source of Funding Non-Dilutive vs. Debt Equity www.listonberries.com

Goals of the IN SBIR/STTR Program Increase # of SBIR/STTR Awards to IN SBs Bring more federal money into IN Help IN SBs find, pursue, and win SBIR/STTRs Enable IN SBs to startup without giving up equity Stimulate technological innovation in IN private sector Strengthen the role of Hoosier SB in meeting the national R&D needs Increase commercial application of Indiana Federally-supported research

Ideal Source of Funding Non-Dilutive vs. Debt Equity www.diabetesmine.com

Session Overview Introduction & America’s Seed Funds Goal of the Indiana SBIR/STTR Program Indiana SBIR/STTR Program Services Indiana Matching Funding for SBIR/STTR Awardees Review Q & A

Indiana SBIR/STTR Services The IN SBIR/STTR Program aids IN SBs* for FREE** in: Vetting project(s) for SBIR/STTR Team Formation Solicitation Research & Matching Registration Requirements Aid Meeting with Federal Program Managers and Technical Points of Contacts (TPOCs) Writing Assistance* Tech Transfer Post Award Support Other, Various * Must be based in IN, or have 50% of assets here **We are a Tax-Payer funded resource

SBIR/STTR Grants – The Look We provide samples upon request* Some Typical Phase I Grants: DOD - 20 Page R&D Strategy NIH – 6 Page Research Strategy NSF – 15 Page Project & Commercialization Description Others – vary between these Structured for a SB to be able to respond to! “We are looking for great ideas, not great grantsmanship” – Dr. Prakash Balan, Director SBIR NSF Programs, SBIR/STTR Summit and Showcase, Austin, TX, 12.2.15

The Look of an SBIR/STTR SB A formed company* For profit, US owned and operated, and under 500 people (51% or more US citizen or Legal Resident Alien owned) Average firm size is 9 Focus is on performing highly innovative R&D Funding not for purchasing equipment, commercializing technology previously developed, or one that is very low risk and only needs capital

SBIR/STTR Winning Applications Prepared for 2-3 months in advance Contact with the agency Technical Point of Contact (TPOC – DOD), Project Director (PD)/Manager (PM), etc. Have a formidable team – domain expertise, business expertise, program management Have vision and understand commercial applications These are not academic grants for basic R&D – they are grants to stimulate innovation and the economy – they expect and want the small business to be successful

A Great SBIR/STTR Proposal Addresses the Evaluation Criteria Clearly details how/why the approach address the Agency’s need Skills of PI and Team Appropriate for technology and commercialization path Potential to Commercialize Describes how the firm will move the technology through the Phases to commercialization of the technology Shows understanding of the needs of the Agency Uses SBIR.Gov, Agency offerings, SBIR Program, and other aids

Intellectual Property (IP) Small Business Concern Retains IP Important for some agencies that you have IP protection – patent, provisional or utility patent NIH is increasingly concerned with this!

Case Studies – Here! Aerodyn Combustion Anderson Custom Electronics Applied Logistics Services Candent Technologies Createability Indiana Integrated Circuits ITAMCO Stimulus Engineering Techshot Victor Technologies Wolf Technical Services XADS (Xtreme Alternative Defense Systems)

Session Overview Introduction & America’s Seed Funds Goal of the Indiana SBIR/STTR Program Indiana SBIR/STTR Program Services Indiana Matching Funding for SBIR/STTR Awardees Review Q & A

IN Matching SBIR/STTR Funding More non-dilutive funding Indiana Economic Development Corporation (IEDC) - Elevate Ventures administer Indiana companies awarded Phase I SBIR/STTR funding can access matching awards up to an additional 50 cents for every federal dollar, up to $50,000 per award from 21st Century Fund No strings attached, must use on project Additional co-investment opportunities for select Phase II recipients and those moving to commercialization (Phase III) may also be available.

Review SBIR/STTR funding for SB innovation is available Non-dilutive! IN offers SBIR/STTR Free Aid Matching Funding ($50 K/award*) is available for Phase I awardees MORE Non-dilutive Funding! *max of 3 matched awards/lifetime of company

Useful Links – How to Get Started! Open and Closed SBIR/STTR Topics: www.sbir.gov; Agency Websites – Google agency + SBIR (‘NIH SBIR’) Indiana SBIR/STTR Help: www.indianaptac.com/sbirsttr/ Patent Help www.Patentconnect.org Indiana SBIR/STTR Phase I Matching Funding: www.elevateventures.com; click on ‘Entrepreneurs’>’Investment/Funding’ and click ‘Apply’ under SBIR/STTR in the ‘Ideation Section.’ Find an Expert: Indiana Database for University Research Expertise (INDURE) - https://www.indure.org Purdue TAP - http://tap.purdue.edu Find a Mentor: www.launchindiana.com/mentor Find IP Available for Commercialization: www.flintbox.com (can search on Purdue and Crane as examples)

Homework; Next Steps I will get back to you within a week with matches See if there is a grant for you! Email me at lhoverman@iedc.in.gov Introduce yourself and technology in the email Attach an Executive Summary that covers: An overview of your company and the chosen team The technology/innovation you can provide/develop The market opportunity (ies), value proposition, and customers; The competition;  What you would accomplish in 6 months to 1 year, given $150-225K of funding from DoD, NIH, NSF, etc. I will get back to you within a week with matches

Questions and Answers* https://pbs.twimg.com/media/Bk_BDjRCEAANJh6.jpg

Thank You for Attending! Lisa R. Sproul Hoverman, PhD lhoverman@iedc.in.gov Email me with your company overview for a matched grant!