National Science FoundationNational Science Foundation

Industrial Innovation FundingIndustrial Innovation Funding

F. C. Thomas AllnuttF. C. Thomas Allnutt

Division of Industrial Partnerships & InnovationDivision of Industrial Partnerships & Innovation

Vermont June 2008 - overview

The NSF MissionThe NSF MissionTo promote the progress of

science and engineeringTo advance the national

health, prosperity, and welfareTo secure the national defense

NSF is…NSF is…National Science

BoardDirector

IG Office

Staff Offices

Directorate forEngineering

Directorate forGeosciences

Directorate forComputer and

InformationScience andEngineering

Directorate forMathematicaland Physical

Sciences

Directorate forSocial,

Behavioral,and Economic

Sciences

Office of Polar Programs

Integrative Activities(MRI, STC)

Directorate forEducation and

Human Resources

Directorate forBiologicalSciences

IndustrialInnovation andPartnerships

(IIP)

Division of Industrial Innovation Division of Industrial Innovation and Partnerships (IIP)and Partnerships (IIP)

Link basic research to the marketplace

Cross-cutting programs– SBIR– STTR– I/UCRC (Industry University Cooperative

Research Centers)– PFI (Partnerships for Innovation)

SBIR & STTR ProgramsSBIR & STTR Programs

2.5% of NSF budget SBIR2.5% of NSF budget SBIR 0.3 % of NSF budget STTR0.3 % of NSF budget STTR Goal is to move science from the Goal is to move science from the

bench to the marketplacebench to the marketplace

Bridging the “Valley of Death”Bridging the “Valley of Death”

Research and Education-Univ.-R&D Labs

PrototypesSmall Business Tech Development

BusinessDevelopment

Seed Funding

BusinessStartups; Expansions

NSF SBIR

DODDOD DefenseDefense HHSHHS HealthHealth NASANASA SpaceSpace DOEDOE EnergyEnergy NSFNSF ~$110 Million~$110 Million DHSDHS Homeland SecurityHomeland Security USDAUSDA AgricultureAgriculture DOCDOC CommerceCommerce EPAEPA EnvironmentEnvironment DOTDOT TransportationTransportation DoEDDoED EducationEducation

Participating AgenciesParticipating Agencies

TOTAL ~ $2.3BTOTAL ~ $2.3B Est. FY 2008Est. FY 2008

NSF SBIR/STTR Innovation ModelNSF SBIR/STTR Innovation Model

PHASE IIIPHASE IIIProductProduct

Development toDevelopment toCommercialCommercial

MarketMarket

PHASE IPHASE IFeasibilityFeasibilityResearchResearch

$100k/6 mos$100k/6 mos

TaxesTaxesFederal Federal

InvestmentInvestment

PHASE IIPHASE IIResearchResearchtowardstowards

PrototypePrototype$500k/24 mos$500k/24 mos

MATCHMAKER

Phase IIBPhase IIBThird-PartyThird-Party

Investment + Investment + 1:2 NSF 1:2 NSF

MatchingMatching

Private Sector or Private Sector or Non-SBIR Non-SBIR InvestmentInvestment

Unique Unique to NSFto NSF

Phase I BPhase I BThird-PartyThird-Party

Investment + Investment + 1:2 NSF 1:2 NSF

MatchingMatching

NSF is not the Final Customer NSF is not buying a product, process,

software, or intellectual property NSF wants to see the grantee successfully

commercializecommercialize the innovation Company needs investment dollars beyond

NSF SBIR/STTR

Doing Business with NSFDoing Business with NSF

SBIR/STTR ReviewsSBIR/STTR ReviewsTechnical Review

– Technical Merit– Broader Impact

Commercial Review– Team– Market Opportunity– Technology, IP, and Competition– Financial Plan

Remember the Supplements!Remember the Supplements!http://www.nsf.gov/eng/sbir/phase_iib.jsphttp://www.nsf.gov/eng/iip/sbir/supplemental_requests.jsp

IB – Gap Funding– Max $50K (1:2) match for third party funds

IIA – Minority Partnership – Max $150K partnership with a CREST institute to delve

deeper into the technology 30:70 (grantee : institute) IIB – Third-Party Leverage

– Max $500K (1:2) match for third party funds IICC – Leverage of Community College

– Max $40K partnership with a MSCC institute to delve deeper into the technology 25:75 (grantee : institute)

REU/RET – Increased Human Capital

IIB SupplementIIB SupplementSupplemental Research

to Phase IIBridge the gap between

Phase II and Phase IIIThird-Party match

requiredThird-Party can be

Private, State, or Federal

NSF/SBIR Phase IIB SuccessNSF/SBIR Phase IIB Success

2004 2005 2006

Outside Investment $10.6 M $43.5 M $57.8 M

NSF Leverging Funding $5.3 M $14.1 M $18.4 M

# of Companies 22 44 49

Companies with >$1M Investment 4 23 29

% (>1M / Total) 16% 52% 59%

TakeawayTakeaway Many SBIR/STTR programs out there! At NSF ~$110M/year granted primarily for seed-

stage development in… – Software & Systems (SS)– Biotechnology & Chemical Technologies (BC) – Electronics (EL)

Program to mitigate technical risk and bridge the “Valley of Death”

Investment in Country’s Innovation Capacity

Useful Links: www.sbir.gov (SBIR Resource/gov run)(SBIR Resource/gov run)

www.zyn.com/sbir/ (SBIR Gateway)(SBIR Gateway)

www.nsf.gov/eng/iip/sbir/ (NSF SBIR homepage)(NSF SBIR homepage)

Contact infoContact info::Tom AllnuttTom Allnutt

email: email: tallnutt@nsf.govphone: 703-292-5332phone: 703-292-5332

Questions??

IB SupplementIB SupplementBridge gap between Phase I & Phase IIFoster partnerships with investors and

attract third party funding Maximum award $50,000 based on a

third party investment of $100,000

IIA SupplementIIA Supplement - Minority Partnership - Minority PartnershipConsistent with the SBIR Legislation

– encourage minority participationOpportunity to further enhance the

science and engineering research underlying the SBIR technology

Phase IIA is a supplement to an active Phase II grant

Phase IIA Minority PartnershipPhase IIA Minority Partnership (continued)(continued)

Requires a Phase II grantee to partner with a CREST/RISE grantee:

http://www.nsf.gov/pubs/2005/nsf05/nsf0520.pdf

Budget not to exceed $150, 000– SBIR portion <30%– CREST/RISE portion >70%

Phase IIB ReviewPhase IIB Review Reviewed in-house Submission must be within original 24 month

award period Reviewed by at least two NSF Program

Officers Two Criteria Award recommendations within 90 days from

the two closing dates of September 1, 2006 and March 1, 2007

Minimum $100,000 total Third-Party investment (s)

Phase IIB InformationPhase IIB Information NSF will match 50% of the funds

received Overall total (Phase II & Phase IIB)

cannot exceed $1,000,000 Payment schedule (50% with the

supplemental award, 50% with the submission and approval of 6 month interim report)

Extends Phase II grant by one (or two) year (s)

IIB Third-Party Funds Can IIB Third-Party Funds Can Come From . . .Come From . . .

Another companyVenture capital firm Individual “angel” investorState GovernmentLocal GovernmentNon-SBIR Federal GovernmentAny combination of the above

MatchMaker MatchMaker

Phase III

Goal - Link Early Stage Investors and Strategic Corporate Partners with Qualified Phase II Grantees

MatchMaker “Value-Added”MatchMaker “Value-Added” NSF Program Officers have done “due

diligence” on companies Because of NSF Program selectivity

Corporate Partners will receive targeted matches

Through MatchMaker Corporate Partners will be locked into Future opportunities

MatchMaker – Grantee CriteriaMatchMaker – Grantee Criteria Definitive plan to protect intellectual

property Consent to NSF SBIR to provide reference

for company Phase II proposal ended 5 years ago or

less Good standing within the SBIR program

Mailbox (SBIRmatch@nsf.gov) was created to allow potential investors and PI’s to register

Program Manager matches their PI’s with potential investors and makes the introduction

MatchMaker Coordinator manages the mailbox and maintains the database

MatchMaker ConnectionMatchMaker Connection