Free Government Grants for Small Business

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					Government Grants
    SBIR funding for
 technology companies
                    Fluential Background
• Founded in 1998
• Developer of speech translation
  systems
• 15 employees
• > $7 million in grants & contracts
      – No VC funding
• Tech foundation has been built
      – Plus 20 applications in 5 languages
      – Military and hospitals




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          Fluential’s Grants & Contracts




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                              Objectives
• Overview of SBIR grants
• Describe Fluential’s approach
• Help you decide:
      – Are SBIR grants a potential source
        of funding for you?
• Answer your questions
• Point to other resources




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                                 SBIR Grants
• Small Business Innovation Research
      – $2.2 billion in 2006
      – To stimulate innovation & job creation
• Free money
      –   No repayment
      –   No equity dilution
      –   No board seat
      –   And you own the IP
           • Gov’t gets royalty-free license for its use
• Grants from $100K to $850K
• Can partner with universities
• Can have multiple grants at the
  same time

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                          SBIR Eligibility
• “Small business”
      – < 500 employees
• For profit
• ≥ 51% U.S. owned
• Located in U.S.
• Principal Investigator (PI)
  employed by business




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                     3 Phases of SBIR Funding
          Phase I
          • Feasibility study
          • Up to $100K*
          • 6-month award                   FAST-TRACK
          Phase II                          Combines Phase I
                                            & Phase II
          • Prototype development
          • Up to $750K*
          • 2-year award
          Phase II+
          • Funding for commercialization
          • Matching funds up to $500K*
            - Match investment or revenue

          * Differs by federal agency
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                                   11 Agencies
                           Each With Different Criteria

 Federal Agency                              Specific Topics   Flexible Topics
 - Dept. of Defense (DOD)                          
 - Dept. of Health & Human Services (HHS)                           
 - Nat’l Aeronautics & Space Admin. (NASA)         
 - Dept. of Energy (DOE)                                             
 - Nat’l Science Foundation (NSF)                                    
 - Dept. of Homeland Security (DHS)                
 - U.S. Dept. of Agriculture (USDA)                                  
 - Dept. of Commerce (DOC)                         
 - Dept. of Education (ED)                                          
 - Environmental Protection Agency (EPA)           
 - Dept. of Transportation (DOT)                   


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                 Lengthy Review Process
• Takes 6-12 months
• Agency reviews proposal
  (peer/internal)
• Proposals given score based on:
      – Quality
      – Responsiveness
      – Team Qualifications
• Proposals ranked by score
• Awards assigned by ranking
  until funding spent




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                    What are your chances?
•    A lot better than getting VC
•    10-20% of Phase I proposals funded
•    40-50% of Phase II funded
•    Your chances are better if:
      – PI & team are highly qualified
      – Concept is innovative & addresses
        specific topic of interest to agency
      – Innovation has strong commercial
        potential
      – Solving a hard technical problem
           • Only R&D
           • No sales, marketing, or manufacturing




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                         Fluential’s Approach
• View gov’t grants as R&D funding
      – Alternative to VC (could also supplement)
      – Not our long-term business model
• SBIR projects open doors for other contracts
      – e.g., $2.5M in DARPA contracts
• Create a portfolio of research projects
      –    Apply for many grants, not just one
      –    Write 8-10 proposals per year (win 3-4)
      –    Several projects at different stages
      –    Each project solves a different technical problem
• Don’t think of Phase I as only $100K
      – First revenue in longer stream that could
        total >$1M with Phase II and Phase II+
• Pursue only projects that support commercialization

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                             Other Resources
•   SBIR Gateway
      – Info. and links to every federal agency’s SBIR program
      – http://www.zyn.com/sbir/
•   NIST Advanced Technology Program
      – Non-SBIR grants up to $2M
      – Harder to get than SBIR
      – http://www.atp.nist.gov/
•    DARPA
      – Defense Advanced Research Projects Agency
      – http://www.darpa.mil/
•    HSARPA
      – Homeland Security Advanced Research Projects Agency
      – SBIR—http://www.sbir.dhs.gov/
      – Non-SBIR—http://www.hsarpabaa.com
•   FedBizOpps
      – All public federal government contracting opportunities
      – http://www.fedbizopps.gov/

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                               Thank You
• Contact info.
      – Jim Kimzey
        VP Strategy and Business Development


      – Fluential
        1153 Bordeaux, Suite 211
        Sunnyvale, CA 94089




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