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Universities are Key Partners in Many SBIR Successes
For small businesses interested in applying for a Small Business Innovation Research (SBIR) award, your local university is a critical resource to aid in your success. Companies may be surprised to learn just how common SBIR-university partnerships are across the country, as many people assume universities primarily associate with Small Business Technology Transfer (STTR) awards. Studies conducted by the National Academies of Science, Engineering and Medicine (NASEM) identified more than 380 research institutions that were named as working with at least one SBIR company and they covered 48 states (Alaska and North Dakota were the only states that do not name a university partner in the studies). This breadth indicates all levels of research universities have the talent and resources to partner with small businesses.
SBIR competitively awards funds to U.S. small businesses for the purposes of stimulating technological innovation that can address federal research and development (R&D) needs and increase the rate of commercial development. Awarded companies generally first receive a Phase I award of between $50,000 and $250,000 to establish the technical merit of their project. Successful projects may compete again for a Phase II award, generally worth $750,000 to $1,700,000, to advance the technology. Some businesses may receive a Phase III contract to produce a new product resulting from the development process.
All federal agencies with more than $100 million in extramural R&D funding manage SBIR programs. NASEM have studied the five largest programs, operated by the Department of Defense (Defense); Department of Health and Human Services, focused on the National Institutes of Health (NIH); Department of Energy (Energy); National Aeronautics and Space Administration (NASA); and, National Science Foundation (NSF) and some of the highlights of the studies can be seen below.
Businesses use SBIR funds for R&D activities but, unlike the STTR program’s requirement to work in partnership with a research center, SBIR awards can be used for external or internal development costs. While there is no requirement for a SBIR recipient to work with a university, past studies of the SBIR programs by NASEM have identified many such collaborations, and SBIR.gov’s success stories include many examples of these partnerships.
The most common forms of SBIR-university collaborations include the following:
- SBIR companies and university IP. Some SBIR projects are built around university IP that was either developed by an investigator who ultimately joined the project or licensed from the university to the company. According to the NASEM studies, the former is somewhat more common than the latter. Less than 10 percent of SBIR projects at Defense, Energy and NASA involve university IP; at NIH and NSF this was much more common, with 17 and 19 percent, respectively, using university technology developed by a team member, and 14 and 13 percent licensing university technology.
- SBIR companies and university talent.Many companies recruit faculty or graduate students to participate in the SBIR project. This type of arrangement can provide the SBIR company with access to talent that has a uniquely-sophisticated understanding of the technology to be developed by the project. The frequency of this activity ranges from about 15 percent (NASA) to 38 percent (NIH), according to NASEM’s survey respondents. Across all five agencies studied by NASEM, companies worked with faculty more often than with graduate students. SBIR.gov’s tutorial on university partnerships provides advice on this type of relationship.
- SBIR companies contracting research services. Beyond hiring faculty to participate in the project, many SBIR awardees contract research assistance or facility access from universities. NASEM respondents reporting this activity ranged from about 20 percent (NASA and Defense) to 37 percent (NIH).
- Universities as funders of SBIR companies. Many universities now provide grants, loans or investments to companies with a relationship to the school’s faculty or IP, and NASEM’s surveys suggest that SBIR companies have benefited from these funds. Follow-on funding was reported as rarer for SBIR awardees from Defense (2 percent) and NASA (0 percent) than at Energy (8 percent), NSF (9 percent) or NIH (9 percent). The Ohio State University’s pre-seed fund with Rev1 Ventures is just one example of this type of funding.
- Universities as providers of application assistance. Many universities also serve as a source of pre-application/Phase 0 support for companies. For example, 10 universities are currently funded by the U.S. Small Business Administration’s Federal and State Technology Partnership (FAST) program to assist companies in understanding and applying for SBIR awards. Assistance is common at non-FAST universities as well, such as grant-writing assistance and commercialization grants that have been offered by the University of Washington, as described by their former vice provost, Linden Rhoads in recent congressional testimony.
Many SBIR-university partnerships have been truly successful. Summaries of several Tibbetts Awards-winning companies that worked with universities are described below:
Bascom Hunter Technologies, Inc.
Bascom Hunter spun out of Princeton University in 2010, based on technology developed by Professor Dr. Paul Prucnal while at the university. Licensing Dr. Prucnal’s technology from Princeton, the company won its first SBIR award in 2011 to further develop its technology, leading to successful commercialization efforts backed by more than $15 million in SBIR Phase III funding. Since then, Bascom Hunter has also been a major sponsor of research at Louisiana State University, is a founding member of the Small Business Innovation Research Consortium (SBIRC), has secured $25 million in funded contracts, and employs 30 people. Read more.
ATA Engineering, Inc.
Founded by a group of 28 employees facing layoffs in 2000, ATA Engineering received its first SBIR award in 2002. Citing the access to and collaboration with government, industry, and university experts through the SBIR program, ATA has expanded its operations into new technology areas, provided professional development for more than 160 student co-ops and interns, and employs more than 170 people at seven locations. Read more.
Founder Dr. Jack Syage is a strong proponent of the SBIR program. With experience leveraging more than $117 million in SBIR Phase III support to bring multiple technologies to market, ImmunogenX recently won a new National Institutes of Health (NIH) Phase II award to conduct clinical trials for a therapeutic drug and diagnostic technology for celiac disease. ImmunogenX is supported by a team of world-renowned clinicians, scientists and advisors in celiac disease research, and is successfully running clinical trials in collaboration with the Mayo Clinic, Columbia University, and Stanford University. Read more.
More examples of SBIR company success stories can be found at SBIR.gov.
Resources to get started
The best way to work with a university varies depending on the institution’s rules and could even vary by department. The following resources provide more information about how to approach universities, or organizations that could help you identify the best institution for your needs.
- SBIR Tutorials. The tutorial on university partnering can help companies navigate the process of connecting with and working with universities and university-based researchers. The tutorial on state service providers can help educate companies on how to connect with and take advantage of state programs and services.
- Federal and State Technology (FAST) Partnership Program. Awardees of the Federal and State Technology (FAST) Partnership Program provide financial support, technical assistance, and mentoring to SBIR/STTR applicants and awardees. Technical assistance encourages applicants/awardees to transition from Phase I to II and commercialize technology developed through SBIR/STTR program funding.
- SBA Growth Accelerators. Growth Accelerator awardees are accelerators, incubators, and other entrepreneurial ecosystem models (e.g., co-working startup communities, shared tinker-spaces) that support the development of small businesses and startups in parts of the country where there are fewer conventional sources of capital (e.g., venture capital, other investors).
- Procurement Technical Assistance Center (PTAC). PTACs provide technical assistance – mostly free of charge – to businesses that want to sell products and services to federal, state, and/or local governments.
- Small Business Development Centers (SBDC). SBDCs provide aspiring and current small business owners a variety of free business consulting and low-cost training services including: business plan development, financial packaging and lending assistance, exporting and importing support, disaster recovery assistance, procurement and contracting aid, market research help, 8(a) program support, and healthcare guidance. SBDCs are hosted by leading universities and state economic development agencies, and funded in part through a partnership with SBA.
- SBA Regional Innovation Cluster (RIC). Cluster initiatives focus on growing small businesses in the most promising industry sectors across the country. Depending on the industries of focus, each cluster provides a unique set of services for small businesses, but at the core, each offer specialized small business counseling and mentoring.
- Minority Business Development Agency (MBDA) Business Centers (MBC). MBDA’s nationwide network of business centers helps minority business enterprises gain access to capital, contracts, and markets.
State and local governments and nonprofits also commonly offer assistance to companies interested in SBIR. Find local assistance: https://www.sbir.gov/local-assistance.
Additionally, the Association of University Technology Managers (AUTM) maintains a database of university technologies that are available for licensing. With more than 21,000 technologies listed to-date, the AUTM Innovation Marketplace (AIM) allows universities to automatically upload their available technologies, making it easy for corporations to access, free-of-charge, and identify potential university partners equipped with needed research capabilities.