Webinar Presentation Texas SBIR/STTR Summit and Conference The National Science Foundation’s Small Business Programs Ruth Shuman, Ph.D. Program Director Industrial Innovation and Partnerships National Science Foundation June 12, 2013

The SBIR and STTR Programs Small Business Innovation Development Act of 1982 Small Business Innovation Research (SBIR): Requirement to set aside 2.5% (now, 2.7%) for all agencies with > $100M of external R&D funding Small Business Technology Transfer (STTR): Requirement to set aside 0.3% (now, 0.4%) for all agencies with > $1B of external R&D funding Industrial Innovation & Partnerships – Small Business Partnerships 2

The SBIR/STTR Program Goals Intended to stimulate technological innovation in the private sector Primary goals: – Strengthen the role of small business in meeting Federal research and development needs – Increase the commercial application of federally- supported research results – Encourage participation by socially and economically disadvantaged, and women-owned, small businesses Industrial Innovation & Partnerships – Small Business Partnerships 3

4 SBIR/STTR Program Fundamentals Provides early-stage funding for R&D on high-risk technologies with high potential for economic/societal benefits Targets early-stage development of technology on a commercial path Seeks to fund transformational, game-changing technology Looks for significant market opportunity Awards based on both technical and commercial merit Values academic collaboration/translation Strong focus on commercialization Encourages ties to private sector

NSF Program Focus Y OU IDENTIFY THE PROBLEM / OPPORTUNITY, PROPOSE THE TECHNOLOGICAL SOLUTION, AND DEVISE YOUR BUSINESS STRATEGY Broad, market-driven technology topics: Y OU IDENTIFY THE PROBLEM / OPPORTUNITY, PROPOSE THE TECHNOLOGICAL SOLUTION, AND DEVISE YOUR BUSINESS STRATEGY NSF is an investor, not the “final customer” (NSF is not buying your technology/product/service) commercialize NSF wants to see you commercialize your research successfully NSF provides incentives to encourage you to find additional investment Industrial Innovation & Partnerships – Small Business Partnerships 5

Investors Industry NSF Research Funding GOALI STTR PFI : BIC / AIR ERC I/UCRC SBIR STC DiscoveryDevelopmentCommercialization Foundations Valley of Death I-Corps University Small Business Innovation Cycle 6 Original Chart by Angus Kingon

Reasons to Seek SBIR/STTR Funding Provides “pre-seed” funding to demonstrate proof-of-concept Non-dilutive investment; not a loan/equity-free Provides validation, recognition, visibility May be leveraged to attract investment/partnerships Allows small business to retain IP Values/encourages/facilitates partnerships, which enable success Industrial Innovation & Partnerships – Small Business Partnerships 7

SBIR Award Information Type of Award – 6 month, fixed-price grant Award Amount: – Phase I not to exceed $150,000 – Phase II not to exceed $750,000 Estimated Number of Awards – 200 Awards (pending availability of funds) – No obligation to make a specific number of awards Anticipated Phase I Funding Amount - $30,000,000 (pending availability of funds) Industrial Innovation & Partnerships8

STTR Award Information Type of Award – 12 month, fixed-price grant Award Amount: – Phase I not to exceed $225,000 – Phase II not to exceed $750,000 Estimated Number of Awards – 50 Awards (pending availability of funds) – No obligation to make a specific number of awards Anticipated Phase I Funding Amount - $11,250,000 (pending availability of funds) Industrial Innovation & Partnerships9

Eligibility Information Organization Requirements: – Proposals only may be submitted by companies that qualify as a small business For profit business Fewer than 500 employees Located in the US 51% owned and controlled by US individuals – No more than 2 proposals total per company during the SBIR/STTR cycle ending June 13, 2013 Industrial Innovation & Partnerships – Small Business Partnerships 10

Eligibility Information Principal Investigator (PI) Limit: – Primary employment of the PI must be with the small business at the time the award is made Defined as 51% (of a 40 hour work week) or greater – The PI must commit at least 1 calendar month to the SBIR Phase I project; 2 calendar months to the STTR Phase I project – No more than 1 proposal per PI or Co-PI Industrial Innovation & Partnerships – Small Business Partnerships 11

SBIR Consultant/Subaward Information Small Business must perform at least 2/3 of the research, as determined by the budget Consultants and/or subawardees may perform up to 1/3 of the research, as determined by the budget Industrial Innovation & Partnerships – Small Business Partnerships 12

STTR Consultant/Subaward Information Collaboration with a research institution is required A minimum of 40% of the research must be performed by the company, as measured by the budget A minimum of 30% of the research must be performed by the collaborating research institution, as measured by the budget Industrial Innovation & Partnerships13

Other Important Requirements The submission of the same project to both the SBIR and STTR programs is strongly discouraged. For STTR proposals, it is highly desirable that the core innovation be linked to fundamental research previously funded by NSF. Industrial Innovation & Partnerships – Small Business Partnerships 14

Prior to Submission Communicate with the Program Director – Preferred method – – Send 1-2 page summary that discusses: Company/team (including experience with previous SBIR awards) Market Opportunity Technology/innovation Competition Collaborators Industrial Innovation & Partnerships – Small Business Partnerships 15

Proposal Guidelines Phase I – Feasibility and proof-of-concept research focus – Must receive a Phase I award to be eligible to submit a Phase II proposal Phase II – Prototype development and testing research focus NSF funding may be used for R&D only! Industrial Innovation & Partnerships – Small Business Partnerships 16

Funding Criteria We fund high-risk, high-payback innovations – With strong potential for commercialization – That demonstrate strategic partnerships with research collaborators, customers, industry partners, and equity investors We do NOT fund – Basic research – Evolutionary optimization of existing products and processes or modifications to broaden the scope of an existing product, process or application – Analytical or “market” studies of technologies Industrial Innovation & Partnerships – Small Business Partnerships 17

Merit Review Criteria Intellectual Merit - Quality of the Research – A sound approach for establishing technical and commercial feasibility – Qualified technical team – Sufficient access to resources – Significantly advances “state-of-the-art” Broader Impact – Potential impact on society – Commercial and societal benefits – Marketable product – Commercialization track record – Business expertise – Competitive advantage Industrial Innovation & Partnerships – Small Business Partnerships 18

Commercial Potential Scope and Nature of the Business Opportunity: – The addressable target market opportunity Is this an enabling technology – The company/team Business and commercialization experience – The product features and benefits compared to the competition – Intellectual Property (IP) position – Financing and revenue model Positioned to attract additional investment Industrial Innovation & Partnerships – Small Business Partnerships 19

SBIR Topics Four broad topic areas: Biological and Chemical Technologies (BC) Education Applications (EA) Electronics, Information and Communication Technologies (EI) Nanotechnology, Advanced Materials, Manufacturing (NM) Industrial Innovation & Partnerships – Small Business Partnerships 20

STTR Topic Fall topic(s) to be announced Industrial Innovation & Partnerships – Small Business Partnerships 21

BC Subtopic Description Biological and Chemical Technologies (BC): – Biological Technologies – Biomedical Technologies – Environmental Technologies – Chemical Technologies Industrial Innovation & Partnerships – Small Business Partnerships 22

EA Subtopic Description Education Applications (EA): – Pre-College Education – College and Post-College Education – STEM Educational Gaming – Entrepreneurial Education – Tools for Learning and Assessment Industrial Innovation & Partnerships – Small Business Partnerships 23

EI Subtopic Description Electronics, Information and Communication Technologies (EI): – Services: Security & privacy; search & mining; digital arts; financial – Applications: Mobile; collective intelligence; design/test; virtualization – Systems: HCI; robotics; wireless; instruments; energy management – Components: MEMS; sensors; optoelectronics; RF; packaging – Devices: Optoelectronics; IC design; other novel devices Industrial Innovation & Partnerships – Small Business Partnerships 24

NM Subtopic Description Nanotechnology, Advanced Materials, and Manufacturing (NM): – Nanomaterials, Nanomanufacturing, Nanodevices, and Nanoinstrumentation – Electronic, Optical, and Magnetic Materials – Materials for Energy Generation and Storage – Structural Materials, Coatings, and High-Temperature Materials – Sustainable Materials and Smart Materials – Manufacturing Equipment and Processes Industrial Innovation & Partnerships – Small Business Partnerships 25

Logistics SBIR solicitation released twice per year (Sept. and March) STTR solicitation once or twice per year Proposal deadlines are ~ 3 months after solicitation release All proposals are externally-reviewed by domain experts Reviewers: Academics, investors, industry, entrepreneurs Decision made 4-5 months after proposal receipt Cash in the bank 7 months after proposal receipt Post-award, immersion in the NSF’s assistance programs Industrial Innovation & Partnerships – Small Business Partnerships 26

Guide to Proposal Submission Please use the step-by-step user guide for entering a SBIR or STTR Phase I proposal in NSF’s FastLane system. Guide_Phase_I_updated_October_2011.pdf Guide_Phase_I_updated_October_2011.pdf You must register your company and PI in FastLane prior to submitting your proposal, a process that could take 3-5 days; You are required to provide a Dun and Bradstreet Data Universal Numbering System (DUNS) number; You also are required to register with the System for Award Management database, SAM ( And, you are required to register in the SBA Company Registry. Industrial Innovation & Partnerships – Small Business Partnerships 27

Awardee Demographics Company data from FY 2012 Phase I awardees: – 86% of Phase I awardees have 10 or fewer employees – 90% of Phase I awardee companies were incorporated since 2007 – 73% of Phase I awardees have never received a Phase II award from any agency University ties and lineage of Phase II projects (National Academies Study, 2007): ‒ 37% involve faculty members ‒ 27% involve graduate students ‒ 25% rent/use university facilities ‒ 17% issue a subcontract to a university Industrial Innovation & Partnerships – Small Business Partnerships 28

Program Statistics – Past 3 Years Phase I: On average, 2,112 proposals received with 338 awards made (16% funding rate) Phase II: On average, 303 proposals received with 118 awards made (39% funding rate) Leverage: For FY2012, the Phase IIB awards (48) were based on $94 million in third-party investment (the vast majority private funds) acquisitions of Phase II grantees each year Industrial Innovation & Partnerships – Small Business Partnerships 29

Industrial Innovation & Partnerships – Small Business Partnerships 30 Thank You! National Science Foundation Questions?