1. An Overview of the Federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs $2.5 Billion Research Fund for Small Businesses Pat Dillon, MBA Wisconsin Entrepreneurs’ Network Northwest Regional Director March 9, 2011

2. Overview The SBIR and STTR Programs are critical set-aside research and development funding programs for small businesses by awarding federal grants and contracts for innovative high risk, high payoff research and development efforts that have strong commercial potential. Since the enactment of SBIR in 1982, and STTR in 1992, these Programs have helped thousands of small businesses to research, develop and commercialize technologies in defense, agriculture, environment, life sciences, energy, education to include “green” technology development efforts. SBIR represents a source of high risk capital for small companies to explore their technological potential and provide the incentive to profit from its commercialization. STTR requires small companies and the nation's premier nonprofit research institutions to foster innovation collaboratively to meet the nation's scientific technological challenges in the 21st century.

3. Purpose ─ Stimulate technological innovation ─ Use small businesses to meet federal research and development (R&D) interests/needs ─ Encourage the participation of disadvantaged and minority persons in technological innovation ─ Increase private sector commercialization through federal R&D investment ─ Promote and require, for STTR, that small businesses partner with a nonprofit research institution such as a university or a federally funded R&D center to bring innovative technologies to market; for SBIR, the small business may choose to establish research collaboration with academic organizations or private sector firms.

4. Benefits – Provide non-dilutive funding for innovative, high risk, high payoff research and development efforts – Retain intellectual property rights of the federally funded R&D effort – Retain 100 percent ownership of the small business – Achieve technological and commercialization credibility for proprietary innovations “Supports the American Dream, one small business at a time!”

5. Small Business Eligibility ─ Organized for profit, with a place of business located in the United States, which operates primarily within the United States or which makes a significant contribution to the United States economy through payment of taxes or use of American products, materials, or labor; ─ Formed as an individual proprietorship, partnership, limited liability company, corporation, joint venture, association, trust or cooperative, except that where the form is a joint venture, there can be no more than 49 percent participation by business entities in the joint venture; and ─ At least 51% owned and controlled be one or more individuals who are citizens of, or permanent resident aliens in the United States, except in the case of a joint venture, where each entity to the venture must be 51% owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in the United States and has, including affiliates, not more than 500 employees.

6. Agencies and Funding 11 federal agencies $2.5 Billion Annually (2.8% of the extramural R&D budget) Federal Grants and Contracts

7. Participating Federal Agencies Department of Agriculture Department of Commerce Department of Defense * Department of Education Department of Energy * Department of Health and Human Services * Department of Homeland Security* Department of Transportation Environmental Protection Agency National Aeronautics and Space Administration * National Science Foundation * Note: * Participate in the STTR Program Why? SBIR Threshold - $100M in extramural R&D funding STTR Threshold - $1B in extramural R&D funding Differences Among the Agencies Different missions and goals People and Positions Funding Amounts Solicitations releases and deadlines Proposal preparation instructions Broad and specific research interests/topics Review evaluation and selection criteria Business practices and processes Electronic submission processes and systems

8. SBIR/STTR Flow Innovative Idea/Concept/Project Phase I Technical Feasibility $100K-$150K or more Phase II Prototype $500K-$1M or more Phase II Follow-On Funding (Depends on Agency) and Phase III Commercialization Three Phase Program Long Term Research, Development and Commercialization Process

9. Critical Program Differences Phase I – up to $150K Feasibility – 6-9 months 66% - small business 33%- subcontracts /consultants PI must be employed by the small business at least 51% Phase II – up to $1M Prototype – up to 2 years 50% - small business 50% - subcontract/consultants PI must be employed by the small business at least 51% Phase II Follow-on funding Phase III Commercialization Use of non-SBIR Funds (Congressional Plus-Ups) Sole-Source contracts Phase I – up to $100K Feasibility – 12 months 40% - small business 30% - research institution 30%- subcontractors PI (Either the small business or the research institution) Phase II – up to $750K Prototype – up to 2 years 40% - small business ; 30% - research institution; 30% - subcontract PI (Either SB or RI) Phase II Follow-on funding Phase III Commercialization Use of non-SBIR Funds Sole-Source contracts SBIRSTTR

10. Agency Differences Contracting Agencies Ü Agency establishes plans, protocols, requirements Ü Highly focused topics Ü Procurement mechanism for DOD and NASA Ü More fiscal requirements Granting Agencies Ü Principal Investigator initiates approach and research project Ü Less-specified topics Ü Assistance mechanism Ü More flexibility DODHHS/NIH NASAED EPADOT DOC HHS/NIH NSF ED USDA DOE

11. The 3-T’s Topic Technology Technical Team A winning proposal takes a lot of time and effort, so let’s first evaluate….. - Do I have a winning idea? - Can I put together a winning proposal?

12. Key Definitions Basic Research - Scientific study and experimentation to provide fundamental knowledge required for the solution of problems. Exploratory Development - A study, investigation or minor development effort directed toward specific problem areas with a view toward developing and evaluating the feasibility and practicability of proposed solutions. Advanced Development - Proof of design efforts directed toward projects that have moved into the development of hardware for test. Engineering Development - Full-scale engineering development projects for DoD use but which have not yet received approval for production. Commercialization Definition The process of developing marketable products or services and delivering products or services for sale (whether by the originating party or by others) to Government or commercial markets.

13. Profile of a SBIR/STTR Small Business Must have an innovative technology Apply an existing technology in a novel way Must be able to perform the required percentage of effort in their facilities Must have a technology fit with SBIR/STTR topic Possess strong commercial potential The principal investigator and key individuals participating in the proposed effort must have credentials that support their ability to perform the work outlined in the proposal. One or more of the following would strengthen the proposal: Having experience as a PI on research proposals in the chosen topic field Project management experience in the chosen topic field Research and development experience in the chosen topic field A track record in commercializing technological innovations in the chosen topic field Holding an advanced degree in the chosen topic field Experience in the topic field of effort Publications in the topic field of effort If the PI lacks strong qualifications, the business can hire consultants who have the credentials that strengthen the proposal application.

14. Go/No Go Criteria – the 3 T’s Topic – does your innovation/technology respond closely to the specific agency need?  Compelling Idea + Agency Fit = Impact (fit involves both a relevant agency topic and the appropriate TRL) Technology/Technical Approach – does your project idea clearly define the SOA, the technology need/gap/shortfalls of SOA, how your idea overcomes these and rationale why you think it will work, and a clear statement of how these needs gaps will be studied, including the criteria to judge success – Chart the path All the way to commercial impact Technical Team – does the team have all the required skills and experience to thoroughly complete the plan and definitively achieve and judge the success? Who is the principal investigator? Who are potential customers and commercialization partners whom we can involve now?

15. Searching for topics/agencies Know your capabilities and research interests, stay focused, do not chase opportunities that do not align with your business or market opportunities Understand the competitive landscape, intellectual property position and research environment Search the SBIR/STTR Gateway to find relevant agencies and topics: www.zyn.com www.zyn.com Use key search terms (government lexicon) to match your research interests with the agency topics/funding opportunities Review past SBIR/STTR awards by agency (target your customer) Get to know the customer - establish and build laboratory research relationships Develop a PLAN – be smart, savvy and strategic! This is not a destination, it is a journey!

16. Current SBIR/STTR Research Topics The Environmental Protection Agency current SBIR broad technology topics are: A) Green Building; B) Innovation in Manufacturing; C) Nanotechnology; D) Greenhouse Gases; E) Drinking Water Monitoring Treatment; F) Wastewater and Sustainable Infrastructure; G) Air Pollution Monitoring and Control; H) Biofuels; I) Waste Monitoring and Management; and J) Homeland Security. DOD, DOE, NSF, NASA, USDA and DOC are interested in green technology innovations and advancements.

17. Eligible Principal Investigators (PI) An individual with the skills, knowledge and resources necessary to provide scientific and financial management of the proposed research effort. SBIR - the PI must have his/her primary employment (more than 50%) with the small business at the time of award and for the duration of the project. STTR - the PI may be employed with the small business or the participating non-profit research institution as long as he/she has a formal appointment with or commitment to the applicant small business, which is characterized by an official relationship between the small business concern and that individual.

18. Search for Funded SBIR/STTR Projects TECH-Net is an electronic gateway of technology information and resources for and about small high tech businesses. It is a search engine for researchers, scientists, state, federal and local government officials, a marketing tool for small firms and a potential "link" to investment opportunities for investors and other sources of capital. TECH-Net is an Internet-based database of information containing Small Business Innovation Research (SBIR) awards, Small Business Technology Transfer (STTR) awards. It is a free service for those seeking small business partners, small business contractors and subcontractors, leading edge technology research, research partners (small businesses, universities, federal labs and non-profit organizations), manufacturing centers and investment opportunities.SBIRSTTR Businesses profiled on the TECH-Net system can be searched by a variety of data elements such as: location; company name, phase, agency, branch, award year, etc. To search TECH-Net visit: http://tech-net.sba.gov/tech-net/public/dsp_search.cfmhttp://tech-net.sba.gov/tech-net/public/dsp_search.cfm

19. SBIR/STTR Information/Links Main SBIR/STTR Website: www.sbir.govwww.sbir.gov Links to the federal agencies: www.sbir.govwww.sbir.gov Search for SBIR/STTR solicitations: www.sbir.govwww.sbir.gov Search for SBIR/STTR research topics: www.zyn.comwww.zyn.com Search for funded SBIR/STTR Phase I and II Projects: http://tech-net.sba.gov/tech-net/public/dsp_search.cfm

20. WEN Technology Team WEN’s Technology Team focus on impacting the startup and growth of technology businesses by leveraging a wide variety of programs, services, tools and resources to help them start, grow and expand. The WEN Technology Team provides: Expertise, coaching, and guidance with respect to technology assessment and commercialization, business planning, raising capital, and securing State and Federal grants including Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs, as well as other federal research and development opportunities. Strategic connections to resources, information, human and financial capital, advisers, and potential strategic partners. Technology transfer assistance between the Wisconsin Alumni Research Foundation (WARF) and its subsidiary, WiSys Technology Foundation, and other technology transfers offices.

21. WEN SBIR/STTR Services WEN and its numerous Wisconsin partners from government, academia, and the private sector involved in promoting entrepreneurship, innovation and economic development aim to assist and strengthen Wisconsin’s pursuit of federal SBIR and STTR awards by its tech-based small business sector. WEN and its collaborating partners provide SBIR/STTR assistance that includes:  Up-to-date information  Education and Training  Expert advice and coaching  Electronic registrations  proposal preparation and submission  pre-submission proposal reviews  establishment of research partnerships with academia/non-profit research institutions and technology transfer opportunities for the commercialization of innovations  selection of appropriate federal agencies and research topics of interests/needs that fit with the small business strategy  development of commercialization strategies and Phase II Commercialization Plans  intellectual property management in federal grants and contracts  Other

22. Get Help With Your Research Proposal Technology Assistance Grant – a small grant of up to $3,000; of which 25 percent is matched by the small business to hire an approved private sector service provider (consultant) to help prepare a federal SBIR/STTR research proposal. This is a one-time grant application. Go to www.wenportal.org for more information.www.wenportal.org

23. Getting Started Have you performed a self assessment? Are you a good candidate for federal funding? Do you have the internal or external resources to support a research and development effort? Are you willing to collaborate with others? Call us to start the journey?

24. Advance Power and Energy Cluster Mission: The Advanced Power & Energy Cluster (ADT Cluster) will be a catalyst to provide innovative technology for the nation’s warfighters while accelerating regional economic development. Goals: The Defense Alliance (Contractor) ADT Cluster is focused on Department of Defense (DoD) Advanced Power & Energy needs to support our military men and women. Collaboration: The ADT Cluster will collaboratively leverage the industry academic, nonprofit, governmental and other assets of the region to bring innovative solutions more rapidly to the nation’s defense needs, while contributing to the technology-based economic development – particularly for high technology jobs – of the region. Government Opportunities: Connecting private sector businesses with Department of Defense procurement opportunities. For more information, visit: www.powerfordefense.comwww.powerfordefense.com

25. Benefits of the Cluster The Department of Defense (DoD) actively seeks innovative technology and service answers to challenging issues for its current and future power and energy needs. Members accepted to the ADT Cluster have access to R&D and direct contract solicitations, DoD agency and prime defense contractor points of contact, as well as updates with regard to DoD power and energy needs.

26. National SBIR/STTR Conference April 10-13, 2011, Madison, WI Monona Terrace and Community Center Early Bird Registration - $395 until March 10 th After March 10 th – registration is $495 Great opportunity to meet with federal agency representatives, learn more about SBIR/STTR, hear from the experts, etc. Visit www.wisconsinsbir.org for more details!www.wisconsinsbir.org

27. Contact Information Ms. Pat Dillon, MBA UW-Extension, Division of Entrepreneurship and Economic Development WEN Regional Director 715-836-5056 dillonp@uwec.edu www.wenportal.org