Todd Strother Ph.D. Center for Technology Commercialization UW-Extension, Division of Business & Entrepreneurship
SBIR Workshop Myths and Misconceptions of SBIR/STTR October 3rd, 2018 1:00 PM - 4 :00 PM Madison, WI MG&E Innovation Center, 510 Charmany Drive http://bit.ly/sbirmyths
Outline Govt. funding for Innovative Companies Federal SBIR/STTRs Examples of funded companies Eligibility and the story Wisconsin successes Center for Technology Commercialization Our programing Our grant funds available
Outline and Objectives Identify potential SBIR type companies Learn criteria used to evaluate a fit for the SBIR/STTR program Summarize Wisconsin s success with funding Relate how the CTC assists companies
SBIR/STTR Program Small Business Innovation Research Grants Funds Small Business Research For development of new products Grant goes to the Company ~3.5% of Federal Research $ is set aside to fund Small Company Research ~$2.5 Billion per year.
Purpose/Background of SBIR / STTR Small Business Administration (SBA) directs 11 other federal agencies Encourages: Small businesses to undertake R&D projects Are technically High Risk, High Payoff Have high potential for commercialization Disruptive, not iterative
Participating Agencies Department of Defense Department of Health and Human Services (NIH, CDC, FDA and ACF) Department of Energy NASA National Science Foundation Department of Agriculture Department of Commerce Department of Homeland Security Environmental Protection Agency Department of Transportation Department of Education STTR
SBIR/STTR Roadmap Technology Readiness Phase I Phase II Feasibility Prototype ~$150K ~$1M Phase III Commercialization Technical Proposal Project Team Environment Budget Phase I Final Report Commercialization Plan Technical Proposal Project Team Environment Budget Sales Investment Capital Licensing Product Rollout Plans
Technologies Suitable for SBIR/STTRs Advanced Materials and Instrumentation NSF Radom Corporation
Technologies Suitable for SBIR/STTRs Toxic Chemical Detection DOD Platypus Technologies
Technologies Suitable for SBIR/STTRs Pharmaceuticals and Medical Treatments NIH Stratatech
Technologies Suitable for SBIR/STTRs Walleye Hybrids USDA Northside Industries
Generally NOT Suitable for SBIR/STTRs Established markets/consumer goods Restaurants, Dry cleaners, Auto repair Engineering (where research is complete) Feasibility and prototypes are built; just need money to commercialize Web apps unless Innovative Research in a SBIR topic is required Purchase of large equipment/facilities Need to purchase machinery to scale up manufacture Low significance Current technology mostly solves the problem
SBIRs vs Investors Similar Successful commercialization is the end goal Have to pitch your idea and company Convince someone your idea is fundable
SBIRs vs Investors Different Govt. does not take equity in the company Focus on tech vs. team Govt does not control direction of company
Outline and Objectives Identify potential SBIR type companies Learn criteria used to evaluate a fit for the SBIR/STTR program Summarize Wisconsin s success with funding Relate how the CTC assists companies
Funding Road Map
Go/No go Criteria T Topic: E Eligibility: S Story: T Team:
SBIR/STTR Topic/Technology Fit Develop SBIR/STTR topic search strategy Is it an SBIR or an STTR topic? Which agencies? What are their topics of interest? What are their deadlines? What are their requirements?
Highlights of Eligibility For-profit company located in US Company >50% owned/controlled by: US citizens, permanent resident aliens or domestic business concerns, OR Multiple domestic VCs, hedge funds or private equity firms <500 employees (including affiliates)
What is Your SBIR/STTR Story? A significant need/problem Innovative solution 2-3 research questions to answer high impact commercial product?
Winning Team Principal Investigator Directs the project Qualifications - are they well trained in the topic? Can they run a project (Usually) An employee of the small business Technical Team Skilled technicians Collaborators/consultants Strategic Advisors and Partners CTC staff Consultants
Selection and Evaluation Criteria Peer Reviewed Process Proposals are evaluated on three items: A. soundness, technical merit, and innovation B. qualifications of the team C. potential for commercial success
Outline and Objectives Identify potential SBIR type companies Learn criteria used to evaluate a fit for the SBIR/STTR program Summarize Wisconsin s success with funding Relate how the CTC assists companies
Successes and Influence Since 2005 $200M in investments $85M in SBIR/STTR funding 51% of clients win SBIR awards National average is 15-18% Client Distribution by County Gov Business plan competition 2 of the 4 winners in 2016 7 of the 13 finalists in 2017 (2 of the 4 winners) 8 of the 12 finalists in 2018 (3 of the 4 winners) Early Stage Symposium 9 of 28 Pitched in the Tech Council Investors Network 3 of 21 in Elevator Pitch Olympics Dane 39% 22% Milwaukee area Other 39%
Successes and Influence SBIR Award Success for Wisconsin Pretty much right in the middle 25 th Grant success history Companies funded are flat Grants awarded have dropped Two companies accounted for multiple grants (Lucigen and Orbitech) Successful exits make them ineligible 70 60 50 40 30 20 10 0 Wisconsin SBIR Awards and Companies 2012 2013 2014 2015 2016 2017 Awards Companies
Successes and Influence USDA SBIR success for Wisconsin Overall we are 5 th in the country BUT 2012-15 we were 4 th Over the last two years, we ve slipped to 9 th 120 100 80 60 40 20 USDA SBIR 2012-2018 103 32 30 29 25 0 CA MA NY CO WI WHY? Previous companies are no longer applying for USDA grants Whole Trees Lucigen They are successful without grants now 10 companies awarded down to 5
Successes and Influence Conclusions: We are pretty good a helping our clients get funding Our clients appear to be twice as successful But, the pipeline of applicant companies has stalled And in some areas gone down Here s the plea: Help us find, identify, and assist companies
Examples of USDA Awardees Freund s Farm (Connecticut) Solution to dairy farm manure Cleaned and pressed into flower pots Biodegradable Provides fertilizer for young plants ~$350,000 in SBIR funds Featured on Dirty Jobs
Examples of USDA Awardees Eldertide (Maine) Cultivated Elderberries High in Antioxidants Developed Juice drink AnthoImmune Organic Elderberry Syrup ~$480,000 in SBIR funds Available at Whole Foods
Examples of USDA Awardees Wisconsin Companies Whole Trees Phyllotech Northside Industries Actively looking for others (other agencies too.nsf, NIH, DoD, DOE, etc.)
Outline and Objectives Identify potential SBIR type companies Learn criteria used to evaluate a fit for the SBIR/STTR program Summarize Wisconsin s success with funding Relate how the CTC assists companies
The CTC From Feasibility to Funding The Center for Technology Commercialization Part of the UW-System Services are no-cost to WI companies Assist in preparing SBIR/STTR proposals Business and Commercialization plans Lean Startup methodologies
CTC Introductions Dave Linz, MBA, Co-Director Margaret Ramey, Outreach Specialist Bon Wikenheiser; CTC Co-Director Idella Yamben, Ph.D., Business Development Consultant Todd Strother, Ph.D. Senior SBIR Consultant
The CTC Provides SBIR Assistance Assisted over 1300 distinct client companies Helped almost $200 million in capital funds Over $85 million in direct SBIR funds Increasing by about $15 million a year
Consulting and Advice Clients Someone with just an idea Established profitable companies Typical : 2-5 people; <2 years old
Consulting and Advice Client Characteristics Have a technology based idea Need to do Research and Development Looking for funds Are unsure of SBIR s; which agencies and their fit for funding
SBIR Assistance 1500 topics across 11 agencies Each with different deadlines, formats, focus We help Determine best fit agency and topic Contact the program manager Vet the idea Executive summary to submission Commercialization and Business Plans
SBIR drafts and review Review of the proposal We review the drafts and provide feedback Editing, clarifications, formats Budgets, biosketches, budget justification, human research
Commercialization Plans Necessary for Phase II Market Opportunity Who is your customer? Value of your product Revenue stream Pro forma statements
CTC Programing SBIR Ready Micro-Grants SBIR Presubmission Panel Reviews SBIR Advance Ideadvance
SBIR Ready: Immersion for scientists https://www.wisconsinsbir.org/sbir-ready Four session program learn business model concepts in SBIR framework In depth writing workshops Explore feasibility of their own idea Or an idea from a tech transfer office Can earn up to $3000 towards business idea
Professional Network of SBIR writers We maintain a list of profession grant writers Specialize in SBIRs We vet them for quality List of professional commercial plan writers Write business plans Specialize in Phase II commercialization plans Our clients contract with them for help They will charge you their fee But.
Micro-Grants Eligible Projects: SBIR/STTR Phase I or II Proposal Commercialization or Business Plan CTC-approved Up to $4,500 per Micro-Grant Up to $9,000 per company Contact a CTC Consultant for more details. Company allowed 1 each of SBIR project plan and Commercialization plan Financial and administrative support provided by the Wisconsin Economic Development Corporation and UW Extension
SBIR drafts and review Pre-Submission Review Proposals evaluated by 3 rd party reviewers Scored, Strengths and Weaknesses Ways to improve the proposal Mimic Fed Review Overall Impact Significance Innovation Investigator Approach Environment
SBIR Advance Matching Funds for SBIR grants $75,000 for Phase I $150,000 for Phase II (over 2 years) Activities not supported by SBIR funds Commercialization Customer Validation (Lean Startup) Pursuing IP protection Market analysis Some Technical work
SBIR Advance Eligibility http://www.wisconsinsbir.org/content/sbir-advance-matching-grant Significant Wisconsin presence Have an SBIR Phase I or Phase II underway If Phase I intend on submitting a Phase II If Phase II have >6 months left on the project No more than 2 Phase II s awarded Deadlines August and January
Ideadvance: Seeds High Potential, Early Stage Ideas Funding: $75,000 grant in all disciplines focus on commercialization objectives Application deadline in April Expect 5 awards Education: Teach entrepreneurship Lean Startup methodologies
Ideadvance Eligibility Alumni, faculty, staff and students in UW Systems (not Madison) 2- and 4-year campuses License technologies from WiSys Technology Foundation UW-Milwaukee Research Foundation regardless of their current UW status SBIR idea not necessary
Networking SBDC business consultants SBIR Grant Writers Commercial/Business Plan Writers Accountants Regulatory Experts Payroll specialists UW Law & Entrepreneurship Clinic Scientists, Statisticians, Engineers Business Mentors Merlin Mentors SCORE Venture Capital/Angel Investors
Goals: We work with early stage companies Before they are ready for you? But also work extensively with more developed companies We are looking for referrals! Not just traditional High-Tech Manufacturing firms? Engineering? Agriculture?
SBIR Workshop Myths and Misconceptions of SBIR/STTR October 3rd, 2018 1:00 PM - 4 :00 PM Madison, WI MG&E Innovation Center, 510 Charmany Drive http://bit.ly/sbirmyths www.wisconsinsbir.org