Robert-Allen BakerInnovation Policy and Program Analyst

October 23 , 2014

Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) are sister programs

From 15 USC 638 (e)(10) – the SBIR/STTR statute

◦ the term "commercialization" means--(A) the process of developing products, processes,

technologies, or services; and(B) the production and delivery (whether by the originating

party or by others) of products, processes, technologies, or services for sale to or use by the Federal Government or commercial markets

Federal Agency commercialization metrics:

◦ Transition results in sale or license of a technology product or process

◦ Commercialization revenues exceed SBIR/STTR investment

◦ Technology product or process advances mission of the Agency to benefit society

Inventor

Customer

Discovery

Proof-of

Concept

Product

Design

Product

Development

Manufacturing/

Delivery

Idea Pre-seed

Funding

Seed

Funding

Expansion/Mezzanine

Operating Cap.

Friends and Family

Angels

Seed Funds

Venture Funds

Founder

Institutional Equity

Loans / BondsAngel Groups

Start-up

Funding

SBIRPhase I Phase II Phase III

Sources: Center for Venture Research/ UNH; NVCA 2013 Yearbook; PwC MoneyTree

• $24.8 billion

• 70, 730 deals

• 23,460 seed (2012)

• 22,129 early stage

• 21,441 expansion

• > 268,000 individuals

Angel Investors (2014)

• $20.7 billion

• 2,099 deals

• 280 seed (2012)

• 1,647 early stage

• 1,796 later/expansion

• 522 active firms

Venture Capital (2014)

Angels Provide ~90% of Outside Equity for Startups

$0.00

$0.50

$1.00

$1.50

2010 2011 2012

Median Round Size Mean Round Size

6

*Angel rounds include angels & angel groups only

$980K$900K

$990K

$500K

$625K $600K

$M

Congressional passion for small business innovation dates to the passage of an SBIR statute in 1983, followed by STTR in 1992.

SBIR/STTR reauthorization in 2011 focused on the importance of commercializing technology, delivering innovation to customers.

At ~$2.3B, SBIR/STTR is the largest Federal program available to help small business inventors negotiate the innovation ecosystem-- >145,000 awards since 1985, averaging 10 patents/day.

For innovation investors, SBIR/STTR r\is non-diluted funding used to reduce risk, accelerate technology, and preserve your IP rights.

The Fall National SBIR/STTR Conference in Austin on Nov. 11 -13 is the entry way into SBIR/STTR for entrepreneurs.

PHASE I Feasibility Study

~$150K six-month award (SBIR)

~$150K up to 12-months (STTR)

• PHASE II

Full research to prototype

$1M+ via two-year award

• PHASE III - Goal of Program

Commercialization stage

Funded with non-SBIR/STTR $

Can be funded by the Agency or Private Sector or both

8

9

NASA Phase II supplements:

12

% of Phase I Awardees

0%

5%

10%

15%

20%

25%

30%

35%

2009 2010 2011 2012

First time DOE

winners

First-time DOE

applicants

Free, continuous support by skilled entrepreneurial support providers accompanies most SBIR/STTR awards:

◦ Phase I assistance Commercialization readiness assessment Focused assistance with development of Phase II commercialization plans

◦ Phase II assistance Flexible offerings to meet a variety of commercialization needs in DoD

Agencies and Civilian Agencies alike Market research on customers Investor introductions

Company-selected commercialization assistance vendor

◦ Reauthorization permits companies to select their own vendors to provide $5K/year commercialization assistance in Phases I and II.

◦ Company must include this vendor as a subcontractor or consultant in their Phase I or II application

What requirements does a RIF project satisfy?

Satisfy an operational or national security need:◦ Accelerate or enhance military capability

◦ In support of major defense acquisition program

Reduce:◦ Technical risk

◦ Cost: Development, acquisition, sustainment, or lifecycle

Completed within 24 months of award

Cost is not more than $3 million

Selection Preference to Small Business Proposals

As an inventor, your priority must be to identify customers for a technology adapted by you to meet their needs and requirements.

As an SBIR/STTR awardee, your priorities must be to:

◦ … help fulfill the mission of your funding Agency.

◦ … leverage non-SBIR/STTR resources to mature your technology and productize it for potential customers you’ve identified.

As a small business principal, your priority must be to fairly appraise your strengths and weaknesses, and build a team that allows you to aggressively market your invention.

And yes, we ARE here to help ……

The “SBIR Gateway” at www.zyn.com provides direct links to every Federal Agency SBIR/STTR program, other commercialization resources, and SBIR/STTR news.

http://www.youtube.com/user/NSFInnovationIIP offers useful webinars such as How to Successfully Apply to the NSF SBIR/STTR Program.

http://www.navysbir.com/how2videos.htm offers “SBIR University” tutorials on numerous subjects for beginners and experienced entrepreneurs alike – including summaries of all Federal Agency SBIR and STTR programs.

http://www.sbtc.org is a policy portal on commercialization issues, offering illuminating white papers and other documents.

Questions?