Doing Business with Small Business Sue Paulson

 In 2006, Minnesota companies received $321.5 million in venture capital investments, an increase of more than 40 percent from the previous year, ranking14th nationwide and second in the Midwest  Minnesota received $62 in venture capital investment per capita, highest in the Midwest and 13th nationwide  Minnesota’s Small Business Administration ranked 14th nationally, with $466 million in approved loans in 2006 

 Create partnership between University – Small Businesses  Benefit both organizations ◦ Academic ◦ Economic ◦ Building relationships for future ◦ Impacting local and global issues

 Federal Agencies encourage partnerships ◦ SBIR – Small Business Innovation Research  DHHS, USDA, DOC, DOD, USDA, DOC, DOD, DoED, DOE, DHS, DOT, EPA, NASA and NSF  $12 Billion has been awarded under this program ◦ STTR – Small Business Technology Transfer programs  DHHS, DOD, DOE, NASA and NSF  $68 million has been awarded under this program

 Business & Industry FY2008 Accounts Receivable figures ◦ 5.3 million in outstanding receivables ◦ 25% of overall receivables ◦ 40% of receivables over 120 days old  B&I generally considered least collectable of all fund classes  Small businesses often view the relationship as a business transaction

 Small businesses always watch the bottom line  May have limited resources, both monetarily and human ◦ Sometimes have to make hard choices – payroll or bills? ◦ Award contact, programmatic contact, financial contact – same person  Struggle with the U of M structure  Principal Investigator  Academic Department  SPA  SFR

 Department Head, PI and academic department need to understand the risks and the benefits – not always easy money  Quality & quantity issues need to be escalated quickly – involve SFR immediately  Any discussions related to scope change, budget changes, or personnel – involve SPA  Watch spending and receivables ◦ SFR works BI more often than other sponsors

 EFS Aging ◦ List projects by RRC or DeptID  UM Aging by RRC DeptID Tree Report  UM Aging by DeptID & Contract  New to the University Sponsors – credit check ◦ Establish credit worthiness ◦ Negotiate financial terms & conditions based on credit ◦ FY 2010 implementation  Negotiate new awards based on receivables ◦ Lower risk to the University ◦ FY 2010 implementation

 Communication is the key  Treat the awards differently than other awards ◦ Partner with sponsor  Help sponsor understand the U of M structure  Be responsive ◦ Watch receivables closer, monitor spending ◦ Submit deliverables on time  Obtain any changes to deliverables or due dates in writing

 Fund class where the U of M has the most room to grow ◦ We aren’t always competing with other Universities for the same funding  New and start up businesses can “spin” off from other research projects  Many successful experiences with small business!!

 Contact Information ◦ Sue Paulson