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The National Science FoundationThe National Science FoundationSmall Business Innovation Research (SBIR)Small Business Innovation Research (SBIR)Small Business Technology Transfer (STTR)Small Business Technology Transfer (STTR)
ProgramsPrograms
Errol Arkilic
Office of Integrative Activities
Division of Industrial Innovation and Partnerships
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204/18/23 2Valhalla Confidential
Venture Capital
Angels / Friends &
Family
Private Equity
Company Profits
Non-profits / Grants
The Government
Commercial Banks
Sources of Funding for Innovation
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ENG
NSFGOALI I/UCRC
PFI
ERC
NSFSTTR
NSFSBIR
Small Business
Investors
Industry
Valley of Death
-----------II-R----
------II-B---------------------
------------- Supplements
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Ava
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Discovery Development Commercialization
Level of Development
AccelerateAccelerateInnovationInnovation
Innovation Spectrum
UnbridgableGulf of Death
I-Corps
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The design, invention, development and/or implementation of new or altered products, services, processes, systems, organizational structures, or business models for the purpose of creating new new valuevalue for customers and financial returns for the firm
Innovation*
*Innovation MeasurementA Report to the Secretary of CommerceJanuary 2008
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NSF MissionTo promote the progress of science and engineering; to advance the national health, prosperity, and welfare; and to secure the national defense
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Venture Capital Threshold
Angel Capital ThresholdEconomicDevelopmentFunds Threshold
NSFSBIR/STTRThreshold
Technology Risk
Market Risk
People RiskFinance Risk
Friends,Family (and Fools)Threshold
What is your Enterprise Risk Profile? (are you NSF SBIR material)
Senior DebtThreshold
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SBIR Program Information• Funding Level
– NSF ~$120 million at NSF (for Phase I, Phase II, Phase IIB combined)
– Federal ~$2.6 billion total in FY11 (11 agencies)– SBIR = 2.5% and STTR = 0.3% of NSF budget
• Applicant must be a for-profit Small Business (500 or fewer employees) located in the U.S.
• At least 51% U.S.- owned by individuals and independently operated
• PI’s primary employment is with small business during the project
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Funding Criteria
• Must be high-payback innovations involving high risk* and commercial potential •Demonstrate strategic partnerships with research collaborators, customers and equity investors•We do NOT fund– Evolutionary optimization of existing products and
processes or modifications to broaden the scope of an existing product, process or application
– Analytical or “market” studies of technologies
* From the market viewpoint
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NSF SBIR Program
• $120 M/year in chunks of $150K (Phase I) and $500K (Phase II)• Broad topics
– Biotech and Chemical Technologies – 3 Program Managers – Information and Communications Technology – 3 Program Managers– Nano/Advanced Materials and Manufacturing – 4 Program Managers – Education Applications – 1 Program Manager
• Placing bets on high-risk/high-impact innovation research – NOT Basic Research– NOT Equity Investment– NOT contract R&D
• Solicitation released twice per year (in Sept. and March)• Two due dates: Dec. and June• All proposals are externally-reviewed
Reviewers: Equity Investors, Industrial, AcademicReviews: Technology and Commercial reviewers
• Dialog encouraged throughout the process• Decision made three-four months after proposal receipt• Cash in the bank 6 mos after proposal receipt• After the cash, immersion in NSF network
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Review Criteria (Technical)
• Intellectual Merit
– A sound approach to establish technical & commercial feasibility
– Technical Team qualifications
– Sufficient access to resources
– Reflects “state-of-the-art”
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Review Criteria (Commercial)
• Broader/Commercial Impacts
– What may be the commercial and societal benefits of the proposed activity?
– If the benefit is primarily commercial, does the potential impact warrant significant NSF support?
– Does the business team possess the relevant skills to commercialize the proposed innovation?
– In what business skill areas is the team lacking and how do they plan to fill these gaps?
– Has the proposing firm successfully commercialized SBIR/STTR-supported technology where prior awards have been made? (Or, has the firm been successful at commercializing technology that has not received SBIR/STTR support?)
– Evaluate the competitive advantage of this technology vs. alternate technologies that can meet the same market needs.
– Does the proposal lead to enabling technologies (instrumentation, software, etc.) for further innovation?
– How well is the proposed activity positioned to attract further funding from non-SBIR sources once the SBIR project ends?
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NSF SBIR Program
• World’s biggest seed-stage program
• Focus on market not technology
• Powerful transition tool
• Deep ties to private sector
• High-leverage for post-academic effort
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NLessons Learned
• “Market Issues” biggest reasons for failure– No one cared– Competition was stiffer than believed
• Team is more important than idea
• It costs WAY MORE to get to market
• Education/Intervention can help
• IP is overvalued at (almost) all stages
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