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by Steven W. Arms

Federal Agencies must spend a percentage of their R&D budgets to fund innovation by small businesses

Small businesses can find seed money to fund innovative ideas even in today's challenging economic climate. The National Small Business Innovative Research (SBIR) program grants thousands of dollars to firms that submit outstanding proposals to federal agencies with research budgets, including the Department of Defense (DoD), the Department of Health and Human Services, the National Science Foundation (NSF), NASA, and the Environmental Protection Agency. MicroStrain, Inc., has been extremely fortunate in that we have been able to retain all the equity in our firm as we have developed a number of new products with SBIR grants. And, the SBIR proposal writing process has forced us to focus our product development plans.

We began by winning Phase 0 SBIR funding ($10,000 for one year), which our home state of Vermont provides to small businesses on a competitive basis. This allowed us to generate preliminary results convincing enough to win Phase I SBIR awards (up to $100,000 for a six-month feasibility study). Successful Phase I companies are also eligible to compete for Phase II awards, which grant up to $750,000 for two-year development programs.

The SBIR requires federal agencies to spend a certain percentage of their R&D budgets each year to fund innovation by small businesses, so why not apply yourself? You can get information about the SBIR and STTR (Small Business Technology Transfer) online:

Program Description-> http://www.sba.gov/sbir/indexsbir-sttr.html Frequently Asked Questions-> http://www.sba.gov/sbir/indexfaqs.html

Finding a Fit

To determine which government agency might be interested in your idea or technology, you can review solicitations for these agencies at www.sba .gov/sbir/indexprograms-otaagency.html. Some requests for SBIR/STTR proposals are very specific (typical of the DoD), others are very general (typical of the NSF).

You can find an online handbook for SBIR proposal preparation at www.sba.gov/gopher/Inno vation-And-Research/SBIR-Pro-Prep. Another good resource is the series of National SBIR/ STTR conferences held at various locations nationwide (see the calendar at www.sbirworld.com/Conferences/ calendarview.asp?mnuConf=). These conferences enable face-to-face meetings with knowledgeable people at various federal agencies who can answer questions, guide you to the portion of their solicitation that may apply to your idea or technology, and provide contacts within the agency that may be interested in what you have to offer.

The Successful Proposal

It takes most grant writers approximately one person-week to complete a Phase I proposal. The Phase II proposal can take from two to four person-weeks to complete, since it is more extensive and requires planning for two years of work. The Phase I progress report is generally incorporated into the Phase II proposal as well.

It is essential to read the instructions thoroughly before beginning. More experienced proposal writers will generally be more efficient at getting it done, and those who enjoy the grant-writing process will find it easier to complete. If you are new to the program, you should allow more time to complete it. Some sections of the grant, such as relevant experience of the investigator(s), company resources and environment, executive summary, etc., can be used in a number of proposals but should be edited to highlight the investigators' experience and company resources that are most relevant to the proposal.

It is a good idea to be familiar with the scientific literature in the area you're proposing to, and your introduction should include references to previous work (journal papers, abstracts, books, patents). In many cases, a letter from a Fortune 500 firm supporting the proposal may help to demonstrate commercial potential for the idea or technology.

Good proposals are innovative, well written, well organized, and convincing. We are careful to include a list of target specifications to be met during the Phase I effort. We also include in our research plan a "gold standard" which we use to test the performance of our new idea/technology. At the end of Phase I, we can then report how well we were able to meet our target specifications. This ensures that the reviewers of our Phase I proposal are clear on how we define success. Furthermore, Phase I results that meet or exceed target specifications will support our Phase II proposal, because we have clearly demonstrated feasibility during Phase I.

Following Acceptance

What exactly is done in the work plan will vary depending on the proposal, but in general, for new sensors, prototypes would be designed, built, and carefully tested. Revisions may be required depending on the test results, and be performed in Phase I and/or Phase II. New ideas, improvements, and enhancements will likely be generated during this process. It is important to document any difficulties that were encountered and how they were overcome. These test results and new developments form the basis of the Phase I final report.

Though you do not give up rights to what you develop during the process, it is always a good idea to file patents on ideas that have commercial potential. Patent costs are not covered by SBIR funds, but a small business is allowed to charge a fixed fee (typically 6%), which can be used to cover at least a portion of the patenting expenses.

Everybody Wins

I strongly encourage sensor entrepreneurs and innovative sensor designers to get more information on these programs and compete in the process. When good technology progresses, we all win.

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