SBIR ADVANCE GRANT APPLICATION GUIDELINES Next Deadline: 4:00PM CDT November 24, 2014
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1 SBIR ADVANCE GRANT APPLICATION GUIDELINES Next Deadline: 4:00PM CDT November 24, 2014 Items referred to in this document needed to complete your application: o Cover Page with signed SBIR Advance Agreement o Copy of the proposal for the qualifying SBIR award and the award documentation for that proposal o 3 Page Project Description Questions? For questions about the application process or general questions about the SBIR Advance program, please contact Dr. Todd Strother at or David Linz at Objective: WEDC created the SBIR/STTR Matching grant program to provide funding, training, and other resources to Wisconsin businesses to advance the commercialization of SBIR/STTR-funded technology and accelerate economic and job creation impact in Wisconsin. Preference will be given to early stage companies that are first time SBIR awardees. SBIR Advance funding is intended to cover company technology commercialization costs that are not covered by federal SBIR and STTR awards, and that advance the development of new technology, technology-based products, and business development. Eligibility: The following companies are eligible to apply for the SBIR/STTR Matching Grant: Phase 1 Match Grant Current/recent SBIR/STTR Phase 1 awardees that are Wisconsin based small businesses that are eligible for and intend to proceed to Phase 2, and o Are currently conducting a Phase 1 SBIR project, or o Have completed a Phase 1 project within the past 12 months AND are still eligible to submit a Phase 2 proposal. Phase 1 applicants must identify a commercial team and agree to participate in the Lean Startup Training Program outlined below. Phase 2 Match Grant Current first-time Phase 2 awardees with more than 6 months before award end date. Applicants who have both a current Phase 1 and Phase 2 award should apply for a Phase 2 match. NOTE: Companies who have awarded more than one Phase 2 SBIR award are not eligible for this SBIR Advance solicitation. Proposal Requirements: Companies that intend to submit a proposal by November 24 must register online by completing the pre-submission form by November 14: (pre-submission forms). The presubmission form includes information on the date of Phase 1 award and the due date of the Page 1 of 15
2 Phase 2 application or Phase 2 award start and end date, previous SBIR awards, revenue, investor funding, and full time and part time employment. A complete proposal package includes the following and must be submitted by 4:00PM CDT November 24, All documents should be converted to pdf format and combined into two pdf files, one file with the SBIR proposal, and one file with the remaining documents specified below. Include the company name in the pdf file names. The proposal package (two pdf files) should be submitted by to wisconsinctc@uwex.edu o Copy of SBIR Proposal that was funded by the federal agency. This is the award that the company is applying to match. Applicant can provide the entire winning SBIR proposal pdf package submitted to the agency. As a minimum, the applicant should provide as a single pdf copy of the Project Summary/Abstract, Research Proposal/Project Description, Project Team Description/Bios, and Commercialization Plan for Phase 2 awards. This will be a separate.pdf document submitted o Cover Page Use the SBIR Advance Cover Page Template at the end of this document. o Copy of grant award (or contract) documenting the federal SBIR award. This is the award that the company is applying to match. o Project Description The Project Description should be no more than 3 pages maximum (single spaced, 12-point font, one inch margins.), with approximately ½ to ¾ page each for these 4 sections: Need and Impact Provide a justification of why funding from the State is needed at this time to accelerate the commercialization of the technology. Clearly show how the State funding will accelerate the commercialization of the technology and benefit the company s development including future employment, investor funding, and product sales. Describe the expected Wisconsin impact resulting from the matching award. Use of Funds Provide a description of what the Matching funds will be used for and a justification for these uses. Provide a description of the expected results and the commercial milestones that will be achieved as a result of the Matching Grant. Indicate if part of the funding will be spent outside of Wisconsin and if so, how much. Business Model Provide a short description of the current version of the company business model for the development and commercialization of the technology. The business model description should include brief descriptions of: - Customer Segment(s) being addressed - Value Proposition being delivered to these customer segments - Revenue Model for the company that is envisioned based on the products and services being developed in this SBIR/STTR project Page 2 of 15
3 - Marketing and Sales Strategy and Channels expected to reach and deliver value to these customer segments - Cost Structure Summarize what is known today about costs to bring the product to market, to acquire customers, to manufacture the product and deliver to customers, and to operate the company. - Key Activities and Partners currently and needed to validate and execute the business model Commercialization Team Plan Phase 1 Match applicants must identify the team that will participate in the Lean Startup/Customer Development Program and the Team capabilities to participate in this Program. Phase 2 applicants should describe the staff and partners that make up the commercial/business team for the company. Note that Match Grant funds payout is made upon completion of agreed upon milestones and deliverables as described below. For Phase 1 applicants, deliverables include completion of the LEAN Startup Training. Matching Grant Program Description: SBIR Advance Grant provides 50% for match Phase 1 SBIR/STTR federal awards up to $75,000. Grants will be paid out upon completion of Lean Startup/Customer Development Program and agreed upon deliverables such as completion of an approved draft commercialization plan, Phase 1b awards, successful submission of Phase 2 SBIR/STTR proposal, and any final reporting requirements to Center for Technology Commercialization (CTC). Phase 1 Matching Grant awardees will participate in the Lean Startup/Customer Development Program as described below. Awardees should be prepared to participate in the next Program which begins on or around February 9, Notification of awards will be made by January 5, SBIR Advance Grant provides $75,000 per year for up to two years)to match Phase 2 SBIR/STTR federal awards. Awards will be paid out upon completion of agreed upon milestones. Companies may apply for $75,000 (One Year of Match) for this solicitation. SBIR Advance Grant provides up to $100,000 onetime to match federal Phase 2b or other Beyond Phase 2 federal awards that require matching funds and that support approved commercialization activities. Companies must notify Dr. Todd Strother and advise CTC of the terms of the agency award prior to submitting a proposal for this Match Grant. Use of funds: Matching funds must be used to accelerate commercialization of the SBIR project technology and can be used to support commercialization costs not covered by federal SBIR/STTR awards including but not limited to: customer discovery and validation activities market research, data subscriptions Page 3 of 15
4 intellectual property assessment and patent filing feasibility assessment commercialization plan Added research scope to extend and/or accelerate market applications and/or impact Bridge funding to Phase 2 award Agency Phase 1b and Beyond Phase 2 funding match Prototype development and testing Outside lab testing and validation Regulatory assessment and planning Approved travel to meet with customers, partners, licensees, etc. Selection Criteria: All applications will be scored from zero to 3 and ranked based on these criteria: Need for State Match Funds Why does the company need State funds at this time? Use of Funds What will the Match funds be used to accomplish and what is the significance for accelerating commercial milestones? Wisconsin Impact What is the significance for Wisconsin and the expected Wisconsin impact including company development, job creation, and other impacts? Team and Environment Team includes both the research and product development team, and the commercial team that will bring the product to market. For Phase 1 Match applicants, this criterion will evaluate the commitment to and team plan for the Lean Startup Training. Environment represents the factors essential for commercial success, such as facilities, advisers, strategic partners, IP status, etc. A score of zero indicates the proposal is not responsive for this criterion, 1 indicates additional information is needed, 2 meets minimum proposal requirements, and 3 indicates the most responsive and well-supported for this criterion. Review Process: Applications will be reviewed and scored for compliance to the Matching Fund requirements as indicated above. Applications will be ranked by a Review team consisting of CTC and WEDC staff, and external reviewers. Awards will be approved by an Investment Committee that includes CTC and WEDC Division Directors. Selection of proposals received by November 24, 2014 will be made and announced by January 5, Schedule: Companies must indicate their intention to apply for this round of Matching awards by completing the online registration by November 14, (pre-submission forms) Page 4 of 15
5 Applications for this round of awards are due 4:00PM CDT November 24, 2014, with awardees announced by January 5, The next Lean Startup/Customer Development Program cohort for Phase 1 Match applicants will begin on or around February 9, Program Description Lean Startup/Customer Development This Section applies only to Phase 1 Match Awardees The SBIR Advance Program utilizes Lean Startup methodologies as a framework for commercialization activities to better prepare SBIR/STTR recipients to develop their business model and commercialization plan for a Phase 2 proposal. The process is intended to shorten the product development cycle by using an iterative approach to test business assumptions with customers, measure results, and validate effects. This approach to product commercialization is being used by a variety of institutions including Startup Accelerators, universities, and by the National Science Foundation in their NSF Innovation Corps (I- Corps) program. NSF reports increased success rates of SBIR proposals for teams who have gone through icorps. To learn more about Lean Startup methodologies, review the following video: Additionally, you may review the following books that detail the Lean Startup method. 1. Ries, Eric (2011). The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. Crown Publishing. 2. Blank and Dorf (2012). The Startup Owner's Manual: The Step-By-Step Guide for Building a Great Company. K&S Ranch. You may view the Program Syllabus at this link: SBIR Advance LEAN Course.pdf At minimum, LEAN Course Program supports the following commercialization activities to prepare your company for development of the required Phase 2 proposal Commercialization Plan. Commercialization Activities: 1. Market research and commercial assessment to confirm: Customer needs and pain points Competitive advantage Market size Minimum product features that address customer needs 2. Prototype development and testing 3. Strategic revenue model assessment 4. Strategic distribution channel assessment and marketing strategy 5. Financing needs and financial projections Page 5 of 15
6 All Phase 1 Match awardees must complete Lean Startup training, offered as a flipped classroom model where the concepts are immediately applied to advance the awardees commercialization objectives. Application and Submission Information The SBIR Advance Program will maintain confidentiality of the full details of your application proposal and supporting documents. However, as the program is financially supported by both the State and UW System, CTC may need to release the name/business name and a short description of the business idea for reporting and promotional purposes. How to Submit your Application SBIR Advance applications must be received by 4PM CDT on November 24, Applications submitted after this time will not be accepted. Completed applications will be submitted to the SBIR Advance Program at wisconsinctc@uwex.edu with the subject line SBIR Advance Application-November 24. Please contact the Program Manager (wisconsinctc@uwex.edu ) if you do not receive confirmation that your application was submitted successfully. Point of Contact If you have questions about the program, contact Todd Strother at wisconsinctc@uwex.edu or by phone at Example SBIR Advance Grant Agreement. Awardees will be asked to review and sign the following grant agreement, which also includes a Lean Startup Training and Compliance form. SBIR Advance Grant Agreement This letter agreement sets forth the terms of your SBIR Advance Match Grant and must be executed by you. 1. Project Performance & Payment/Financial Management: As part of your Grant Award, you agree to perform the Project as described in the Grant Application. Disbursements will be made by check and mailed directly to the company as designated on the SBIR Advance Disbursement Form (guidance will be provided to Match awardees). 2. Terms. The Recipient will: a. Maintain Eligible Business status for five (5) years after receiving the award. An eligible business means an SBIR awardee business that is located in Wisconsin and that meets the eligibility requirements as defined in the Grant Application. Page 6 of 15
7 b. From the date of acceptance, agree to perform the Project within 12 months from date of award. Failure to adhere to the timeline may result in your Grant Award being terminated, in which event UWEX will provide written notice of termination. If you intend to terminate the Project, you must notify the SBIR Advance Program Manager in writing, at least thirty (30) days prior to termination of the Grant Award. c. Provide SBIR Advance with information regarding their business s employment, salaries and wages, and capital leverage on a periodic basis in accordance with the reporting dates and requirements found in the Investment Reporting form below. d. Phase 1 Match awardees agree to submit a Phase 2 SBIR/STTR proposal and complete the LEAN Startup Training and other deliverables defined in the Matching Grant award. e. Phase 2 Match awardees agree to complete the Phase 2 SBIR project and Matching Grant deliverables, submit quarterly progress reports on milestone status and completion, and continue to advance the business to commercialization of the SBIR award technology. 3. Lean Startup Training and Compliance (Phase 1 Match awardees only). Phase 1 awardees will be required to read and sign the Lean Startup Training and Compliance Form (see below). 4. Reports. SBIR Advance is required to collect information related to your business progress. This information will be reported to the Wisconsin Economic Development Corporation (WEDC) to comply with SBIR Advance Funding requirements. To be in compliance, SBIR Advance awardees are required to complete the Investment Reporting form. For up to five (5) years, awardees will use the Investment Reporting form to provide information regarding their business s employment, salaries and wages, and capital leverage per the reporting dates and requirements stated in the Investment Reporting form. 5. Confidentiality. UWEX understands that you may disclose proprietary information to CTC. UWEX agrees to keep in full confidence and not reveal to any other person or organization any information proprietary to you (or your Company, if applicable) pursuant to this Grant Award. Any proprietary information revealed to UWEX shall be marked confidential at the time of disclosure to UWEX. UWEX will not disclose such information to any other party except: Page 7 of 15
8 a. to the extent necessary to comply with law or the valid order of a court of competent jurisdiction, in which event the party making such disclosures shall seek confidential treatment of such information; b. as part of its normal reporting or review procedure, as applicable, to its auditors and its attorneys, provided, however, that the auditors or attorneys agree to be bound by the provisions of this Section; c. as part of its permitted distribution of the Program; or d. to enforce its rights pursuant to this Agreement. 6. Publication. Company will allow UWEX and the WI Economic Development Corporation (WEDC) the irrevocable right without any fee to reproduce, publish or otherwise use any and all information presented in the Investment Report. Additionally, any of the awardee s publications, including newsletters, websites, and news releases, shall state the awardee is supported and financed by SBIR Advance and WEDC. 7. Use of Logo. During this grant period, you agree to display the SBIR Advance logo on any materials used to promote the company/team funded by this Grant Award and any materials developed using this Grant Award. This includes but is not limited to websites, customer surveys, and promotional flyers. Acceptable logo versions must be obtained from the SBIR Advance Program Manager. 8. Funding Acknowledgement. All materials produced under this Grant Award shall acknowledge the support of SBIR Advance and bear the citation Produced under a grant from the UW-Extension SBIR Advance through its partnership with the WI Economic Development Corporation. 9. Liability. Each party to this Agreement shall be responsible for any and all actions, suits, damages, liability or other proceedings brought against it as a result of the alleged negligence, misconduct, error or omission of itself and/or any of its officers, agents or employees. Neither party is obligated to indemnify the other or to hold the other party harmless from costs or expenses incurred as a result of such claims. 10. Default. If you fail to comply with or perform, in any material respect, any of your obligations under this Agreement, such failure will constitute an Event of Default. SBIR Advance will send a written notice of such default to you setting forth with reasonable specificity the nature of the default. If you fail to cure such default within 30 calendar days, SBIR Advance will declare you in default. Upon such declaration of default, this Agreement may be terminated and you may be required to return 100% of the total amount of funds disbursed under this Agreement. SBIR Advance may extend the 30 day cure period set forth earlier in this paragraph provided that you begin to cure such matter and thereafter diligently pursue a cure. Lean Startup Training and Compliance (Phase 1 Match Awardees only) Page 8 of 15
9 Lean Startup Compliance By accepting the SBIR Advance Phase 1 Match award, I will commit to using a Lean Startup process to test and advance the development of my commercialization plan. To this end, I agree to: 1. Have a 1hr Kickoff/Project Management meeting with the Lean Startup Consultant. 2. Identify a business mentor, if not already part of the team. Teams without a business mentor should use counselors in the Center for Technology Commercialization, or preferably, identify a business mentor of their choosing. 3. Meet weekly with my business mentor to prepare learning objectives for the following week. Document mentor interactions in LaunchPad Central. 4. Work closely with my Lean Startup commercialization consultant to develop and execute an individualized plan based on Lean Startup best practices. 5. Complete bi-weekly Lean Startup learning objectives via LaunchPad Central. This includes: 1. Regular monitoring and participation, when necessary, in message board content. 2. Consistent progression through just-in-time learning objectives. 6. Participation in mandatory group video conference calls to update all Stage 1 awardees on my team s recent learning and next steps including a brief presentation of my business model canvas learning. 7. Consistently document learning and progress in LaunchPad Central including meetings with business mentors as well as learning via customer interviews. Lastly, I will subscribe to the following Lean Startup Manifesto (Blank, 2012) to the best of my abilities. i. There are no facts inside your building, so get outside and talk to customers. ii. Failure is an integral part of the search and expedites my learning. iii. Address the most critical learning objectives first in order to move my idea to market quickly. iv. Make continuous iterations and pivots to your business model as warranted by the customer development process interviews. v. Design experiments and test to validate your guesses. Investment Reporting Business performance data is collected at the beginning of your SBIR Advance award and before the final disbursement. The Investment Report is then updated annually for four (4) additional years thereafter. The SBIR Advance Program will work with your team to ensure reporting compliance. Any changes to your business contact information must be reported to wisconsinctc@uwex.edu immediately. Page 9 of 15
10 Notes on Investment Reporting: Industry classification by 6-digit NAICS code is provided by the business as the most appropriate and specific classification using the 2012 codes available at Economic lmpact - Additional capital excludes the award listed under "SBIR Advance lnvestment lnformation." Debt financing includes bank loans, loans from family and friends, and revolving loan funds. Equity capital includes funds from angel investors, venture capitalists and seed funds. Page 10 of 15
11 Company Information Date: Investment Report Company Name: Mailing Address/City: CEO/Owner Name: Contact Name: Contact Telephone: Contact Company stage (select most appropriate): Startup: Early stage/emerging growth: Industry classification by 6-digit NAICS code: Company Description: SBIR Advance Investment Information Date of award: January 2015 Amount of award: Up to $75,000 Type of award (grant/loan/equity/royalty-based): SBIR Advance Grant Economic Impact Current number of people employed full-time: Current number of people employed part-time: Of those employed, how many (if any) are paid internships, unpaid internships, or cooperative work experiences? Please specify number and type. Total dollar amount of salaries and wages paid for the most recent month: Total dollar amount of additional grant funds received in the most recent full year (excluding SBIR Advance): Page 11 of 15
12 Total dollar amount of additional debt financing obtained in the most recent full year: Total dollar amount of additional equity capital raised in the most recent full year: Total dollar amount of additional royalty-based financing raised in the most recent full year: Total dollar amount of gross sales/revenue for the most recent full year (optional): Page 12 of 15
13 SBIR Advance Cover Page Template SBIR Advance Proposal Terms and Conditions Only applicant(s) who meet and agree to the following criteria will be considered eligible to submit an SBIR Advance proposal: Applicants are SBIR/STTR awardees and eligible for the Matching grant as per the criteria set forth in this SBIR ADVANCE GRANT APPLICATION GUIDELINES document. Applicant(s) will define all key contributors in this application. Competitive applications will have a diverse team to help with key commercialization milestones. The project must be focused on commercial development of an SBIR funded technology. Project milestones and deliverables must be achievable within 6 months of the start of funding for Phase 1 Match awards, 24 months for Phase 2 Match awards. Additional time may be granted on a case-by-case basis upon review by the SBIR Advance Program Manager, Lean Startup Consultant, and business mentor. All Phase 1 Match awardees must complete Lean startup training as a deliverable. All awardees must report their progress on an annual basis for a period of 5 years after award according to SBIR Advance guidelines. The applicant certifies that to the best of his/her knowledge and belief, the information being submitted on this SBIR Advance application is true and correct. The applicant(s) certifies that (s)he has disclosed and will continue to disclose any occurrence or event that could have an adverse material impact on the project. Adverse material impact includes but is not limited to SBIR award termination, lawsuits, criminal or civil actions, bankruptcy proceedings, regulatory intervention or inadequate capital to complete the project. Electronic submission of proposals should be sent to wisconsinctc@uwex.edu. An confirmation will be sent upon receipt. Please call if you do not receive confirmation. Page 13 of 15
14 SBIR Advance Cover Page DATE OF SUBMISSION: PROJECT TITLE: COMPANY NAME: COMPANY ADDRESS PHONE NUMBER OF EMPLOYEES: HAVE YOU RECEIVED INVESTMENT FUNDING TO COMMERCIALIZE THIS IDEA? If so, please describe. Applying for (Mark one): Phase 1 Match Phase 2 Year 1 Match Phase 2 Year 2 Match Phase 2b Match PRINCIPAL APPLICANT: NAME: PHONE: TITLE: KEY TEAM MEMBERS: NAME: PHONE: TITLE: NAME: PHONE: TITLE: Page 14 of 15
15 NAME: PHONE: TITLE: DESCRIBE ADDITIONAL CONTRIBUTORS BELOW INCLUDING ADVISORS (Names, Titles Affiliations) APPLICANT ACKNOWLEDGEMENT: I agree to the terms outlined above and acknowledge that this project is eligible for submission based on the criteria set forth in this SBIR ADVANCE GRANT APPLICATION GUIDELINES document. The Proposal Application will be reviewed and scored by the SBIR Advance Investment Committee and only those projects which are scored highest by the Committee will be funded. Applicant(s): Applicant(s) Signature: Page 15 of 15
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