Research, at least good research to prove feasibility, takes money:

 $ for materials       $ for staff/helpers      $ administrative overhead
 $ for equipment     $ for QA functions    $ for facilities
 $ for computers     $ for travel                 $ to feed family while doing it

Development, at least meaningful development and test, takes real money:

 $$ for materials     $$ for staff/helpers     $$ administrative overhead
 $$ for equipment   $$ for QA functions   $$ for facilities
 $$ for computers   $$ for travel                $$ to feed family while doing it

Commercialization, at least successful commercialization, takes a lot of money:

 $$$ for materials    $$$ for staff/helpers    $$$ administrative overhead
 $$$ for equipment  $$$ for QA functions  $$$ for facilities
 $$$ for computers  $$$ for travel               $$$ to feed family while doing it

PLUS:

 $$$ for market research    $$$ for sales force    $$$ for marketing materials
 $$$ for advertising    $$$ for Mfg. engineering   $$$$$$ for Mfg. plant

FUNDING TYPE     FUNDING ENTITY'S INTEREST IN YOU

Equity              Return On Investment (ROI)

Debt                  Security and Near-term Income

Vendor             Wants you as a long term customer

Distributor       Wants you as source of products to sell

Customer          Wants you to solve his problem
                           Wants you to stay in business
                           Wants you to grow/progress
                                     -- helps you design
                                     -- supports manufacturing
                                     -- ready made distribution
                                     -- wants you to be efficient
                                     -- wants economies of scale

With SBIR the Inventor/Small Business Can:

• Fund innovative, high risk, early stage projects
  
  
• Retain ownership of the technology & intellectual property
  
  
• Retain full equity ownership (no stock-for-funds requirement)
  
  
• Retain cash for operations (no payback requirements)
  
  
• Establish a bid-advantaged, sole-source marketing position with a ready-made customer base
  
  
• Receive additional, active support for business planning , commercialization and venture capital acquisition

• Established by Congress in 1982

        -- Small Business Innovation Development Act

• Re-Authorized and Strengthened in 1992

        -- Small Business Research and Development Enhancement Act
        -- increased to 2.5% of extramural R&D budgets
        -- extended funding through FY2000

• More than 50,000 awards worth >$7 billion

• 10 largest federal R&D agencies involved

• Over 5000 new contracts/grants in 1996

• Provided almost $1 billion in 1996

• INCREASED to $1.2 billion in 1997

PHASE I

FUNDS: up to $100,000 (some less)
TIME: 6 months (some 9 months)
PURPOSE: demonstrate feasibility (can be on paper)
PRODUCT: report and Phase II Proposal (using Phase I funds)

PHASE II

FUNDS: up to $750,000 (some less)
TIME: up to two years (or more)
PURPOSE: test/demonstrate the concept
PRODUCT: report and/or prototype

PHASE III

FUNDS: unlimited (no SBIR funding BUT can market sole-source to anywhere in US Government)
TIME: unlimited (no graduation, no size limit)
PURPOSE: commercialization of the concept
PRODUCT: products or services for sale

• Contracts vs. grants

• $ value and time of performance limits

• Profit % allowed

• Phase I to II interim funding

• Research plan vs. project plan

• Paper vs. electronic procurement package

• Paper vs. electronic submission

• Concern for compliance

• Agency culture (knowledge vs. solutions)

• Evaluators (government vs. contractors)

• Dates, addresses, proposal formats, etc.

• No more than 500 employees 
  
  
• Organized as "for profit" firm
  
  
• Independently owned and operated 
  
  
• 51% owned by U.S. citizens 
  
  
• Principal place of business in USA 
  
  
• Principal investigator must be primarily (51%) employed by the

proposing firm 


• At least two-thirds of the Phase I & one-half of Phase II must be accomplished by the proposing/prime contract firm (joint ventures and limited partnerships are permitted) 
  
  
• All work must be performed in the USA

• Acquire procurement package (get on the mailing list, or download electronic version from Internet) for the agency(s) of your choice 
  
  
• Review procurement package for items (elements) of interest -- an opportunity for you. 
  
  
• Conceive solution(s) to the problem/opportunity of interest.
  
  
• Publish a proposal in response to the RFP element.

• Publish & submit a COMPLIANT proposal:

• Publish & submit a compelling proposal:

• Submit the same idea to more than just one agency (via modified proposal).

• Solution to Agency's Problem or Enhancement to Agency's Mission
  
  
• Early Stage, Innovative Idea/Concept
  
  
• Actual Research (required to show feasibility -- real possibility of failure)
  
  
• Feasibility Can Be Determined for the Funds Available (<$50K - $100K)
  
  
• R&D Needed in Phase II to Further Develop and Test the Idea
  
  
• Prototype Can Be Demonstrated With Limited Phase II Funds (<$750K/$500K)
• A Demonstrable Business Opportunity For You

• Acquire Funds for Plant and Equipment, Advertising, ER Support, Patents, etc. 
  
  
• Research a Better Rose (unless agency wants one -- no unsolicited proposals)

• Over 60,000 Phase I proposals submitted annually 
  
  
• Up to 33% (17% on average) at some agencies are NON-compliant 
  
  
• Average size of participating firm is 12 persons 
  
  
• Approximately 20% are lone individuals wanting to start their own company 
  
  
• Typically one Phase I award for 8 -- 10 proposals 
  
  
• Typically one award for every two -- three elements 
  
  
• Often no proposals for any given element 
  
  
• Typically one in two to three Phase I's win a Phase II
  
  
• Typically Phase I winners have submitted two or more prior proposals

• Use SBIR as a strategic opportunity, not just an income vehicle

• Check out you idea with customer BEFORE the procurement package/RFP comes out.

• Tailor the proposal to match the culture of the agency to which you are bidding.

• Innovation does not have to be "rocket science" -- just a better way to do things.

• Make sure your proposal is both responsive and COMPLIANT.

• "If at first you don't succeed try, try again."

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