Small Business Innovation Research/Small Business Technology Transfer (SBIR/STTR) at the National Science Foundation Ian Bennett, Ph.D. Program Director Division of Industrial Innovation and Partnerships

2 Division of Industrial Innovation & Partnerships (IIP) – Program Organization

3 Industrial Innovation & Partnerships (IIP) Program areas include SBIR/STTR, I/UCRC, GOALI and PFI  Vision To be the pre-eminent federal resource to create high technology through small businesses to stimulate our nation’s innovation leadership and contribute to the U.S. economy and society.  Mission To accelerate industrial innovation in the U.S. by leveraging fundamental scientific and engineering research through small businesses in alignment with the statutory purpose of the Small Business Innovation Research Program and the NSF Vision.

4  DODDefense  HHSHealth  NASASpace  DOEEnergy  NSF~$100 Million  DHSHomeLand Security  USDAAgriculture  DOCCommerce  EPAEnvironment  DOTTransportation  DoEDEducation SBIR/STTR Participating Agencies TOTAL ~ $2.2B Est. FY 2006

5 DARPA D E F E N S E A D V A N C E D R E S E A R C H P R O J EC T S A G E N C Y 228M Army 220M Navy 288M Air Force 130M MDA 64M DARPA 4.9M DTRA 13.5M SOCOM 39M OSD 11M CBD.7M NGA DoD SBIR FY05 Budget

6 Federal Investment PHASE I Feasibility Research PHASE III Product Development to Commercial Market PHASE II Research toward Prototype Phase IB; 2:1 matching of private investment, up to $50K Phase IIB; 2:1 matching of private investment, up to $500K No Federal $ Match Maker Program Unique to NSF Private Sector Investment Other Supplements $100K – 6 Months $150K – 12 Months $500K – 24 Months Taxes NSF SBIR/STTR ‘Innovation’ Model Unique to NSF

7 SBIR/STTR Awards – Details SBIR/STTR Research Award Types Details SBIR Phase I6-month $100K STTR Phase I12-month $150K SBIR/STTR Phase II24-month $500K SBIR/STTR Phase IIB$500K during Phase II award Phase II Supplements – REU, RET, RAHSS, Phase IICC REU - $3K/undergrad/per summer RET - $10K/teacher/per summer RAHSS - $3K/student/per summer Phase IICC - $40K Phase IIR (with EEC-ERC Program) 12-month $200K to ERC in collaboration with SBIR/STTR Phase II Grantee SBIR-I/UCRC (with I/UCRC Program) $5K I/UCRC membership fee to Phase II Grantee

8 SBIR/STTR Program Focus Proposed research must demonstrate:  High-Payback Innovation  High Risk  High Commercial Potential  Strategic Partnerships - e.g. - Research Collaborators, Customers and Equity Investors  Collaboration with other NSF Programs e.g. ERC, I/UCRC

9  69% of awards go to companies with 20 people or less  41% of awards go to companies with 10 people or less Phase I Statistics

10 NSF SBIR/STTR Unique Features  NSF: Not an “Operations-Based” agency Will NOT Purchase any Prototypes  Implications Broad topic solicitations NSF SBIR/STTR success metrics  Other NSF Nuances All proposals are externally-reviewed Reviewers: Academic, Private Equity, Industrial Technology and Commercial reviewers

11  NSF is not the final customer  NSF is not buying a product/process/software or intellectual property commercialize  NSF wants to see the grantee successfully commercialize the innovation  Company needs investment dollars beyond NSF SBIR/STTR Doing Business with NSF

12 NSF Merit Review Process  NSF Merit Review  Typically reviewed by panel meetings  Panelists come from Academia/Industry/Investment/Government Labs  Phase I – all proposals receive a minimum of 3 expert technical reviews & increasingly commercial  Phase II – all proposals receive in-depth extensive reviews  A minimum of 3 expert technical reviews  A minimum of 3 expert commercial reviews

13  Intellectual Merit  Does the proposal reflect state-of-the-art in the major research activities proposed?  Is the proposed plan a sound approach for establishing technical and commercial feasibility?  How well qualified is the team (the PI, other key staff, consultants, and subawardees)?  Is there sufficient access to resources (materials, supplies, analytical services, equipment, facilities, etc.)? NSF Merit Review Criteria

14  Broader Impact  What may be the commercial and societal benefits of the proposed activity?  Does the proposal lead to enabling technologies (instrumentation, software, etc.) for further discoveries?  Does the outcome of the proposed activity lead to a marketable product or process?  Evaluate the competitive advantage of this technology vs. alternate technologies that can meet the same market needs.  How well is the proposed activity positioned to attract funding from non-SBIR sources once the SBIR project ends? NSF Merit Review Criteria

15 Company Commercialization History – Very Important Part of the Review!  Revenue from SBIR/STTR Funding  Previous SBIR/STTR Phase II Awards  Follow-on-Funding from Government and Private Sector  Total Sales Revenues from Commercialization of Phase II Projects What’s the Government’s Return on Investment?

16 Doing Business with NSF (part 2)  Ideas do NOT equal business opportunities  Do your HOMEWORK, describe the opportunity  Remember the time component to value of money  Get some market validation BEFORE you come to NSF SBIR/STTR  Consider proposal as ADVOCATE at the table  Proposal as “selling” document

17 Most Proposals Fail Because …  Lack of identified business opportunity (science projects)  Lack of clarity  Poor work plan  Other issues  IP ownership and landscape  No clear technology advantage  Competitive landscape  Path/Time to market  Didn’t read the directions

18 NSF SBIR/STTR Takeaway  Many SBIR/STTR programs out there!  At NSF ~$100M/year granted primarily for seed-stage development: AM, BT, EL, EO, IT  Program to mitigate technical risk and bridge the “Valley of Death”  Investment in Country’s Innovation Capacity  Read the Directions (Solicitation)!

19 Next Topics (All topics)  Advanced Materials  Biotechnology  Electronics  Information Technology  Emerging Opportunities  Closes ~ December 04, 2007

20 Emerging Opportunities (EO)  Increasing Emphasis on Commercial Potential  3 Year window for time to market  3-5 Pages of Commercial Potential  Technology  Team  Market  Letter(s) of Support  Communication with Program Manager

21 Useful Links: Ian Bennett: