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Demystifying Government and
Stimulus Funding for Your Startup
Presented by:
Jill Fishbein: Carr & Ferrell LLP
Mark Perutz: DBL Investors
September 9, 2009
U.S. Small Business Administration (SBA)
Regional Programs in California
• California Enterprise Zones Program
• City Development Agencies
• “Green” programs
Stimulus Package Funding/Federal Budget Overview
Case Studies
1. (redacted)
2. Medical Informatics
3. (redacted)
4. Energy Efficient Product
5. After School Education Center
Women-Owned Businesses
Definition:
• Must be at least 51% owned and controlled by a woman or women.
• Must be a US citizen or permanent resident.
Certification: (recommended, but not required)
1.) Non-government, non-profit organization certification
• The National Women’s Business Owners’ Corporation (NWBOC) – Women’s
Business Enterprise Certification Program - http://www.nwboc.org/section_apply
• Women's Business Enterprise National Council - http://www.wbenc.org
2.) Self Certification
Minority-Owned Businesses
Qualifications:
• “Small business” (independently owned and operated, organized for profit, and not
dominant in its field.)
• Owned and controlled by one or more socially and economically disadvantaged
individuals who are of good character and citizens of the United States
Application:
• http://www.sba.gov/aboutsba/sbaprograms/8abd/faqs/index.html
SBA-designated minority groups:
• Black Americans
• Hispanic Americans
• Native Americans (American Indians, Eskimos, Aleuts, and Native Hawaiians)
• Asian Pacific Americans
• Members of other groups designated by the SBA
SBA Section 7(a)
Guaranty Loan Program
Loan Providers:
Commercial lenders, not the government, who agree to meet the SBA
qualifications as outlined in the 7(a) Guaranty Loan program
Partial guaranty by the SBA to the lender:
Loan Parameters:
• 20% owners required to personally guarantee SBA loans
• SBA size standards, for-profit, able to demonstrate repayment
• Character considerations
• Maximum loan amount is $2,000,000
• Maximum maturity is generally 7 years
• Maximum interest rate for fixed rate loans of $50,000 or more is Prime Plus
2.25% if the maturity is less than 7 years, and Prime Plus 2.75% if the maturity is
7 years or more. (Variable rate loans may be pegged to either the lowest prime
rate or the SBA optional peg rate.)
SBA Section 7(a)
Loan Initiatives
2009 Section 7(a) Updates:
• The American Recovery and Reinvestment Act of 2009 set aside $375 million for the
SBA to guarantee up to 90% of certain loans and eliminate loan fees.
• SBA has used over 55% of the funds to date.
The August 24, 2009 Wall Street Journal “Six Ways to Speed
Up Loan Approval”:
• Be ready with the past 3 years' tax returns and current financial statements
• Choose an SBA-preferred lender
• Find a lender that fits with your business type
• Apply to a few lenders
• Offer more than the required 10% down payment to help approval
• Get help from a business advisor or volunteer professional affiliated with SCORE
Small Business Innovation
Research Grants
Benefits:
• No repayment
• No interest payments
• No equity rights
• Peer review – agency’s technical and scientific experts
• Validation to other investors
• Government contract advantage
• Billions of $ in program
Department of Defense. September 8 2009.
<http://www.acq.osd.mil/osbp/sbir/overview/index.htm>
Small Business Innovation
Research Grants
Phase I SBIR:
• Contract proposal is no more than 25 pages.
• Address area identified by the Agency
• Awards are competitive; reviewed by Agency’s technical and scientific experts
Phase II SBIR:
• Awards are based on Phase 1
results and technical & scientific
merit of Phase II proposal
• Consideration of commercial
application
Department of Defense. September 8 2009.
<http://www.acq.osd.mil/osbp/sbir/overview/index.htm>
Small Business Technology
Transfer Grants
Designed to join high technology, entrepreneurial start-up businesses with
innovative scientific and engineering ideas of universities and other
research institutes
• solve challenging scientific and engineering problems
• commercialization
• cooperative R&D projects – small business and research institutions
Department of Defense. September 8 2009.
<http://www.acq.osd.mil/osbp/sbir/overview/index.htm>
Regional Programs
In California
California Enterprise Zones Program:
Targets economically distressed areas throughout California.
42 designated Enterprise Zones in California (SF, SJ, Oakland, Richmond,
Watsonville, Salinas)
Enterprise Zone companies are eligible for substantial tax credits and benefits:
• Hiring Credits - Firms can earn up to $35,000 in state tax credits for each qualified
employee hired. (50% of the employee’s 1st year wages, 40% for the 2d year, and
30%, 20% and 10% over the remaining three years)
• Sales /Use tax credits on purchases of up to $20 million/year of qualified machinery
(up to $1.8MM/year);
• Up-front expensing (accelerated depreciation) of certain property (up to
$20,000/year);
• Unused tax credits can be applied to future tax years, stretching out the benefit of the
initial investment;
• Enterprise Zone companies can earn preference points on state contracts.
Regional Programs
In California (cont’d)
City Development Agencies
Economic Development Agencies (Oakland/OBDC, SF/Mayor’s Office)
• Small business loans from City or HUD funds for companies located in the city or
parts of the city, may have entry-level job creation requirement
Redevelopment Agencies (SF, SJ, Oakland, Pittsburg, Union City, etc…)
• Once redevelopment area is created all increases in property tax (“tax increment”) is
set aside for redevelopment: reduced rent, tenant improvements, loans, grants
“Green” Programs
Recycling Market Redevelopment Zones : low-interest loans to businesses that use materials
from the waste stream to manufacture their products and are located in one of 33 zones in
CA (Oakland/Berkeley, So. Alameda, Contra Costa, San Jose).
California Department of Conservation: $10MM in annual in Market Development and
Expansion Grants grants for companies that increase recycling rates.
California Energy Commission’s Research Development & Demonstration Division
distributes $83.5 million in grants and contracts for energy efficiency/renewable
energy/cleantech annually (formerly called PIER program).
American Recovery and
Reinvestment Act of 2009
Trillions of dollars to be circulated into the U.S. economy through:
• government grants
• spending
• tax incentives
• tax rebates
• social programs
Research and development projects and infrastructure projects:
• $59 billion allocated to health care
• $43 billion allocated to energy programs
• $111 billion allocated to infrastructure and science projects
Federal Budget
Process Overview
Source: Wall Street Journal
Case Studies
Case study 2
MEDICAL INFORMATICS
Register for Government Funding
The Product
Jim and George have designed microchips that can be attached to a
variety of tags worn or carried by patients; whether dog tags, medical
bracelets, car key fobs, etc. These microchips are designed to hold
healthcare data that can be scanned by medical personnel who can
then upload and read the patient’s medical history, thereby making
medical decisions based on the patient’s actual history. This microchip
can be designed to present information in a variety of formats that
interface with most hospital records information software and can be
attached to a variety of static devices.
Target Market
Those who benefit most from this innovation are patients and medical treatment personnel at local
hospitals and clinics. Additionally, this product will serve the members of our armed services and
veterans of all ages because it can be designed to sync perfectly with the Veterans Health Information
Systems and Technology Architecture (VistA) for use on dog tags and ID cards.
Goals
Our goal is to achieve funding for research and product development on device attachment standards
and synchronization methods for the variety of information systems and software already in use by the
general medical and government services community.
Register for
Government Funding
Step 1: Log On to www.Grants.gov
Step 2: Click “Get Registered”
Step 3: Register Organization
Register for
Government Funding
Registration Entails:
a) DUNS Number: via phone or online
b) CCR: Central Contractor Registration
c) User Name & Password
d) AOR Authorization
e) Track AOR Status
Case study 4
ENERGY EFFICIENT PRODUCTS
Sample of a Government Request for Information
or Request for Proposal
Components of
RFI and RFP
Agency
• Identifies which Government Agency is Sponsoring
• Identifies which Subdivision of the Agency is Sponsoring
Category & Solicitation ID
• Specific Scientific Area of Expertise
• Solicitation Identification
Description or Issue to be Resolved
• Usually a General Overview
Due Dates
• When Request was Initiated and the RFI/RFP Due Date
• Any Additional Dates Where Relevant Updates Were Made
Specific Request(s) for Information
• Any Special Instructions or Information Needed
Format Guidelines
• Guidelines and Format Change from Project to Project and Department to Department
• Must Adhere to All Requests
Submission Information
• Where to Send or to Whom to Send RFI/RFP
Components of
RFI and RFP
DEPARTMENT OF DEFENSE
(DEFENSE ADVANCED RESEARCH PROJECTS AGENCY (DARPA))
Novel Energy Storage Systems (NESS)
Solicitation Number: DARPA-SN-09-62)
The Defense Sciences Office (DSO) of the Defense Advanced Research Projects Agency (DARPA) is
seeking ideas that may support a new DARPA program to demonstrate innovative concepts and
technologies that dramatically increase the Department of Defense's (DoD's) technology for storage of
electrical energy. It has been well documented in briefings from both the Defense Science Board as
well as the Department of Energy that there exists a disparity in our country's energy storage
capabilities. The disparity occurs on two levels; storage devices that can deliver large amounts of
electrical power (namely capacitor technologies) only do so over short periods of time (less than
seconds); and storage devices that store larger amounts of electrical energy (namely battery
technologies) but in practice do not deliver large amounts of power in short bursts without it negatively
effecting their lifetime. Current materials and fabrication techniques have yet to facilitate a solution to
this energy storage problem.
Components of
RFI and RFP
Posted Date: August 24, 2009
Original Response Date: Sep 09, 2009 4:00 pm Eastern
Current Response Date: Sep 09, 2009 4:00 pm Eastern
Description: DARPA is interested in detailed submissions that provide new ideas on approaches to materials and
fabrication techniques used in energy storage devices. These storage devices must possess potential to radically
change the state-of-the-art with respect to responsiveness, specific power, and energy density. Ideas related to
advances of traditional technologies such as batteries, capacitors, and mechanical energy storage devices should
not be submitted.
Requested Information: DARPA appreciates responses from all capable and qualified sources including, but not
limited to, universities, university affiliated research centers, and private or public companies. To ensure that all
technically relevant aspects of the Request for Information (RFI) are fully addressed, technologies and capabilities
should target the following criterion:
1. Novelty: Of particular interest are novel materials and methods for high density energy storage. Intellectual property should
be clearly established. Specifically excluded from this RFI are iterative improvements on current energy storage
technologies and non-scalable technologies. Any ideas submitted should be revolutionary in approach, and submitters
should clearly indicate how their Novel Energy Storage System (NESS) radically shifts the traditional paradigms of energy
storage.
2. Capacity: Any NESS concepts submitted must display revolutionary improvements over state-of-the-art devices in both
specific power and energy density.
3. Efficiency: Any NESS concepts submitted must also address the underlying science, limitations, and the expected
performance. Primary data is strongly encouraged.
4. Resiliency: NESS concepts should have the ability to store energy in extreme environments with low losses and limited
effect to operational lifetime.
5. Response time: One of the key objectives of this RFI is to explore storage technologies that can provide power on demand
without detriment to operational lifetime or device capacity.
6. Market readiness: A goal of this RFI is to identify scalable NESS concepts for use in electronic systems at all levels from
the base to the soldier in the field. If available information describing a pathway to production is relevant then it should be
included. A risk analysis specific to the proposed concept including risk factors for both engineering and economical aspects
of the technology is also encouraged.
Components of
RFI and RFP
Instructions To Responders: When responding to this RFI, please include examples of current and previous work that have
enabled the technology. Experimental demonstration of NESS concepts, models, and/or information about currently licensed
products is of particular interest.
Acknowledged technological barriers that should be addressed include scientific development and optimization, scale-up and
manufacturing, limits on operational conditions, as well as expected device operational lifetime. An analysis of limiting factors such
as materials, chemistry, and/or engineering required for the proposed concept should be highlighted.
Respondents are encouraged to be as succinct as possible while at the same time providing actionable insight.
Format
Responses should adhere to the following formatting and outline instructions:
1. Written submission format specifications include 12 point font, single spaced, single-sided, and 8.5 by 11
inches paper, with 1-inch margins. All submissions must be electronic, adhere to the content formatting
described below and use one of the following file formats: Adobe PDF or Microsoft Word.
2. Cover Page (1-page)
a. Title
b. Organization
c. Responder’s technical and administrative points of contact (names, addresses, phone and fax numbers, and
email addresses)
3. Technical areas (up to 3-pages)
a. A discussion of the capability/challenge addressed (from your perspective)
b. A technical description of the energy storage system including but not limited to its novelty, scalability, and
limitations
c. Examples of success
d. Identify current data (if any)
e. Market readiness
Components of
RFI and RFP
Format (Continued)
4. References (1-page)
a. All references to previously published work should be contained
within this space.
5. Additionally, all interested parties should submit a Microsoft PowerPoint slide presentation, not to
exceed 3 slides, addressing the technical aspects of the response. Two slides are to be used for a
bulleted summarization of the information presented in the written submission. Figures not included
in the written submission may be inserted into the space available on these slides. The third slide is
to be a ‘penta-chart’ summarization of the technology (the ‘penta chart’ should follow the format
given on WEBSITE). The purpose of this slide is to visually and succinctly indicate the new insights
motivating the proposed effort, the main objectives, the underlying technical mechanisms,
fundamental assumptions and limitations, key innovations, expected impact, and other unique
aspects of the proposal.
Submission:
Responses to this RFI should be submitted to DARPA-SN-09-62@darpa.mil. Please refer to the “NESS
RFI” in all correspondence. All technical and administrative correspondence and questions regarding this
announcement should also be submitted to the same email address.
Additional Information:
Please see http://www.darpa.mil/dso/solicitations/sn09-62.htm
Case study 5
AFTERSCHOOL EDUCATION CENTER
California State Grants
California State Grants
www.ca.gov/Grants.html provides links by topics and subtopics to
various agencies that offer State Grants
California State Grants
Link to California Department of Education – select “Search CDE Funding”
California State Grants
Searching CDE Funding
Search applicable grant
California State Grants
Review all eligibility requirements for particular grant.
Review funding information
and important dates.
California State Grants
Application link will connect you to the RFP.
Request for Proposals
California State Grants
RFP describes detailed steps to apply for this grant
California State Grants
Submission: Intent to submit proposal form
California State Grants
Submission: Conflict of Interest and Confidentiality Statement
California State Grants
Submission: Confidentiality and Non Disclosure Agreement
California State Grants
Submission: Department of Education Computer Security Policy
Small Business Administration
San Francisco District Office
455 Market Street, 6th Floor
San Francisco, CA 94105-2420
(415) 744-6820
Thank you!
