The SBIR Coach's Playbook ®

It's Official - SBIR Reauthorized with the signing of HR.1540

2012-01-02T08:26:00.006-06:00

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On New Year's Eve, just as 2011 was running out, President Obama signed HR.1540, the bill that contains the SBIR reauthorization provisions, into law. Whew! Not that I thought he wouldn't, but...

Here's the White House Press Release on the signing: http://www.whitehouse.gov/the-press-office/2011/12/31/statement-president-hr-1540 . SBIR wasn't mentioned, of course. Sigh...

I do want to read the bill that was signed, just to make sure no Federal Agency sneakily weaseled out of their SBIR obligation. Not that I'd think that any of them would be so callous as to do that, but...

The next step if for the SBA to revise the Policy Directive to incorporate the changes into policies for the Agencies to administer. We're going to help them with that. They have 180 days to get the revision done, but we'd like to see it done a whole lot faster - especially since some of the provisions (e.g., eligibility) must be implemented within 120 days!!

The coordination of that help will be through the Small Business Technology Council (SBTC), an arm of the National Small Business Association (NSBA). Jere Glover, Executive Director of the SBTC, will be at the point. White papers will be submitted to each Agency with suggestions for productive implementation.

If you'd like to get involved, especially with regard to a particular Agency with whom you do (or would like to do) business, join one of the committees being formed by (a) joining the SBTC, and (b) contacting Alec Orban (alec@sbtc.org) at the SBTC and letting him know of your interest.

[Note: it's not necessary to join the SBTC to get involved, but it's the right thing to do. They are the voice of the SBIR advocacy in DC. Please support them.]

I will be making the rounds on the lecture circuit during 2012, talking about capitalizing on non-dilutive funding opportunities via strategic implementation of the new SBIR and STTR laws and policies. If you'd like to arrange to have me speak to your organization, please contact Brenda Keefer (info@willowmistpro.com) at Willow Mist Professional Services to discuss details.

My SBIR Coach's Newsletters for 2012 will focus on the new SBIR/STTR Laws and Policies, so be sure to subscribe. They're free, of course.

Well, at this point, all that's left is to wish you a ...

Fred Patterson - The SBIR Coach®

SBIR Reauthorization is VERY close - But don't light that cigar yet.

2011-12-13T04:44:00.012-06:00

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[UPDATE: On Dec 15th, Congress approved the NDAA Bill (H.R.1540) and sent it to President Obama for signature. See SBIRreauthorization.com for that update. As we saw in what happened to the NIH's ARRA stimulus money ("Hidden in the Fine Print"), strange things can happen to bills coming out of Conference Committee and going for signature. So pardon my hesitation to celebrate until the ink is dry and we can examine what was signed. Once we've verified that SBIR has REALLY been reauthorized as heralded, I'll publish a new commentary.]

The SBIR Reauthorization fight is almost over. The House Small Business Committee has FINALLY decided to compromise in good faith. SBIR really does have a good chance to be reauthorized in the next few days without having been destroyed in the process.

Sam Graves (R-MO), the Chairman of the House Small Business Committee, and Ralph Hall (R-TX), Chairman of the House Science, Space and Technology Committee, issued a Press Release on December 12th announcing that a deal had been struck with the Senate. Here's a link to that PR: http://smallbusiness.house.gov/News/DocumentSingle.aspx?DocumentID=272194.

However - and this is a BIG HOWEVER - the fact that a deal has been struck, does not mean a bill has been passed! We're not there yet! As we've seen in the past when we were on the brink of victory, strange things can and do happen to slam-dunk bills.

Your best source for the true skinny is to subscribe to Rick Shindell's SBIR Insider: SUBSCRIBE. Here are excerpts from the Issue he published last evening (Dec 12th):

Dear SBIR Insider,

We have some very encouraging news for you on the status of SBIR reauthorization, but contrary to what you may have read, SBIR has NOT been reauthorized.

We have been deluged with calls and emails tonight by those who said they read in another newsletter that SBIR was reauthorized. Although a deal was struck this afternoon, SBIR reauthorization has not yet happened, but we're closer than we've ever been in this iteration of the reauthorization process.

An agreement between the Senate and House on SBIR/STTR reauthorization has been reached. Reauthorization is in the form of negotiated modifications to an amendment offered to the Senate's version of the National Defense Authorization Act for 2012 (NDAA), by Senator Mary Landrieu (D-LA), chair of the Senate Committee on Small Business & Entrepreneurship.

Because this agreement is part of the much larger NDAA, it was asked that details be kept to a minimum until the entire NDAA conference agreement is forthcoming (hopefully tomorrow, but soon).

A few details we can present include:

· Authorization for 6 years (through 2017)

· Majority ownership by VC, private equity and hedge funds allowed up to 25% for NIH, DOE and NSF, and up to 15% for the others.

· Increasing the SBIR allocation from 2.5 to 3.2 percent and the STTR allocation from .3 percent to .45 percent incrementally over the 6 years of reauthorization.

· Allows 3% of SBIR funds for the agencies to use for administration, outreach, and increasing participation from "have not" states, and minorities.

· Does not include House section 505, limiting awards to companies, but develops guidelines to measure success of a firm's participation.

· Does allow (at an agency's discretion) skipping of phase I (limited to DoD, NIH, and ED).

We will provide the details once it all comes into focus.

Rick Shindell
SBIR Gateway
Zyn Systems
www.zyn.com/sbir

So, we still have a sprint to the finish to go. Stay with us by monitoring Rick's SBIR Insider and our SBIR reauthorization update page: www.SBIRreauthorization.com.

On a personal note, I've been rather silent on this forum for a while, due to some very pressing health issues concerning my wife, Kay, and myself.

She's been courageously fighting ovarian cancer for many years and we're now in the end game with that. Overtime, even - month nine of home-hospice and I'm her primary care-giver. (Note: Median time of a patient in hospice care is less than one month!) She asked me yesterday what I wanted for Christmas, and I replied that she'd already given me the best gift she ever could - having her with me for another Christmas.

Then just since Labor Day, I began to fight my own personal Reauthorization Battle: Throat cancer. Stage IV out of nowhere. I've already had some surgery, and am currently in chemotherapy. I'm writing a Journal of my experiences on this journey via CaringBridge.org - a wonderful website deserving of support. Read my Journal and keep up with my progress on www.CaringBridge.org/visit/FredPatterson/. Please do leave me notes there. They lift my spirits.

I see each course of therapy with this fight as a Continuing Resolution on my life's reauthorization. To stretch a metaphor, God signs the Bills on Fred's Life that get passed. Jesus is my Committee Chairman, and His Plan will be what gets passed to the Heavenly Desk for signature. If you'd like to offer testimony to His Committee, no invitation is necessary, and I understand He accepts knee-mail 24/7. I'm not privy to the negotiations, but can only pray that I've done what He expected me to as I've made my journey through this life. (Thank goodness Nydia isn't in that loop. God only knows what she'd expect of me!)

I'm continuing to work as best I can. Scaling back a bit while taking treatments, of course, but serving my long-term clients as usual, and even taking on some new clients with truly innovative game-changing technologies having a dyn-o-mite Business Model to support their eventual commercialization. I don't have to work so hard to make them competitive!

Thanks to all of y'all who responded to the call for letters supporting this SBIR reauthorization compromise. We did make a difference.

We wish you a very Merry Christmas and a Happy Hanukkah. And, of course, our very best wishes for a Happy New Year.

Fred and Kay Patterson
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SBIR LIVES, despite Nydia's best efforts to kill it!

2011-06-01T05:43:00.011-05:00

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The current incarnation of SBIR has more lives than a cat. Twelve and counting. (Details HERE) This SBIR CR life segment will be four months long. Then what? Will small business innovation be sold out to the bigger better funded entities?

If Nydia has her way it will. She's so dedicated to that sell out that she even campaigned to kill SBIR rather than continue it as is. Yes, the Ranking Member of the House Small Business Committee sent out a Dear Colleague letter to her fellow Democrats in the House urging a NO vote on S.1082. She wanted SBIR to die, rather than continue "as is" to allow open debate.

She even addressed the House at the time the vote was called, and appealed for its defeat. But in that appeal, she carefully never mentioned that it was SBIR she was killing. Very clever Nydia!

Don't believe me? Here's the proof - a YouTube video of her calling for S.1082's defeat:

http://www.youtube.com/watch?v=uxH12E1fuZk

Then she called for a recorded vote, and only 33 NO votes were recorded!

THANK YOU NYDIA! Now we know who needs remedial education.

Here's the list of those who voted NO:

Is your Congressional representative on this list? If so, YOU have work to do. The SBTC, SBBC and others will be providing materials to ensure that when the actual SBIR Reauthorization Bill is passed, it improves the Program, not destroys it.

Watch SBIRreauthorization.com for updates and information you can use to educate your Congressional Representatives and Senators. The current posting there is a detail map and demographics on the recorded vote on S.1082. Check it out.

If you'd like to keep up with things in an active way, join the SBIR Advocacy. We have a Google-Group. Here's the link to join: http://groups.google.com/group/sbir-advocacy/subscribe?hl=en¬e=1

I've been rather silent in the past few months in this column. But expect some noise from me in the coming months. I don't know about you, but I've about had it with the political posturing. Huggem-Muggem must stop!
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SBIR Still Alive - Obama Misses Opportunity

2011-01-27T06:55:00.004-06:00

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We're still alive! The Congress approved the 10th Continuing Resolution (H.R. 366) in this now 28-month-long drama on SBIR Reauthorization, and SBIR, STTR, and the DOD's Commercialization Pilot Program (CPP) have all been extended four more months, until May 31st.

Hopefully, more of FY2011's SBIR funds will be released soon to the Agencies, and contract and grant processing can resume in those Agencies who have had to suspend those activities after their money for this ran out.

I watched the President's State of the Union address on Tuesday evening. For a moment my heart began to race with anticipation. Here's (verbatim) what he was saying:

"Now, the true engine of job creation in this country will always be America's businesses. (Applause.) But government can create the conditions necessary for businesses to expand and hire more workers.

We should start where most new jobs do -- in small businesses, companies that begin when -- (applause) -- companies that begin when an entrepreneur -- when an entrepreneur takes a chance on a dream, or a worker decides it's time she became her own boss. Through sheer grit and determination, these companies have weathered the recession and they're ready to grow. But when you talk to small business owners in places like Allentown, Pennsylvania, or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they're mostly lending to bigger companies. Financing remains difficult for small business owners across the country, even those that are making a profit.

So tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. (Applause.) I'm also proposing a new small business tax credit -- one that will go to over one million small businesses who hire new workers or raise wages. (Applause.) While we're at it, let's also eliminate all capital gains taxes on small business investment, and provide a tax incentive for all large businesses and all small businesses to invest in new plants and equipment. (Applause.) "

He then moved on to another subject, and my heart rate slowly went back to normal. RATZ! What I REALLY wanted to hear and wished he would have said next was,

“And, while we’re at it, let’s expand and improve the successful Small Business Innovation Research Program, to give those entrepreneurs who have good ideas the opportunity to build a company and create high-paying jobs, by asking them for more proposals on how to solve some of the toughest technological problems our Government Agencies face, and then funding the best of those proposals. And the good news is that this doesn’t take any new spending. SBIR is included as a portion of those R&D budgets already.”

Betcha that would have gotten some bi-partisan applause and a standing ovation too!

Unfortunately, he didn't say that. What a missed opportunity!

But he did give us precisely the platform we needed to drive the message home to our elected Representatives.

So that’s got to be our message. Let’s get it out there! The Small Business Technology Council (SBTC) will be providing guidance on fact sheets and letters to send. The NSBA's "capwiz" system will help you with sending it. Plan to send a letter to your House District's Representative, your two Senators, and to every member of the Small Business Committees in the House and Senate.

We'll have full support for the letters, contact info for all members of the 112th Congress, and links to the systems on www.SBIRreauthorization.com, so be sure to monitor that website.

So, here we go again. Maybe this time they'll actually get it done. I don't know about you, but, for me, this continually being on life support is exhausting!
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Camouflage! An Innovative but Crappy Use for SBIR Reauthorization

2010-12-20T05:39:00.003-06:00

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Just when you thought you’d seen everything. The lengths our limping quackers will go to make their Lame Duck session productive is absolutely stunning. But you’ve got to give them credit for innovation.

I use GovTrack to keep me informed of activities on bills in process with regard to SBIR. One I was tracking was H.R.2965 – the House version of SBIR Reauthorization. When it showed action last week, I eagerly went to see what was up. The Title hadn’t changed. But the bill’s Text had changed – to the repeal of “Don’t Ask, Don’t Tell”! Huh?

I made some quick inquiries, and was given a quick brief on the tactic being employed – using H.R.2965 as camouflage because it was far enough along in the process to avoid having to be further discussed by either chamber and could be immediately voted upon. The title of the bill wasn’t changed, just the text. We know our legislators don’t read the bills they vote on. It was to be a sneak attack. And, it worked.

I was asked to not rattle the cage yet, as some behind-the-scenes action was simultaneously happening with the Senate’s version (S.1233) along with discussions with BIO that just might get things settled, and we were to “stay out of the way”. OK. I’m a good soldier. I put the “pen” down and waited.

Last night Rick Shindell published an SBIR Insider about this monkey business. As they used to say: READ ALL ABOUT IT: SBIR Insider of December 19, 2010. The cat’s out of the bag, so I got out the pen.

I know this is how things get done in Washington, but I don’t have to like it. Resorting to camouflage and subterfuge to sneak things by is just wrong. I don’t care what the issue is. Not that this is anything new to us -- the NIH's sneaky ARRA SBIR exclusion is a case in point.

Frankly, I’m fed up with political posturing, pouting, pontificating, and prevaricating. No one tells the truth about anything. They tell the politically expedient story and use perception management to make it seem like the truth.

Yes, I have mixed emotions. On the one hand I’m delighted to see the guts ripped out of H.R.2965. It was a bad bill. But I know one thing for sure. The deliberate use of SBIR’s name for unrelated political expediency was distasteful. The crappy tactic of not changing the title when the bill has been totally changed should be illegal, but the Congress makes its own rules, and holds itself to a different standard, both legal and ethical.

I guess I wouldn’t make a good politician. I know how to play the SBIR game, and I think I’ve played it well. But this game is another story. To have used a small business bill in this way is flat out dishonest. No one asked me, but I’m telling!

Now what? Will this be another instance of Huggem-Muggem? Now that they've used us for their own nefarious purposes, will SBIR be summarily cast aside and handed off to the next Congress to start over?

Or will the Senate, the House, BIO, NVCA, SBTC, and the NSBA all agree to do what's best for small business and emerge yet this session with an SBIR Reauthorization compromise we can all live with?

Will the egos of our legislators, especially those in the House, be soothed to where they’ll act responsibly instead of selfishly? Will Nydia put her purse away? Will pigs fly?

Don't let my disgust with the process and those who would use it for their own selfish purposes make you think I've given up. I'm basically an optimist. And a realist.

Maybe pigs really will fly. Stay tuned.
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Stakeholder Value from SBIR? Think Assets not Revenues!

2010-12-08T11:08:00.007-06:00

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A client recently asked me to help him with a presentation that involved a chart that depicted the value derived by “stakeholders” in an SBIR project. The chart only considered the distribution of the funds provided by the grant. That made me think about the whole issue of stakeholder value in SBIR-funded ventures.

Unfortunately, for most awardees, SBIR has little to do with market share or even market definition. It’s basically a Technology-Push facilitator. The Agencies define technology priorities or projects they’d like done. The small businesses propose a project to develop the technology to proof of concept. That’s not the same thing as a product. And most Agencies would never be the customer and buy the result of an SBIR project. They’re strictly being seed investors.

Even for DOD, who does buy things for deployment, the resulting SBIR-developed technology innovation is not usable until it’s integrated into a solution they can actually deploy. They don’t buy technology, they buy complete and fieldable systems. That frequently requires integration and collaboration with a Prime contractor. The DOD market is what the Prime serves. It’s up to the small business to figure out who to team with to enable that integration. Their market is not the final customer of the solution – it’s the Prime. Their challenge is how to make money from what gets developed as a result of the SBIR funding.

A grant revenue distribution diagram depicts how the money invested in the SBIR project by the Agency gets divided up among the project’s participants. That’s not what’s important. It’s all consumed by the project, so it isn’t an asset. What’s more, it shouldn’t be looked at as strictly working capital. Yes, it pays the bills, but only for this project.

A company that looks at its SBIR awards as invested capital, and considers its return on invested capital (ROIC) is more appropriately considering the asset value of the money received.

What’s important from an asset perspective is how the results of the project turn into a strategic advantage for capturing market share. That rarely has anything to do with the Federal Agency that provided the SBIR seed funding. It has to do with the strength of the intellectual property position, and the ability of the company to make the deals necessary to leverage that IP position into cash. Figuring out with whom to make the deals and how that deal is structured is where the value lies. In the final analysis that has virtually nothing to do with how the SBIR award revenues were distributed.

Unfortunately, the SBIR Program was never designed to even deal with this. It was strictly to be a way to give a small technology business a fair chance to get the seed funding. As SBIR was conceived by Roland Tibbetts back in the late ‘70s and implemented in the early ’80s, commercialization was NOT intended to be an Agency concern. While it did successfully open the door to small businesses, not including direct support for end-use deployment was probably short sighted, as, arguably, there’s no other good way to determine return on investment (ROI).

The current reauthorization legislation is attempting to remedy this by providing some requirements for the agencies to fund Phase III and gather data on what SBIR funded companies do with the technology that gets developed. As it currently stands, virtually no consistent or reliable data on SBIR commercialization activities exists, other than ad hoc anecdotal reports.

Marketing and market research of technologies which have some IP protection are clearly keys to figuring out how to make money from what’s been developed. Business success is most quickly (and sometimes ONLY) achieved when selling to a Market-Pull. But, the Agencies are quite specific about allowable costs in SBIR projects, and marketing, market research, and patent prosecution are explicitly NOT allowed to be included in SBIR budgets.

This is a classic Catch-22. The ROI of an SBIR project is measured on what money the company can make from selling the developed technology, but they’re not allowed to use SBIR money to figure out how to do that. What other money do they have? And the reauthorization’s inclusion of required Agency commercialization support may not be able to overcome this without significant paradigm modifications to what the government allows its money to be used for, as it’s the Federal Acquisition Regulations that define allowability of costs.

So, for “stakeholders” in an SBIR related venture, there’s nothing to be gleaned by simply looking at award revenue distribution.

Who are the “stakeholders” in a venture anyhow? I see them as everyone who has something to gain or lose by associating with the venture. This includes the venture’s founders, owners, employees, suppliers (of all goods and services including consultants), investors (who may or may not be owners), subcontractors, and customers. It may also include those who are building a “culture” (e.g., a professional association) where the venture plays a supportive role.

A “Stakeholder Value from SBIR” chart is, therefore, much more complex than a simple revenue from the grant depiction.

Sadly, there are many “SBIR companies” out there incapable of thinking strategically from a market-driven perspective. They do nothing more than win SBIR awards, proudly looking at the Phase I/II grant/contract revenue as their “bottom line” end game. These “lifestyle companies” (some call them "SBIR Mills") are, for the most part, not sustainable in the long term and doomed to eventual failure. They don’t start out that way, but find that making that transition to commercialization is not automatic.

Phase III is not an entitlement. It requires an entirely different focus and talent for execution not attainable by the founders or technically oriented staff. So, to survive, they stay in their comfort zone – winning SBIR awards. For them, ROI is moot.

Value is characterized by, among other things, ROI expectations. Who has them? How do we measure them for the companies and their stakeholders – including their investors? For the Agencies? For the Taxpayer? Lots of questions.

How we frame the answers may determine whether the SBIR program flourishes and grows as an innovation driver, languishes as an “entitlement”, or even survives. Any thoughts?
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Let’s End “Huggem-Muggem”!

2010-11-04T09:34:00.002-05:00

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An open letter to the Republican House Leadership:

Legendary SBIR advocate, Milt Stewart, said it best in observing how Congress treats small business, “In public they hug them, in private they mug them!” I call this the Huggem-Muggem syndrome.

As the House of Representatives changes leadership, and with Republicans once again controlling Committee Chairmanships, perhaps we can get the legislative agenda changed back to enabling free market growth. Crucial to this will be what policies are driving enacted legislation that truly enables small businesses to fulfill their historical position of driving the innovation economy and making major contributions to US economic growth. Unfortunately, small business currently gets Huggem-Muggem: lots of lip service but very little productive legislative action that facilitates their creation of non-government jobs.

The new Chairmanship of the House Small Business Committee will be key to successfully fulfilling that job-creation goal. The incumbent, Nydia Velazquez (D-NY), has steadfastly blocked all efforts to openly debate many SBA initiatives, including the Small Business Innovation Research (SBIR) Program before her committee. Instead she has openly demeaned the small businesses she is supposed to support in favor of advancing the agendas of larger special interests which fund her re-election campaigns. Unfortunately, the heir apparent to the SBC Chair, Ranking Member Sam Graves (R-MO), has, time and time again, supported her outrageous behavior. Lots of Muggem without any Huggem!

Regarding the very successful 28 year-old SBIR Program, which has languished with Continuing Resolutions for two years due to Velazquez’s refusal to consider the Senate’s reasonable compromise to the differences between Senate and House versions of a reauthorization bill, having a House SBC Chairman who will take small business interests into consideration is of extreme importance. Please exert whatever influence you can to ensure that this happens.

SBIR has enjoyed considerable bi-partisan support over the years, and frankly, some of its most faithful supporters have been Democrats. Passing an SBIR Reauthorization bill acceptable to all sides of the issues is certainly possible. Just think of the positive message this will send to the country. All it takes is the willingness of both sides to be reasonable.

As it stands at the moment under the current CR, the SBIR Program will expire at the end of January, 2011. While it’s not impossible that a compromise SBIR Reauthorization bill could be approved in the upcoming Lame Duck session, it’s very unlikely that will occur. What must be prevented is Lame Duck SBC Chair Velazquez getting her way, performing another Muggem, and sneaking the current House version into law against, among other things, the will of the Senate.

I would be pleased to fully brief any House Member and his or her legislative aides on the issues at play with SBIR. One source for information is the website www.SBIRreauthorization.com. Others are the Small Business Technology Council (www.SBTC.org), the SBIR Insider (www.zyn.com/sbir/insider/) and my SBIR Coach’s Playbook opinion column (www.SBIRplaybook.com).

Thanks for paying attention to this. With new leadership and the proper resolve, let’s make ending Small Business “Huggem-Muggem” syndrome a top priority for the 112th Congress! Please!
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Velazquez Caves Under Pressure -- SBIR Extended

2010-09-29T04:06:00.003-05:00

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We did it! Hundreds of calls and letters produced an overwhelming level of bipartisan peer pressure that even the most stubborn Committee Chair couldn't stand up against.

A special issue of Rick Shindell's Insider, written from the scene of the almost crime, reports on some of the details:

HOUSE PASSES SBIR/STTR/CPP EXTENSION THROUGH JANUARY 31, 2011

Borrowing the title of a song from My Fair Lady, "You Did It!" There was thunder on Capitol Hill today as hundreds of you responded to an emergency call to action (from many people and organizations) to save the SBIR program from lapsing, and that you did it!

Around 7:00pm this evening, Nydia Velazquez under pressure from her peers and the House leadership, accepted the Senate's SBIR and SBA extender bill, she and moved to suspend the rules to pass S.3839 without amendments. That has now happened and the SBIR program will be extended through January 31, 2011, pending signature of the President (virtually automatic), who supports the bill.

This is the 9th continuing resolution for SBIR, which in and of itself is an outrage, but perhaps Velazquez & Day are now wounded and certainly embarrassed, having been rolled over by the House leadership twice in as many weeks. The Senate has worked strenuously in bipartisan fashion to construct a compromise that Nydia & Day would accept, but they showed little interest.

We will provide a postmortem of this escapade in a future issue to show how close we came to a programmatic lapse. Your voices played a major role in getting the support to overrule Velazquez.

Nowhere were the cries for passing S.3839 stronger than from the great state of Massachusetts. Not only are they the second largest SBIR award winning state, but also the most organized. To that end, two of their congressionals played major roles in this victory, Ed Markey (D-MA) and Niki Tsongas (D-MA). Tsongas wrote a powerful "Dear Colleague" letter (signed by supporters) that truly made a difference. There are many more heros and we'll cover that next week.

So, we can stop holding our collective breath for a little while, but there's much to do. Rick continues:

WHAT'S NEXT

This fight is far from over, but the tide is turning. The big challenge for you is to get out and educate the candidates running for election. Do it not only for the candidate of your choice, but to the opposition as well. Attend their rallies, talk to their staff, and to the press. Undoubtedly there will be many new freshman congressmen and senators coming in to the next congress and you'll want them to know about the importance of the SBIR/STTR programs to your business and the economy. Also, step up to the plate and publicly thank those who have supported your programs, and don't be afraid to criticize those who didn't.

So thanks to all of you who jumped on this and turned around the hostage situation with a favorable outcome.

Jere Glover's Small Business Technology Council (SBTC) has promised to provide some good educational information for us to use in this educational effort. I urge you to please join the SBTC and help support Jere and the others who volunteer their time for SBIR advocacy. If you're an SBIR supporter, it's the right thing to do.
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Velazquez Holding SBIR Hostage for Lame Duck Ploy

2010-09-28T06:35:00.006-05:00

[UPDATE 9/29: Nydia Caved Under Pressure!
Read this and then click HERE for the update.]
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Incredible! And I wish I could say unbelievable! But, sadly, I'm not really surprised.

The illustrious Chairlady of the House Small Business Committee, Nydia Velazquez (D-NY), evidently holds herself above the will of both the Senate and the House. Is this a manifestation of self-importance (with a touch of petulance) or just selfish personal pocket-book protection? Or maybe both. I have my opinion, but you can draw your own conclusions. (Rumor has it she was recently seen shopping at Macy's for a bigger pocket-book.)

In an obvious ploy to sneak into law her provisions for opening up the SBIR program to unrestricted VC controlled company access to these funds, with jumbo awards to boot, she is defying the will of the Senate and many of her own Party in the House to get her way. The intent is to use the post-election Lame Duck session to tack her version of SBIR Reauthorization onto otherwise untouchable emergency legislation.

In his usual inimitable and eloquent style, Rick Shindell blew the whistle on this in his SBIR Insider of September 27:

SBIR/STTR/CPP EXPIRATION LOOMS

The SBIR/STTR/CPP now appears likely to expire on Thursday night, September 30. Some will deny it but here's what's happening.

Allegedly the Senate and House were close to a compromise complete with an 8 year reauthorization of SBIR/STTR/CPP but each time it goes back to the House (Nydia & Day), they change the VC language to masquerade 100% VC involvement as a compromise.

Because time is so short, the Senate passed a bill (S.3839) to simply extend SBIR/STTR/CPP through January 31, 2011. The House was going to pass it on Wednesday with the President signing Thursday. However, the word on the street is that Nydia Velazquez, chair of the House Small Business Committee, and her illustrious second, Michael Day, are rejecting the bill and are poised to let SBIR expire if necessary, at least in the short term.

It seems that Velazquez's hope is to move the SBIR reauthorization into the lame duck session and incorporate all her Wall Street investors' 100% non-compromise VC ownership and jumbo award support into a must pass, end of the year omnibus bill that can't be touched by her detractors.

This sounds like a script for TV, but several years ago we had a similar year end omnibus situation involving Nydia (as ranking member) and Sam Graves (subcommittee chair) and BIO/NVCA, but the main difference was that the small business committee chair was Donald Manzullo who nipped it in the bud. In our scenario today we have to look to the House leadership to do it, but it will take your involvement.

Many senior people in the democratic party called for the House to support the Senate compromise bill H.R. 2965, but Nydia ignored those calls, as did Jason Altmire, the creator of this infamous Altmire Quagmire. Now Nydia's really "miffed" because last week she tried to "scrub" H.R.5297, the Small Business Jobs Act of 2010, but the Obama administration and Speaker Pelosi rolled her over and passed it.

Rick includes a Call To Action to marshal support to prevent this Velazquez ploy from succeeding. You can read about it on the SBIR Insider itself, or on www.SBIRreauthorization.com.

Rick concludes his comments with a discussion of what happens if SBIR lapses, even for a short time:

Theoretically those projects (grants and contracts) that are already in place should be okay, but some not. All new unsigned agreements would stop. Agency comptrollers may start adjusting their budgets to put the overall 2.8% SBIR/STTR back into their own research pools. Administrative funding for SBIR could be severely cut back. Remember, all of your grants and contracts are "subject to the availability of funding."

On the other hand, SBIR can be voluntary, so some agencies may choose to keep their SBIR doors open, hoping for, or expecting the reinstatement of the program.

I agree with Rick. For SBIR to lapse, even for a short time, is bad for you and the agencies.

Please join our Call to Action and stop Nydia in her tracks.

REMIND EVERYONE YOU CONTACT THAT THEIR INACTION IN LETTING A SMALL BUSINESS PROGRAM DIE WILL NOT PLAY WELL IN THEIR RE-ELECTION CHANCES!

Monitor what happens on www.SBIRreauthorization.com.
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Re-inventing SBIR?

2010-09-22T08:45:00.010-05:00

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They've been meeting for almost a year with good intent: make SBIR more "effective and efficient". They're calling it SBIR 2.0 - borrowing on the Web 2.0 lexicon that heralded the shift from passive viewing of web content to active interaction among all elements of the web community (from content creators to content users) in a collaborative fashion.

Don't be fooled. It's not the same thing. Not even close. They're talking the talk. But not walking the walk.

Collaboration? Among newbie Agency SBIR Directors (the content creators) - maybe. Are SBIR funded companies (the content users) involved? Nope. Were past and retired SBIR Program Directors consulted? Nope. Were SBIR's founders consulted? Nope. (I'm certainly not in the loop -- not that I should be, although I do have ideas that could have merit -- so if some of the "Nopes" are erroneous, I apologize. But I bet the Nopes are pretty accurate.)

The SBIR 2.0 effort is being spearheaded by Sean Greene, the SBA's Associate Administrator for Investment and Special Advisor for Innovation. (Don'tcha just love government titles?) He's a good guy, a true friend to SBIR, and, as I said, well intentioned. But the naivete here is disturbing.

Here's a quick outline of what's included in the SBA's SBIR 2.0 initiative:

Simplification and Streamlining
- Shortening the contract/grant initiation period after award
- Building a web portal to search for available open topics
- Clarify and simplify SBIR Data Rights
Shared Best Practices
- Expanding bridge financing programs (between Phases)
- Expanding SBIR to facilitate tech transfer (ala NIST)
- Issuing joint agency solicitations
Better Performance Management
- Implement common performance metrics across agencies
- Share performance data publicly

Ambitious for sure! It would be marvelous to get all of that to work. But, folks, it ain't gonna happen quickly. Some aspects may not happen at all. The challenges are daunting. Some of the issues have been debated for years without consensus!

Every one of the agencies can improve the efficiency of project initiation after award. All it takes is money allocated to pay for administration. They haven't got any for this. Current SBIR law doesn't allow use of SBIR apportioned funds for admin. Unfortunately, last I knew, SBIR reauthorization which may fix that provision, hasn't happened yet.

And, at least for DOD, the SBIR Program Managers have NO CLOUT WHATEVER with component contracting authorities, who completely control the contract initiation process. I've seen contracting delays of as much as two YEARS! And, if they did have some clout, the current Army default of Phase I payments every two or three months (instead of monthly) wouldn't be the practice. Can you spell "cash flow"?

A "one-stop-shop" portal with a topic search feature? Gee, don't we already have one? It's called The SBIR Gateway. Not a penny of government money funds it, by the way. The "official" SBIR website (SBIR.gov) certainly could use some work - and a topic search engine - but why waste taxpayer money re-creating something that already works? Or is it simply a control issue?

Getting agencies to work together for improved SBIR efficiency? Don't make me laugh. The agencies are too different and too bureaucratically rigid to make any "one style fits all" approach work. Just the difference in competition compliance requirements between contracting and granting agencies alone makes the whole effort quite unlikely.

Clarifying SBIR Data Rights? PLEASE DO! But this involves getting lawyers to agree. Good luck with that. Ron Cooper, another good guy from the SBA, is at the point for this. If you have ideas, he'd like to hear them.

They're trying a working-together experiment - a five-agency (NIH, DARPA, DHS, NSF, and USDA) joint solicitation on Robotics. Just announced. Here's the info: http://grants.nih.gov/grants/guide/pa-files/PAR-10-279.html. Warning: Take two aspirin before reading, and call me in the morning. Heaven help us, the NIH SBIR application system will be used to collect all five agencies' Robotics proposals!

The NIH's system? Yikes! Y'all know what I think about it: It Sucks! For those of you who are used to doing DOD SBIR proposals, be prepared for EXTREME frustration! I've even put out an SBIR Coach's Newsletter issue about what to expect.

Regarding expanding bridge and commercialization funding, Kristina Johnson, the person at DOE who got their first of its kind Phase III funding initiatives in place, is apparently and suddenly leaving the agency. And the NIST "SBIR TT" program cited as the example for innovative SBIR tech transfer just lost it's creator, Cara Asmail, who's moved on to another NIST post. We have a leadership gap.

The turnover issue also extends to agency SBIR Program Director/Manager roles, as many newcomers are sitting in those chairs this year. I wonder how many of them have actually read the SBIR Policy Directive? Probably about as many as our legislators who actually read the bills they vote for.

Finally, common performance metrics? Oh, please! The agencies don't currently have ANY meaningful SBIR performance metrics. At the Beyond Phase II Conference last week, we were shown some (I thought suspicious) statistics on alleged SBIR performance, but there's no consensus on what constitutes SBIR success and no data gathering that has integrity or accuracy. I'm sure the SBIR funded companies have quite a different view of "success metrics" than do the agencies. Who provides the data? Who collects it? Who is to analyze it? What's to be done with the results? All still undefined.

I'm not usually pessimistic, but it's hard to have optimism about SBIR 2.0. Just being well intentioned doesn't cut the mustard. Maybe I'm jaded. Maybe I'm tired of being told to "trust" and "have hope" for "change" we can count on.

Change huh? This Administration's idea of "change" makes me shudder. (And make no mistake about it, the SBA is an arm of this Administration.) Will "simplification" mean adoption of the NIH's horribly complex SBIR collection and evaluation system? Will "best practices" for laying SBIR eggs (and making them into omelets) be defined by the eggs rather than the chickens? Will "performance metrics" have anything to do with creating jobs and producing innovative technology by giving small businesses access to Federal R&D opportunities?

Until SBIR is reauthorized, much of this is moot. Any efficiency changes will be limited and intra-agency. And, Lord knows, intra-agency efficiency changes are sorely needed! Effectiveness changes? Who knows what that even means?

I do applaud what Sean Greene and the Agency SBIR Program Directors (with a special nod to Chris Rinaldi at DOD) are trying to do with SBIR 2.0. They're sincere and trying hard to do what's best for SBIR. I just entreat them to do it smart and not ignore the user community and what's been tried in the past. Involve Roland Tibbetts, Ann Eskesen, and Jere Glover in the dialog and listen to what they have to say. Involve small business and their advocacy arm, the SBTC, too. Make SBIR 2.0 truly collaborative.

If you're going to talk the talk, please walk the walk.
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SBIR Reauthorization? Hit the Reset Button.

2010-09-06T09:19:00.008-05:00

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It ain't gonna happen this year folks. The 111th Congress will be remembered for many things. Reauthorizing SBIR won't be among them.

But, don't worry, they won't let it die. No one wants to be accused of killing a small business program. So it'll be extended as is, with yet another Continuing Resolution, and the 112th will have to start over. With a clean slate. All unresolved legislation is trashed, ya' know.

Hit the Reset Button. It'll be a brand new game.

If the polls are even close to being accurate, there will be a lot of new faces in both the House and Senate. Many of these new legislators are likely to have never even heard of SBIR. So we must start over again with educating, persuading, persisting.

And we'll have new Congressional leadership, both at the top and on Committees. In the case of the House Small Business Committee, that's a good thing. Nydia needs a vacation. She works so hard on behalf of her constituents and supporters' pet projects. Too bad SBIR has never been one of them.

Those of you from Missouri -- get ready to "show me" some style. If the Republicans gain control of the House, Sam Graves is likely to be the new SBC Chair. At least his district of north Kansas City and St. Joseph may actually have some SBIR funded companies in it! Make sure he knows how you feel.

It's also a brand new game at many of the SBIR Agencies. The three biggest in terms of SBIR budgets, DOD, NIH and DOE, all have new leadership at the Program Director level.

Defense, the Big Gorilla with over $1 Billion of SBIR and STTR projects annually, has had Chris Rinaldi at the DOD SBIR helm for just a few months. He's still getting his feet wet. And he's got a bunch of new faces at the twelve DOD component desks as well, as DOD's had a bunch of recent SBIR office retirements including Connie Jacobs (DARPA) and Steve Guilfoos (AF). New game here for sure.

Energy still hasn't officially settled on the replacement for Larry James and has Vince Dattoria serving as Acting SBIR Program Director. No telling what's going to evolve there. But, DOE has done more than any other agency to use their Stimulus Funds for small business R&D projects, so there's hope.

But the biggest new game is at the NIH, where Jo Anne Goodnight recently announced that she is retiring from government service this month. No announcement yet as to who will be replacing her as NIH SBIR Program Director, but Kay Etzler is certainly qualified and capable of handling that job! Heck, she did it most of last year when Jo Anne was on temporary assignment to the Senate. I haven't asked her if she's even put her hat in the ring, but if they don't give Kay the job, watch out. That could very likely portend a significant shift in NIH SBIR policy.

Jo Anne will really be missed, especially by me. She and I haven't always agreed on SBIR policy implementation, but she's been a respected friend. SBIR Conferences just won't be the same without her. Her "SBIR 101" presentations are classic and legendary. She and Joe Hennebury from DOT (also recently retired) were mainstays as the primary cheerleaders for the Program. Now who's going to pick up that slack?

Another SBIR office that's lost a star is NIST. Clara Asmail, in my opinion the most creative thinker among the SBIR Directors, has moved to another NIST post. Hopefully what she started at NIST (see my column on this: Clever Clara...) won't be allowed to fade away.

So, it's pretty much a brand new game. On all fronts. Hit the Reset Button.

I predict this eighth SBIR CR will likely be for seven months, taking us to April 30th of 2011.

We'll have a few months of nothing doing while Congress re-boots and the 112th gets started. New SBIR Reauthorization bills will be introduced by the House and Senate Small Business Committees. Probably similar to the current ones, but hopefully a bit closer together in concept.

Here we go again. Monitor www.SBIRreauthorization.com for updates.

Meanwhile, there are three important events coming up this fall that The SBIR Coach will be participating in as a sponsor or speaker:

The DOD's Beyond Phase II SBIR Conference in San Antonio (Sep 13-17),
The National Association of Seed and Venture Funds (NASVF) Annual Conference in Baltimore (Oct 13-15), and
The Fall 2010 SBIR National Conference in Oklahoma City (Nov 8-10).

If you're attending be sure to look me up and we can talk about your SBIR commercialization game plan. You'd better have one. Companies don't get the luxury of having Reset Buttons!
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Sometimes it takes a Rocket Scientist!

2010-08-15T07:32:00.007-05:00

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I decided a couple of months ago that beating the SBIR drum was just making noise that no one (but a few of us in what's loosely called the Advocacy) cared about. I was getting a headache and decided I'd had enough. I wasn't going to write any more about SBIR reauthorization until something significant happened.

Well, nothing significant (or at least that's made any difference in getting a bill passed) has occurred, except for some behind-the-scenes (don'tcha just love the transparency) maneuvering to get the Senate's compromise worded so both the House and Senate can agree on something. They couldn't get it done by the end of July, so it's now September 30th before we'll, probably at the last minute, see a bill. Hopefully. But, frankly, after what's gone on this year, nothing our legislators do will surprise me. (Monitor www.SBIRreauthorization.com and Rick Shindell's SBIR Insider for updates.)

This isn't rocket science. It shouldn't be so hard to come up with an SBIR compromise if everyone involved really was interested in defining a program that worked better than what we've got. Wishful thinking perhaps, but ya' know, maybe they need to engage rocket scientists to work on this instead of lawyers. At some point, everyone needs a rocket scientist to get past a really tough problem and make things work better.

Hmmm... Don'tcha wish you could call up a "hire a rocket scientist" service and quickly get one to work on a tough problem you've got? No strings attached? And that service be free? ... Actually you can. Really!

I had coffee last week with Shaun Tinoco of The Space Alliance Technology Outreach Program (SATOP). I thought I knew just about everything available to small technology businesses, especially the free (and non-dilutive) support opportunities, but the SATOP opportunity had eluded my ken.

As Shaun enthusiastically explained: "The SATOP program helps those small businesses and entrepreneurs that have hit a bump in the road during their product development. By simply submitting a short Request for Technical Assistance (RTA) via our website: http://www.spacetechsolutions.com/, they will be put in touch with the brightest engineers and researchers to solve their specific issue within 40 hours. This gets them back on the road to future revenue generation in a short time-frame and at no financial cost."

While this is a NASA supported program, no NASA connection is necessary. Any small business may apply. And the technologies involved need not be just ones NASA might be interested in. Just take a gander at their "Success Stories". A couple dozen industries have been helped, including consumer products and food processing.

And did you catch that this "rocket scientist" (likely to be an employee of one of the big NASA prime contractors) you'll be engaging with comes absolutely free of charge? In fact, more than 50 different aerospace companies, universities, and NASA centers have committed in excess of 30,000 hours to providing this free assistance to small businesses via SATOP. In the famous words of NASA legend Wernher von Braun, "It verks!"

Want an informative 2-page SATOP flyer? Click on the Astronaut to download it.

Shaun's final word: "Small businesses should not pass up this opportunity for free NASA support while federal funding is in place." I agree, Shaun!

There's so much more to talk about than reauthorization. I got in a rut about it, but have climbed out, and picked up the "pen" again. Expect more from me on a more regular basis. Thanks to the many of you who have encouraged me to write.
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Greed Drives Continued Campaign to Hijack SBIR's Funding Base

2010-04-29T09:42:00.007-05:00

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We're getting it from all sides. Small business is being pushed by big bullies. What we get from SBIR funding is tantamount to lunch money -- just enough to keep us from starving. But they want it. Want it all. Want it bad enough to lie and cheat to get it.

Yes, lie.

The bullies make statements asserting that VC funded businesses can't participate in SBIR. Of course they can. The companies just can't be controlled by VCs and still be eligible. And they tearfully make statements asserting that VC controlled company SBIR eligibility was "taken away" in 2002. Bullfrogfeathers. It was never allowed. Tell a lie often enough and people begin to believe it. Trouble is, it's our elected officials who believe the lies. Or (tucking campaign fund envelopes in their pockets or purses) choose to ignore the truth.

And, yes, cheat.

Will someone please ask Representative Jason Altmire (D-PA-4) why he keeps trying to cheat the system by sneaking the House version of SBIR Reauthorization (HR. 2965) into other legislation? This is a bad bill. Viewed by everyone other than the NVCA/BIO bullies as being destructive to true small business innovation.

Altmire tried a couple of months ago to sneak it into the first Jobs Bill. Word is it was stopped by the Speaker after a rather rapid and loud outcry by small businesses all over the country. Altmire's on the House Small Business Committee. Isn't he supposed to be looking out for small business interests? Why is he taking the side of the bullies?

And, he's trying again. In a "dear colleague" letter sent out a few days ago, Altmire asked for support for including HR 2965 in the new "Jobs" bill, asserting that this was a "compromise" and good for small business. More bullfrogfeathers! In fact, the House Small Business Committee has steadfastly refused to negotiate with the Senate's Small Business Committee and hasn't even considered a compromise version of their much more reasonable SBIR reauthorization bill (S.1233) that was presented to it last October!

What's more, Altmire's letter was not signed by a single true small business. Lots of Universities and Big Businesses signed it though. This hijacking attempt is both a lie and a cheat!

We're appealing to the Speaker to again quash this attempt to cheat the system. (Join the Stop Altmire campaign!)

The bullies have gotten $1.5 BILLION in new funding from a combination of provisions in the recently enacted Health Care Reform Bill and the Jobs Bill. You'd think that would make them happy and they'd leave us alone for a while. All it's done is make them more greedy, emboldened to go and get it all. They're well funded and determined. And did I say greedy?

Even the Finance Reform bill inadvertently threatens small business via an unintended consequence of redefining accreditation of Angel investors and the process of doing funding deals. (Join the Save the Angels campaign!)

There have been a few voices out there on behalf of small business. The SBTC, Ann Eskesen, and Rick Shindell, for example, have tried valiantly to get out the word and counter the lies. And there are a host of other advocates who do their best to spread the word. Largely, these efforts have been ad hoc and woefully underfunded.

A new group has formed to try and organize some truth and reasonableness into this mess. It's called the Small Biotechnology Business Coalition (SBBC). Check out their website: http://www.smallbiotech.org. See everything they're into. If you're a biotech small business, join. If you're interested in supporting small biotech businesses, join. Any of you not covered by that? Join anyhow.

And, finally, in my last column, I mused about antibacterial lip balm for our legislators' excessive lip-service challenged chapped lips. Little did I know there actually is one. And, it's incredibly (some might say appropriately) branded:

Nothing to add to this, folks. I rest my case.
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SBIR Companies' Futures Threatened by Finance Reform Unintended Consequences

2010-04-26T04:28:00.004-05:00

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UPDATE: The Senate's Cloture Vote failed on Monday, but they'll try again. It's not too late to follow this guidance ...
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It's so tiresome. Every time I hear one of our politicos, from the top guy on down, talk up the importance of small business I just want to puke. Not because what they're saying isn't true. Quite the contrary. It is true. It's the lip service they pay.

Not only do they not find the time or take the effort to actually enact legislation that's beneficial to the growth of small business, but they don't even stop to think about the consequences to small business when they try and fix something they think is broken.

This time it's Finance Reform. S.3217 to be precise. The Congress is hell bent on fixing Wall Street. We're not going to debate here whether they're doing it right, and God knows there are aspects that do need overhaul, but it's the unintended consequence to small business that I'm upset about.

SBIR only takes you so far. To proof-of-concept. Right up to the edge of the Valley of Death. Then other funding is needed to get you to a marketplace. So what does S.3217 do? Cut off the most likely funding source. Angel Investors. That's right, S.3217 kills the Angels.

The Small Business Technology Council (SBTC), led by my friend Jere Glover, began beating the drum on this as soon as the bill was made available for reading. (Yes, some of us actually do read these things.) Senator Dodd has assured Jere that they'll put in some amendments to save the Angels, but you'll pardon me if I don't just sit back and trust it to get done.

The deadline for introducing amendments to S.3217 is TODAY, Monday, April 26th, as the Senate will call for a Cloture vote at around 5PM EDT. So it's time to marshal the troops, warm up the fax machines, and be proactive.

I sent out an URGENT ALERT Newsletter to my clients and friends list yesterday. Here's a short link to the Newsletter:

http://budurl.com/SaveTheAngels

It has the Call to Action with links to resource materials and a template of a letter you can send to your Senators urging inclusion of the "Save the Angels" amendments.

Read the information in the Newsletter carefully. Follow all the links and get informed. Send a letter or two or twenty. Then, spread the word. Forward this info around to anyone who can help us.

I've already heard from some of my contacts that they're re-broadcasting the Alert to their lists, doing Tweets and recruiting Facebook friends to help Save the Angels. One of these is my friend The Fiscal Doctor. (Thanks, Gary! Much appreciated.) Check him out -- he has good advice for emerging companies.

All that lip service has to be quite chafing. I wonder if they have trouble keeping lip balm in stock at the Capitol commissary? Hope they offer an anti-bacterial version for use with lobbyists!
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The NIH SBIR proposal submission process SUCKS!

2010-04-06T05:58:00.003-05:00

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There. I said it. And I meant it.

Over the last few weeks I coached five companies through the intimidating, arduous, and demeaning NIH SBIR proposal submission process for the April 5th deadline. A few of them may need therapy, but by and large, they all survived the process. The jury's still out on me! What's the treatment for "craniac arrest"? I'm getting too old to work this hard!

Why does the NIH's SBIR process have to be so difficult? Required registrations on THREE websites, with multiple registrations on two of them. Just that alone may take a week or two. One of the websites, the NIH's eRA Commons, requires a faxed signature page! Even the IRS eschews that now.

Then, if that wasn't enough, one has to deal with an Adobe Form system with eleven major subforms (one mandatory subform marked "optional") and at least a dozen PDF attachments needed for those subforms, some with page limits, others not. There are dozens of fields and buttons to be filled in and selected, and you'd better do it just so. Or else.

Yes, the NIH provides an Application Guide. Only 234 pages. Shallow Table of Contents. No index.

Once you get the registrations done, all the forms filled out, and the various and sundry documents attached, you still have to endure the submission process. Take a deep breath...

First, upload the completed Adobe Form to Grants.gov (my favorite website...NOT!). Pray you've registered properly and that they'll pass it on to the eRA Commons. If not, fix the AOR credential, and upload again. Don't forget to use the Grant Tracking Number -- but it's called the Federal Identifier in the form. Huh? If it's passed on to the NIH, then the SO and PI can go to the eRA and check the eSub. Alphabet soup anyone?

And, better not have Firefox as your default browser. Grants.gov uses JavaScript. Firefox doesn't. You need JavaScript enabled to "Sign" the application. Aaargh! If JavaScript isn't enabled, you just sit and watch a screen that doesn't change. No message. Nada happens.

Then the eRA Commons does what I call the Nit-Pick Check. If everything's not perfect, you get ERRORS, and have to go back to the start, fix the Adobe Form and resubmit through Grants.gov. You may only get WARNINGS, which do not require a re-submit, but scare the bejezus out of you.

The most ridiculous field that can trip you up is the "Congressional District". Collected for statistical purposes only, it's needed on two different subforms. The format is XX-nnn where XX is the state abbreviation and nnn is the District as a 3-digit number. The use of 3 digits is required even for Wyoming which only has one district. Come to think of it, California has the most Congressional Districts of any state - 53. Why do they require a 3-digit number? That's what I call a Walter Cronkite - "That's the way it is." Put it in wrong? ERROR! Fix and re-submit!

But the Walter Cronkite that really frosts my cookies, is the question that requires you to LIE to answer it right. Yes, LIE. I wanted to do a Joe Wilson when I first read it. It's in the Vertebrate Animals Use section. Here's the quote from page I-69 of the Guide: "Applicants should check “Yes” to the question “Is the IACUC review Pending?” even if the IACUC review/approval process has not yet begun at the time of submission." Then they want you to put "None" in the field for the Animal Welfare Assurance Number. (Isn't that obvious?) If you don't -- go all the way back to the start, put it in, and re-submit. (I know this because we had to do it yesterday!) A button for "Not yet" would make it so much clearer - and truthful!

The DOD's Spring SBIR solicitation will be out in a couple of weeks. Their Guide is only ~40 pages. One website with a 5-minute registration process. You write your proposal and upload one (1) PDF file. Three forms: a cover page, a budget, and a company information form. If you've had prior Phase IIs there's one more form. That's it. And NO submission process! They close the website at the deadline. Anything there gets evaluated. Period. So clean. So simple. Thank you DOD!

So, I'll say it again: The NIH's SBIR proposal submission process sucks. It's so tied up in administrivia it's easy for the applicants to neglect paying attention to the objective: clearly articulate an innovative solution to an important health-related problem. And the agency is so wrapped up in its process that it seems more time (and taxpayer money) is spent on bureaucratic enforcement of policies than on enabling innovation for solving serious health-related problems.

And now, the NIH is campaigning to eliminate the "Error Correction Window", the five extra days (used to be only two but they had to increase it because of recent policy/procedure changes) they give you to fix all the Nit-Pick problems they find. DON'T LET THEM DO THIS! You can weigh in until April 19th at this weblink: http://grants.nih.gov/cfdocs/era_process_changes_rfi/add.htm. Read the NIH's view on why they should be allowed to do this in the Federal Register (page 11889, 12 March 2010). Again: DON'T LET THEM DO THIS!

Remember, the NIH is part of HHS -- our National Health Care agency. They'll be administering ObamaCare. And the IRS will be enforcing it.

Oy Vey! What are we in for?
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SBA Raises SBIR Award Caps

2010-03-31T02:57:00.005-05:00

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NOTE: STTR was not changed by this move -- only SBIR (for now).
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The SBA announced the intent back in 2008. They sought comments. They sat on it for almost two years and did nothing. Until now.

The SBA decided not to wait for Reauthorization and kicked the cap for Phase I awards up to $150K and Phase IIs up to $1M. It's been published in the Federal Register (http://budurl.com/SBAraisesSBIRcaps) so it's official.

Rick Shindell has some background in the March 30th Issue of his SBIR Insider. Check it out on the SBIR Gateway's Insider page.

This doesn't mean that an agency must raise their award levels, nor does it mean that they can't exceed these caps. The agencies can (and do) do what they please. What changes is the level at which they have to explain themselves.

It remains to be seen which agencies will immediately change their funding policies. Note that the NSF actually made this change (at least for Phase Is) last fall.

Making SBIR awards that exceed the authorized caps means the agency must include a justification in each case in their Annual Report to Congress. Making awards below the caps requires no justification.

Some agencies (notably NIH) frequently make awards in excess of the caps. Now they'll have less work to do writing justifications! That should make our hard working public servants happy!

I expect we'll find out what the agencies will do at the SBIR National in Hartford (April 21-23). It'll be a hot topic of conversation. Another reason for you to join me in attending. Check out the agenda for this important Conference and register HERE.

So what about Reauthorization? Does this affect the likelihood of it getting done by April 30th?

Yes it does, and my feeling is: NO, it won't get done. It actually takes the pressure off Congress to act quickly.

Given this development, I now predict another Continuing Resolution, probably to September 30th. Unless Nydia gets her usual way and makes it shorter. Or just lets it die. After all, remember, she thinks SBIR awardees are just "marginal small businesses" on "corporate welfare", and don't matter much.
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ObamaCare "Cures" SBIR Controversy - CAN it be true?

2010-03-23T11:20:00.005-05:00

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Yes, you're reading that right. The "Patient Protection and Affordable Care Act" aka the Heath Care Reform Bill signed by President Obama today includes a provision that may affect SBIR. Maybe even CURES the controversy surrounding SBIR eligibility!

The provision is called the "Cures Acceleration Network" or CAN. It's Section 10409 of HR.3590. Look it up. (An SBIR awardee who's been one of the program's strongest advocates found this and alerted me to it's existence.)

CAN is an NIH funded initiative to provide a new grant mechanism open to biotechnology and pharmaceutical companies of all size to receive NIH grants of up to $15 million. A pot of $500 million has been allocated for the remainder of FY2010. It will be administered by a CAN Review Board of which at least 4 of the 24 members must be VCs.

If the bill avoids the upcoming procedural minefields and this provision survives, it completely obviates the need to include VC controlled companies in SBIR. For years many of us argued that VC controlled companies should be eligible to receive NIH grants - just not from the 2.8% SBIR/STTR allocation. BIO always replied that companies could never get funding outside of SBIR. The CAN program would completely turn their argument on its ear!

Now that Health Care won't necessarily hog the front-burner we might get some attention to other things -- like SBIR! And, maybe with CAN we have a way to keep SBIR from being hijacked by VCs and Big BIO.

Dare we hope this indeed "CURES" our impasse and allows SBIR to be reauthorized without drastically altering the program? Stay tuned.
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SBIR dodges a bullet -- for now. But they'll reload, so let's get busy!

2010-03-05T05:21:00.003-06:00

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The House passed the so called Jobs Bill (HR.2847) on Thursday with only minor changes from the Senate version. SBIR Reauthorization does NOT appear to have been one of those changes. We haven't seen the actual wording of this bill yet, however, and we do know how sneaky they can be. But apparently Speaker Pelosi wasn't willing to back the Altmire/Velazquez maneuver to fold the House version of SBIR Reauthorization (HR.2965) into this bill.

The Jobs Bill now goes back to the Senate for approval of those minor changes before getting signed. It's doubtful that the Senate will do anything to delay enactment, so we can breathe a sigh of relief.

But make that a brief breath please. We have only a few weeks to get the attention of our legislators to actually get a compromise together that will include the Senate's bill (S.1233) and improve SBIR, not harm it. And there's much work to do

I spoke to Deb Santy earlier this week. She runs the Connecticut SBIR office as an arm of Connecticut Innovations. Deb's group has stepped up to again host the National SBIR Conference. It will be April 21-23 in Hartford. We figure this will be right around the time that SBIR Reauthorization goes on the front burner on Congress before it's expiry date of April 30th. Here's Deb's message to y'all:

"The SBIR Program is under attack. All of us are trying to figure out how to get our government to properly reauthorize the SBIR program. A demonstration of your commitment and support is to show up -- attend the 2010 SBIR National. If you have won awards over the years and want to continue winning them -- you need to show your support and get your "you know whats" over to the SBIR National in Hartford. Make this the best attended SBIR National ever -- because it really needs to be the best. If you want this program to continue, if you want the billions of grant dollars to continue, you need to come and make headlines. Hey, you might even make some great contacts and help commercialize your technologies -- because there is a great lineup of networking and "Partner for Profit" activities. I'll be there .. and so should you. No excuses. Just Register"

I'll be there too, Deb. We know our collective voices can make a difference. We just showed that to be true.

The SBTC is leading this fight, and Jere Glover will be hosting a special meeting of the SBTC in Hartford. We had 100+ at the last such meeting in Reno. Let's double or even triple that for Hartford. Better schedule a big room, Deb!

Make no mistake about it. Those who would hijack SBIR for their own bigger business Wall Street focused agendas will reload and take aim at Main Street's small business interests. We've raised the awareness of SBIR among our legislators to unprecedented levels, but we have to even do more.

Pay attention to the strategies that will be suggested on www.SBIRreauthorization.com. Pick up your pens (or Blackberries/iPhones/etc.) and keep the information flowing. We may be small business, but we have big voices.

Come to Hartford. We'll get some national attention on our National Conference. Together, we will make a difference.

And, a personal thanks to all of you who wrote me with expressions of support and copies of the letters you wrote to counter the Altmire/Velazquez maneuver. It's exhilarating to know that someone is actually reading what I write! Yee-Haw!
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SBIR Reauthorization compromise suggested -- but is it a ploy?

2010-03-02T05:53:00.005-06:00

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It works! Raising our voices slowed the attempt to smuggle the House version of SBIR Reauthorization into the Jobs Bill.

But they haven't given up. The train's going down a new track. And the new direction is so ironic: compromise with the Senate's version!

Representative Jason Altmire (D-PA) has sent out a new Dear Colleague letter. Here's the new part:

"As Congress crafts legislative packages to stimulate the economy and create jobs, American small businesses should be first and foremost on our minds. SBIR Reauthorizations passed the House and the Senate in 2009, but have yet to be reconciled and signed into law (H.R. 2965 and S.1233.) A compromise of these two bills to reauthorize SBIR would be an ideal job-creating addition to a jobs package."

Compromise? Really? The House has steadfastly refused to even discuss compromise for quite some time. Why should we believe that's what's intended now? All of a sudden. And the term "reconciled" got my attention too. Uh Oh.

Hmmm.... I seem to remember the Senate offered an SBIR reauthorization compromise almost six months ago. No one has seen it, and the House refused to even consider it. Why are they hiding it? Let's see it! It may actually be worth considering.

Compromise means that both sides have to give and get something. What's the House going to give? What's the Senate going to get?

And what's the darn hurry? We have until April 30th to get an SBIR Reauthorization compromise negotiated. WHY STUFF IT INTO THIS HURRY-UP BILL?

Think about it -- even if SBIR is reauthorized via this Jobs Bill will any new SBIR projects be funded (or jobs created) immediately? Of course not! That's not the way SBIR works. And, the new rules wouldn't even apply until FY2011.

Rick Shindell revealed the existence of the new Altmire letter today in his latest SBIR Insider letter. As Rick points out, this "compromise" suggestion is very likely just a ploy to get us to lay down our pens while they do sneak the House version on the Jobs Bill train.

I agree. It's a ploy. We'd be foolish to trust them.

So please keep the pressure on. Send another letter to your Congressman. Thanks to the NSBA there's an easy way to do it:
http://www.capwiz.com/nsbaonline/issues/alert/?alertid=14725141&type=CO
But make some edits in the template:

1. Let's use Altmire's language to our advantage. Insist that the suggested compromise discussion actually be held. There's even an existing Senate compromise that's waiting for examination. Let's do that.

2. Be sure to point out the ridiculous assumption that this initiative would create small business jobs immediately. Yes, it will spur small business job growth -- next year. We've got two months to do SBIR reauthorization right. No need to rush it through this week!

See www.SBIRreauthorization.com for guidance on how to contact your legislators and updates.
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The Jobs Bill Train is Leaving the Station -- and SBIR is being smuggled aboard!

2010-02-24T05:15:00.002-06:00

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Evan Bayh said it true. The process Congress uses is flawed. It's more about partisan deal making than the public interest. Back room deals. Sneaking legislative provisions into sometimes unrelated bills to serve private interests and avoid scrutiny and discussion.

We have new evidence today, as they're at it again. With SBIR the victim! And they do it with smug satisfaction, unabashedly sanctimonious. They talk up the little guy (small business) but serve big money (VC) interests instead.

Basically, the House, via Rep Jason Altmire (D-PA), is attempting to bypass the SBIR reauthorization negotiations with the Senate and force the House version of the bill (S.2965) through the back door. If he succeeds in including it in the Job Stimulus bill, it will be difficult for the Senate to oppose it, especially since the President wants this legislation passed quickly.

The alert was sounded yesterday by both Rick Shindell in his SBIR Insider, and by the Small Business Technology Council (SBTC) in a Special Alert. Follow the links, or just go to www.SBIRreauthorization.com to see them in their entirety, along with an open letter from my good friend Gary Marsden of Trout Green Technologies (a savvy SBIR Awardee), who by asking a simple question at the Navy Opportunity Forum, created a small firestorm.

It's not over until its over (thanks Yogi), but I fear this train is gathering speed. The Engineer (Pelosi) has blinders on, the Conductor (Velazquez) has had her pockets stuffed and refuses to look at (let alone punch) our tickets, and the Fireman (Altmire) is stoking the furnace with false fuel.

Somehow we need to find the right switch, and divert this train to a siding. We need a bunch of Evan Bayhs to stand up and say ENOUGH! Any more of you out there?
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DC Snow Job - A metaphor for SBIR reauthorization?

2010-02-10T07:38:00.003-06:00

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Washington DC is shut down this week, buried in a couple feet of snow! Nothing much happening in Congress this week. That's probably a good thing, over all.

The only thing of interest this week is the SBIR Gateway's Matching Service for the new DOD STTR Solicitation. Read all about it on the Gateway: http://www.zyn.com/sbir/sttr_partnering.htm. This is a very effective way for small businesses and universities to find STTR partners -- always a challenge. Check it out!

Nothing's happened with SBIR reauthorization for months, so I guess we won't notice any difference there. Besides the snow job done by the VC lobby and their BIO compatriots still has the House Small Business Committee immobilized. Guess they gave away all of their shovels to the Stimulus -- remember "shovel ready" -- and just can't dig out of their offices to discuss the still secret Senate's SBIR reauthorization compromise. It does take two to compromise. So far it's just one-sided.

Hmmm... Come to think of it the situation may not be an incongruity. If con is the opposite of pro, Congress must be the the opposite of progress!

And speaking of incongruities, my lovely daughter-in-law, Kelly, gave me the biggest smiles this week with a list of them. Since there's nothing much else to talk about, I thought I'd share:

Why do drugstores make the sick walk all the way to the back of the store to get their prescriptions while healthy people can buy cigarettes at the front?
Why do people order double cheeseburgers, large fries, and a Diet Coke?
Why do banks leave vault doors open and then chain the pens to the counters?
Why do we leave cars worth thousands of dollars in the driveway and put our useless junk in the garage?
Why are hot dogs sold in packages of ten and buns in packages of eight?
Why do they have drive-up ATM machines with Braille lettering?
Why does the sun lighten our hair, but darken our skin?
Why can't women put on mascara with their mouth closed?
Why don't you ever see the headline 'Psychic Wins Lottery'?
Why 'abbreviated' is such a long word?
Why is it that doctors and lawyers call what they do 'practice'? (Lawyers I can understand, but doctors???)
Why is lemon juice made with artificial flavor, and dish washing liquid made with real lemons?
Why is the man who invests all your money called a broker?
Why do your feet smell and your nose run?
Why is the time of day with the slowest traffic called rush hour?
Why isn't there mouse-flavored cat food?
Why do they sterilize the needle for lethal injections?
Why don't sheep shrink when it rains?
Why are they called apartments when they are all stuck together?
Why do we park on driveways and drive on parkways?

Thank you, Kelly! We needed the smiles!
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Congress Extends SBIR Program for 90 Days

2010-01-28T10:34:00.005-06:00

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Jere Glover, Executive Director of the Small Business Technology Council (SBTC), issued the following announcement this morning:

"The House of Representatives voted on Wednesday to extend the SBIR program for another 90 days. The program had been set to expire on Jan. 31, 2010, but the new continuing resolution now pushes the expiration date back to April 30. The Senate is also expected to pass this legislation in short order.

This is the sixth CR passed since the SBIR program was originally up for expiration in 2008. Although reauthorization bills have been passed in the House and the Senate, the language in the two bills was very different, and the two Chambers have so far been unable to reconcile the differences in the two bills into a single bill that can be sent to the President for his signature.

While we are happy that Congress has not allowed this important program to lapse, it is important that the two sides can reach an agreement this year, before the new Congress starts next year and this process will have to start all over again.

SBTC has endorsed the Senate’s language as an acceptable compromise, and urges the House to do so as well."

Keep tuned to www.SBIRreauthorization.com for updates.
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Senator Cardin Introduces Bill to Repeal NIH SBIR Exclusion

2010-01-27T17:34:00.003-06:00

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It's about time! It's been almost a year since that abomination was perpetrated! As Senator Benjamin Cardin (D-MD) said in a Press Release from the Senate Small Business and Entrepreneurship Committee today:

"It was a severe blow to biotechnology firms across the country when NIH extramural research funding was exempted from their requirement to dedicate funding to SBIR and STTR awards. As a result, small businesses across the country, which the recovery package was intended to benefit, have been denied the opportunity to fairly compete for more than $200 million in grants."

In addition, the bill provides small businesses with tax credits for health insurance and job creation expenses, and opens up new direct loans to small businesses using already allocated TARP funding.

Recognizing the vital role small business has always had in the overall growth of our economy, the bill also encourages elevating the Small Business Administration to Cabinet-level status.

Interesting timing, as the reauthorization of SBIR has still not been accomplished. Where are we on that Senator?

Late word is that the House Small Business Committee has chosen not to respond to the Senate's compromise proposal, and we'll have a sixth Continuing Resolution, this one for 90-days. Oh goodie. Three more months of torture! Don'tcha just love how our Congress works!

We should hear something official by the end of the week. Stay tuned to www.SBIRreauthorization.com for the latest news.
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Senate Calls for FAST SBIR Action

2010-01-22T06:16:00.005-06:00

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Well, not exactly. But it's a wonderful idea! We've only got a week before SBIR fades away or gets extended -- again.

What the Senate did do this week is call upon the SBA to swiftly implement the allocated funds for the Federal and State Technology (FAST) Partnership that provides funding for SBIR outreach support for the States. Senators Mary Landrieu (D-LA) and Olympia Snowe (R-ME) co-signed a letter from the Senate Small Business and Entrepreneurship Committee to Karen Mills, SBA Administrator, requesting a schedule by February 12th for the implementation of FAST. View the official Press Release about the letter HERE.

Now, why push for FAST implementation when SBIR's Reauthorization hangs undone? Is this a signal that we can expect some action next week before it expires? I think so. I hope so.

There is the argument that the DOD has independently extended SBIR through the end of FY2010 and this FAST allocation is for FY2010 as well. With DOD having half of the SBIR pot, some FAST funding to support it would surely be put to good use. So, it's being pushed by folks behind the scenes. I support the push and the Senate's advice to the SBA.

But I do see this as a bigger signal. We have ten federal agencies whose SBIR programs will fade away on January 31st without some legislative action. Lack of action would represent a congressional and Obama administration failure.

After the Miracle in Massachusetts this week, our shell-shocked congress and the Obama administration needs something positive to accomplish. They don't need another failure.

Why not make SBIR Reauthorization a shining example of bi-partisan accomplishment?

Best of all worlds? The House accepts the Senate's SBIR Reauthorization Bill and passes it. There was talk of this sort of action for the Health Care Bill, but they didn't have the votes. Nydia Velazquez' expected opposition notwithstanding, they just might have the House votes to do this!

But the alleged compromise (whatever it is) would work too. Just PLEASE get something done by next Friday! Another Continuing Resolution would be better than nothing, but EVERYONE is tired of this.

FAST action..... what a wonderful idea! Call/email/fax your Senators and Representatives today. Give them something productive to work on.
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Some SBIR Predictions for 2010

2010-01-01T16:17:00.006-06:00

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Yogi Berra said it best: "It's tough to make predictions -- especially about the future. The future ain't what it used to be!"

What's going on in Washington sure underscores Yogi's insight. Things, they are a changing. I've been watching the SBIR reauthorization related activity in Congress and at the Agencies with bemused frustration. I've heard every argument and every rationalization of what should be done a countless number of times. I can even argue both sides on some of the issues.

One thing for sure, SBIR will be different. But how? No one knows for sure. Especially not me. But I'm going to apply another of Yogi's observations -- "You can observe a lot by just watching." -- and give a shot at some predictions for SBIR in 2010, based solely on what I've observed.

Before I do, let's do a quick check of my 2009 predictions:

1. The SBA won't raise the award caps independent of congressional action. CAME TRUE. They didn't.

2. Grants.gov will make some major changes. CAME TRUE. They introduced an Adobe-based template to replace the despised PureEdge software and improved the input submission capacity and user communications. All that didn't prevent a 3-hour melt-down during the NIH Challenge Grant submission however.

3. The SBIR landscape will become more competitive. CAME TRUE. All agencies reported increases in submissions. The budgets did not increase. So, award rates did decline for many of the Agencies.

4. Reauthorization will be further delayed. CAME TRUE. We're currently in our fifth continuing resolution.

Four for four. Not bad! Now for 2010...

Here are my fourteen predictions for how the Reauthorization will shake out:

1. SBIR/STTR will be reauthorized this January.
2. Non-individual majority owned companies will get SBIR eligibility -- with some limitations and restrictions.
3. The funding caps will be increased, but not by as much as the House wants.
4. The funding base will also be increased, very slightly and over time, but not enough to compensate for the increased caps.
5. Phase I will still be required, but Fast-Track will be enhanced.
6. Proposal evaluation cycles will be shortened.
7. Multiple Phase IIs (and follow-ons for further development) will be permitted.
8. Support for Phase III (commercialization) will be expanded for all agencies -- and all agencies will place increased emphasis on commercialization potential as a criteria for award.
9. Required inclusion of projects for some critical technologies will be specified.
10. Special award preference for some non-technology demographic interests (including veterans) will be included.
11. The policy and oversight authority will be a Committee co-chaired by the NIST and the White House's OSTP.
12. The SBA's Office of Advocacy will continue to be able to comment on SBIR issues.
13. Money will be authorized for SBIR administration and award database maintenance.
14. Reauthorization will be for between five and eight years.

I made most of these predictions back in October and haven't seen or heard anything to change my mind from what I said then.

Why do I think it'll happen in January? Everyone is tired of the continuing resolution game. President Obama has promised that small business issues will be the next top priority once Health Care is a done deal. I believe that will happen as soon as Congress reconvenes.

The OSTP/NIST policy committee likelihood was reinforced recently by a comment by Aneesh Chopra, the first-ever [are you ready for this title?] Chief Technology Officer (CTO) and Director for Technology in the White House Office of Science and Technology in an interview he gave in December: "[Pending] House and the Senate agreement, we think a modernized version of the SBIR program will more tightly integrate the work that’s been done there to meet the operational needs of the agency and could spur economic growth." Sounds to me like he's clued in and ready to effect SBIR "modernization". I don't expect the Senate and House compromise being worked on to go in a different direction. The line will be toed.

On the eligibility issue, the likelihood that the Senate will relax its stance on SBIR eligibility was enhanced by the little talked about recently concluded temporary assignment of my friend Jo Anne Goodnight (the NIH's long-time SBIR guru) to the Senate Small Business and Entrepreneurship Committee for the past six months. She's been an unwavering advocate for allowing VC controlled companies to compete for awards. I expect she persuaded some of her fellow Senate committee staffers to support a more relaxed eligibility position. C'est la vie.

Much of what's being proposed for non-innovation or non-technology related award preferences meets the politically correct litmus test, and that's all it will take to have these provisions included. Pah.

So, we shall see. SBIR will continue. It will change. The future won't be what it used to be. (Thanks Yogi.) And however it shakes out, I'll continue to be the SBIR Coach. Maybe I need to come up with some of my own Yogi-isms.
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SBIR still hanging -- Obama promises big small business push in January

2009-12-18T05:36:00.003-06:00

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Our Congress, being consumed with forcing through a Health Care bill that most of us don't want, is ignoring most everything else. As predicted, Omnibus Appropriations bills were rushed through this week, but SBIR reauthorization was not included among them. So it'll be January before any more attention is paid to us.

The SBA did get $2 million appropriated for the Federal and State Technology Partnership (FAST) program for State SBIR outreach funding. This hopefully assumes there will be something to reach out for! Unfortunately that money won't go very far. FAST awards have been in the $100K-$150K range. Do the math. But, it's better than nothing I guess -- which is what we had for this the past couple of years.

So, not much to report, and not much to advise y'all to do. We're just hanging. If you get a chance to talk to a legislator (or an aide) during the Christmas recess, do it! They might actually be relieved you're NOT talking about health care.

We do have word from the White House that President Obama will turn his attention to Small Business issues as soon as Health Care is done. We say -- the sooner the better! Perhaps we can get some REAL attention to SBIR and other small business concerns for a change. This lip service we've been getting just isn't cutting it. Frankly, we'll believe it when we see it.

A quick word of memoriam: We were sad to hear of the passing of a real friend to SBIR -- Jim Chern of NASA. He led the NASA Goddard Space Flight Center's SBIR/STTR Program and was a frequent speaker at SBIR Conferences. He passed quietly in his sleep while attending the West Virginia SBIR Conference earlier this month. He will be missed.

Boeing did send out its SBIR interest list for the DOD Solicitation 2010.1. Write me if you'd like a copy. And today (Dec 18th) is the last day to pull down copies of the presentations from the Reno SBIR Conference from their website. If you missed doing it and would like a copy of any of the presentations, I've got them all, so write me for that too.

Unless there's something important to relate, I'll take a hiatus from these columns for a bit, and be back in early January with my Annual Predictions. Merry Christmas, Happy Channukah, etc. etc.
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Tick...Tick...Tick...SBIR hangs in the balance

2009-12-04T04:59:00.007-06:00

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Are y'all as disgusted as I am?

Our leaders, elected on a campaign stressing openness, keep making inexplicable one-sided closed-door decisions further widening the partisan political gap.

We seem to be telling our enemies how long to hold on before we'll begin to walk away from the battlefield.

We hold a "Jobs Summit" excluding some of the most important job creation advocates because they disagree with the Administration's health care reform initiatives.

Our "overburdened" legislators take time to hold hearings on the embarrassing "Party-Crasher-Gate" while ignoring the economy-busting impact of "Climate-Gate".

A celebrity's melt-down suddenly becomes the most important news story of the year.

I could go on. But I won't. It's too depressing.

December 18th is only two weeks away. We'll see an Omnibus Appropriations Bill introduced at the last moment just before that date. Betcha there will be no time for debate -- let alone time for actually reading it. If it doesn't pass, the Government shuts down. That won't happen.

SBIR is very likely to be tucked into that pile. Supposedly there's a compromise being worked on. Behind closed doors. Of course. So the clock is ticking. Tick...Tick...Tick.

In the mean time, it's "business as usual" at many of the Federal agencies. That includes gathering SBIR proposals. DOD, NIH, DHS, NIST, NOAA, and even DOEd will be accepting applications this month. NSF and DOE just closed their cycles.

Accepting applications may not mean closing the deal on awards, however. If nothing happens soon, all SBIR but DOD's expires at the end of January. So the Agencies may delay actually committing to disburse funds. Oh goodie. Small businesses sure can afford to wait indefinitely. NOT!

So, yes, I'm disgusted.

I also feel helpless. My Texas Senators and my District's Congressman are all in the party being excluded from the closed-door sessions. They're already sympathetic and supportive of the Senate's version of SBIR Reauthorization. So I "preach to the choir" if I push. Those of you with a different situation -- PLEASE GET BUSY!

The presentations from the National SBIR Conference held in Reno last month have been posted on the Conference's website. Here's the link: (http://www.unr.edu/SBIR-STTR2009/Presentations.html). These will only be available until December 18th, so go look and download anything interesting while you can. Be sure to look at my friend Mark Henry's talk on "Reviewing the Reviewers". You'll find my talk on "Evaluating Readiness for Funding" there too.

The folks at Boeing have released their interest list for the current SBIR topics in the NIST solicitation. Write me if you'd like a copy. I expect to see the Boeing DOD list any day now.

And, finally, please check out the Manhattan Declaration. I've signed it. It feels good to make a stand on principle.
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Is America losing its ability to innovate?

2009-11-20T05:41:00.011-06:00

The headline and subtitle of the Newsweek story got my attention: "The Decline of Western Innovation -- Why America is falling behind and how to fix it."

Innovation. What is that anyhow? Webster says it's "(1) the introduction of something new. (2) a new idea, method, or device."

OK. That's simple enough. SBIR is supposed to provide funding for small businesses to develop new ideas, methods or devices for solving Federal agency defined problems. That's why the "I" is in SBIR, isn't it?

Has SBIR been effective in producing innovation? YES! The evidence is overwhelming.

A 2008 study done by two University of California at Davis professors, Fred Block and Matt Keller, addressed the subject of "Where Do Innovations Come From?"

It's great reading. Figure 6 is the highlight for me (click on it to expand):

R&D Magazine started issuing their "R&D 100" innovation awards in 1963. These awards honor the 100 most technologically significant products introduced into the marketplace over the past year.

SBIR was created in 1982. Figure 6 shows that approximately 25% of the R&D 100 awards now consistently go to SBIR/STTR funded companies. And they do it with a measly 2.8% of the Federal R&D budget to work with! Think about it.

It can't be any clearer: SBIR funds Innovation.

How do we regain the initiative in being the world's innovation leader? Seems simple to me. Expand SBIR. Make it available to more companies, not fewer. Make it a bigger part of the R&D priorities of our agencies. Don't weaken the process by which projects are vetted. Don't degrade the quality of projects by including non-technology criteria for award.

Send every Senator and Congressperson a copy of the Block/Keller article. Encourage them to read it. Yeah, we know that's wishful thinking. Well, maybe they'll at least look at the pictures. Especially Figure 6.

Then stress that the Senate's version of SBIR Reauthorization will encourage innovation. The House's version will inhibit it.

The Message is clear: SUPPORT THE SENATE'S VERSION OF SBIR REAUTHORIZATION.

I had lunch with Matt Keller a few weeks ago. He's at SMU in Dallas now. He says they have a new article in prep. I can't wait to read it.
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A Fork in the Road - Which Path for SBIR?

2009-11-13T06:05:00.008-06:00

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Yogi Berra was one of my heroes when I was a kid. He was in his prime as the perennial All-Star Catcher for the New York Yankees and I idolized him. But it wasn't until after he retired as a player and hit the banquet circuit did I really appreciate his genius.

His quotes have become apocryphal for their malapropisms and "huh?" factors. One of my favorites is, "This is like deja vu all over again." But the Yogi-ism that is applicable to the current SBIR reauthorization situation is, "If you come to a fork in the road, take it."

The question is, which path at the fork do we take? Which way to go? Perhaps the path well traveled - follow the crowd. Sometimes it's the path someone pays you to take. Much of the time, it's the path of least resistance.

In my opinion we're at that Fork with SBIR.

The House is leaning toward the path they're being paid (via campaign contributions) to take, refusing to even talk with true small business interests.

The Senate is leaning toward the well traveled path - 27 years of successful SBIR history.

But in the spitit of "compromise" Congress is being pressured to take the path of least resistance.

Will SBIR remain a seed-funding program designed to enable Small Business participation in a fair competition for developing innovative solutions to agency problems, or will it become another program that funnels agency money to companies already funded by special interests that really have nothing to do with enabling small business innovation?

My friend Carl would argue that it's not the Government's job to foster or enable small business innovation, but rather to improve the ROI on use of the Government's taxpayer funded R&D money. I understand and appreciate that argument.

But I contend that without SBIR, we lose the opportunity for the little guy to fairly compete for a tiny slice of the pie. This opportunity makes the American innovation culture unique. I say if we lose it we're in danger of losing our entrepreneurial souls.

We've heard rumors of an impending compromise. The FDANEWS even ran this teaser in their subscription-only Devices and Diagnostics letter last Monday:

House, Senate May Be Close to Compromise on SBIR Act
The months-long wait for small device companies looking for revisions to the Small Business Innovation Research (SBIR) program may be nearing an end as a compromise version could be introduced later this month, a Senate staffer says. “We’re hopeful we will be able to reach compromise before the November recess,” Vicki Ekstrom, spokeswoman for the Senate Committee on Small Business & Entrepreneurship, said...

They wanted ten bucks for the whole article. I sprung for it. Wasted my money. Not much more there -- just a rehash of the issues.

Compromises are a necessity in our multi-opinioned world. The pressure to get SBIR reauthorization done before Congress recesses for the Holidays probably means that the path of least resistance will be the Fork taken. Just get it done and off the table. Political pressures drive the give and take, not logic. That scares me.

With our Congress's current trend to vote on legislation without reading it first, who knows what we'll get? Frankly, only a few of our legislators really understand SBIR. Most have no clue and don't know where this program had been, let alone where it's going. As Yogi once said: "You've got to be very careful if you don't know where you're going, because you might not get there."

What should we do about this? Continue to educate legislators and their staffers on what's important. Encourage them to follow the Senate's lead. Keep the pressure on to NOT fundamentally change the SBIR program. SBIR isn't broke. It's just overdue for some modernization and tuning.

But mostly we just have to wait and see what the compromise includes. Waiting is hard. After five continuing resolutions, this process seems never ending. I'm tired of it.

So, I guess we'll leave this with one last Yogi-ism: "It ain't over 'til it's over."
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Clever Clara Seeks to Close Research Gaps at NIST with SBIR TT

2009-11-06T04:16:00.004-06:00

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You've all heard the cliched proclamation: "I'm from the government and I'm here to help you!" Rarely is it actually the truth. I have just encountered one case where, apparently, it is!

Her name is Clara Asmail. She's the SBIR Program Manager at the National Institute for Standards and Technology (NIST). She's charming, engaging, and absolutely brilliant. A multiple degreed physicist with an entrepreneurial bent. She'll talk technical with the best of you, while being a very helpful and competent administrator. A rare combination.

I attended Clara's presentation at the National SBIR Conference this week on what she's been doing to close research gaps that have prevented NIST funded technologies from achieving commercialization. She calls the program, initiated in 2008, SBIR TT (for Tech Transfer). The NIST SBIR website has a FACT SHEET to explain this innovative approach to fostering innovation.

Essentially, if you can show how you'll close the gap in some NIST research, Clara will give you a FREE non-exclusive research license to use the NIST technology in your project. On top of that, she'll fund your project with NIST SBIR money! Just as with any other SBIR project, rights to the results of the project are yours. And you get access to NIST personnel, facilities, and knowledge regarding the invention. What a deal!

Ann Eskesen was at the presentation too, and she called Clara's approach "The cleverest thing she's seen in thirty years!" Quite a statement from the lady who's seen it all, SBIR-wise!

NIST has just opened their FY2010 solicitation. See a quick list of the new NIST Regular (R) and Tech-Transfer (TT) opportunities HERE. Proposals are due by January 22nd.

We've heard rumors that there is some progress being made on SBIR Reauthorization, with the Senate offering a new compromise bill to the House. There's actually some hope that we'll get this resolved by the end of the year. I'm standing by my predictions for how it will all shake out. If you missed my prognostications, see them HERE. When we have details, I'll let you know.

And finally, we're saddened by the deplorable tragedy at our Texas' Fort Hood yesterday. The stress this incident has added to our brave soldiers and their families is immeasurable. Please join me in contributing to a phone-card initiative for helping Fort Hood soldiers communicate with their worried families.

A special website "Operation Call Home" has been established by an Austin radio station to accept donations for phone-cards. Here's the link: http://www.590klbj.com/community/OperationCallHome.aspx. Thanks for your support.
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Just in time for Halloween: SBIR LIVES! But will it be a monster?

2009-10-30T06:00:00.007-05:00

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Well it lives for three more months anyhow. The House has, predictably, shortened the SBIR Reauthorization fuse recommended by the Senate and agreed to yet another Continuing Resolution. The new "drop dead date" for the SBIR program is January 31, 2010.

But, it'll get settled before then. Probably by year end. And probably tucked into an Omnibus Appropriations Bill. And that could mean that it might emerge as a monster nobody loves.

My friend Rick Shindell and I talked about this yesterday, and his SBIR Insider issue from last night reflects on the situation. You can read the basic facts (courtesy of Rick) on http://www.sbirreauthorization.com/, but here's some interesting insights, also courtesy of Rick:

Just so you don't feel slighted, CRs are not the sole domain of SBIR. Actually Congress just passed a much bigger and more important CR today, the one that funds the government and keeps it running! It too was set to expire on October 31, but the new CR will keep the government funded through................ December 18, 2009. The CR was part of H.R. 2996; Department of the Interior, Environment, and Related Agencies Appropriations Act, 2010.

The relationship of this to SBIR is that Congress has a lot to do before the end of the year. They go home early for Christmas, so the December 18 date is "drop dead" for finishing and passing the remaining 7 (out of 12) appropriations bills that fund the government. Although Congress wants to address each of the remaining 7 bills individually, it is most likely they'll fail and the tool to fix everything will be an end-of-the-year omnibus bill.

By now you're familiar with the phrase "too big to fail" (i.e., AIG, GM et al.), well the same is true for the end-of-the-year omnibus bill. Historically all kinds of items are slipped into these "must pass" bills. Is it possible that SBIR reauth may be one of those? Could it be used to "sneak" some unpopular small business items into law? It's been tried before.

I think Rick is right on point here. I believe that SBIR Reauthorization will be accomplished by year end. But, just as with Dr. Frankenstein's monster, extra parts may get attached just beacuse they were available. We won't much like some of the provisions that latch on, like leeches, to the program.

My gut-feel predictions (not supported by any inside information):

Non-individual majority owned companies will get SBIR eligibility -- with some limitations and restrictions.
The funding caps will be increased, but not by as much as the House wants.
The funding base will also be increased, very slightly and over time, but not enough to compensate for the increased caps. The result: fewer awards.
Phase I will still be required, but Fast-Track will be enhanced.
Proposal evaluation cycles will be shortened.
Multiple Phase IIs (and follow-ons for further development) will be permitted.
Support for Phase III (commercialization) will be expanded for all agencies -- and all agencies will place increased emphasis on commercialization potential as a criteria for award.
Required inclusion of projects for some critical technologies will be specified.
Special award preference for some non-technology demographic interests (including veterans) will be included.
The policy and oversight authority will be a Committee co-chaired by NIST and the OSTP.
The SBA's Office of Advocacy will continue to be able to comment on SBIR issues.
Money will be authorized for SBIR administration and award database maintenance.
Reauthorization will be for five years or less.

Will the SBIR Program still be effective? Yes. Will it be harder for a lone-wolf inventor with a good idea to get funded? Yes. Will some non-small business interests use the new rules to get access to the funds. Yes. Will promising technologies get seed funding via SBIR? Yes. Will the national interest be served by the new rules. Yes.

And that's the bottom line. SBIR is good for this country. It promotes entrepreneurship. It contributes to the innovation economy. It should survive. But, it won't be perfect. And that's OK.

SBIR is not an entitlement. Nothing in the Constitution says that the government must provide opportunity for small businesses to develop innovative technology. Any awards must be earned. And decisions on who gets funded will always be subjective. As Walter Cronkite would say, "That's the way it is."

Times are changing. The SBIR program must change with it. The strategies for winning awards will change. I'm actually writing a book that will help you formulate your winning strategies. Watch for it in the Spring.

So, enjoy handing out the candy entitlements to the costumed characters who ring your doorbell this weekend. And in honor of increased SBIR caps, if any Frankenstein monsters show up, give them a double ration!
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Small Business Funding Gets Fashionable - SBIR Benefits

2009-10-23T04:10:00.002-05:00

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It's been a week of good news for a change. Congress is actually allocating money for small businesses instead of just talking about it. SBIR is benefiting. The DOD SBIR Program will get another year of life as soon as President Obama signs the National Defense Authorization Act into law. And the NIH soon will be required to pony up a big chunk of the ARRA Stimulus money they tried to keep away from the SBIR community.

We'll come back to the NDAA in a moment. This NIH news is what's really exciting for me.

You'll recall back in February shortly after the ARRA Stimulus was signed, this column broke the big story: Hidden in the Fine Print - SBIR Explicitly Excluded from NIH Stimulus Money. Turns out this dastardly deed was done in secret while the bill (H.R.1) was in Conference, bypassing the House and Senate Small Business Committees.

I personally sent faxes to every member of both Committees, cluing them in. I called for legislative action to repeal the exclusion and give small business back the $230 Million in projects stolen from them. Reaction was swift from the Senate (I got calls), but the House was strangely silent. Hmmm. The NIH refused to budge, effectively thumbing their nose at the Senate by responding to letters with bureaucratic gobbledygook and not even showing up at a special hearing called to discuss the situation.

It took ten months, but the Senate has finally taken steps to repeal the exclusion. Senate SBE Committee Chair Mary Landrieu introduced a bill (S.1832) this week that, in addition to enhancing small business loan provisions, requires the NIH to provide $150 million out of their ARRA funds for new small business projects during GFY2010. Seven other Senators (Kerry, Harkin, Cardin, Shaheen, Boxer, Pryor and Casey) have immediately joined her in co-sponsoring it. The Press Releases are flowing (Landrieu's, Cardin's, Shaheen's, Boxer's, Casey's). Other may also join -- how about asking your Senators to co-sponsor!

Why only $150 million? Seems that's what the NIH said they could do in a negotiated settlement. Other than having admitted behind the scenes that they did instigate the skulduggery, they're still not revealing who on the Conference Committee slipped the wording into ARRA. Did they really think we wouldn't notice it?

Now this has to get through the sausage grinder that is our legislative process, but with the co-sponsorships and Obama's recent small business support proclamation, it's a cinch to get passed.

Now, back to the NDAA. The NDAA's inclusion of SBIR was reported in last week's "Big Dog Barks" column. Not much more to say about that here, other than to again thank those responsible. Rick Shindell does a great job of that in his SBIR Insider column he sent out last night.

What about the other ten Agencies? Their SBIR and STTR programs will expire at the Witching Hour on Halloween unless another Reauthorization CR is passed. Watch for it in your trick-or-treat basket. No one in the Congress wants to be caught not supporting small business just now. It's suddenly become fashionable.
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SBIR's Big Dog Barks - Is the House listening?

2009-10-14T02:13:00.010-05:00

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The Big Dog in the SBIR world is the Department of Defense. After being silent for a long time regarding SBIR reauthorization, the Big Dog barked last week. Loudly.

The House and Senate Armed Services Committees (ASC), evidently fed up with the inability of the Small Business Committees in the House and Senate to agree on SBIR reauthorization, decided to preempt them and simply do it as part of the National Defense Authorization Act. They effectively incorporated the Senate's version of SBIR reauthorization into the NDAA. It almost worked. [Read the whole story HERE and keep informed at SBIRreauthorization.com.]

Maybe it should have. After all, DOD has over half of the total SBIR and STTR budget. They deserve a seat at the table -- maybe at the head of the table. NIH has gotten most of Congress's SBIR attention as of late, and not in a very good light either. If it were up to some of the NIH's supporters, the SBIR Program would likely die -- they've as much as said so. Clearly the DOD's supporters won't let that happen.

When the House Small Business Committee cried foul, claiming jurisdictional authority (Stay in your own yard, Big Dog!) the ASCs agreed to withdraw the reauthorization language and give Congress another year to get it done -- but the DOD's SBIR, STTR and CPP programs are to be unilaterally extended (as is) to September 30, 2010. Essentially the NDAA provides a continuing resolution just for DOD.

Big Dog has barked. Big Dog has agreed to sit and stay, but only for a year. But it will provide innovative technology project funding for its small business community for that year - NO MATTER WHAT.

It couldn't be clearer. The Senate's SBIR reauthorization bill is the one that DOD supports. Hello! Is the House listening?

We've another deadline looming. Halloween. October 31st. The DOD's SBIR program will continue (assuming the NDAA is signed), but the other Agency SBIR programs will expire at the stroke of midnight on Halloween unless something happens.

Will they get it done by then? Unlikely. My bet - another CR. The fifth in this long, drawn out drama. Why should Big Dog wait alone in the yard?

Appropriate this is happening around Halloween. Time for costumes, parties, and trick-or-treaters. Trick-or-treaters are totally self serving. Grabbing goodies while masquerading in an assumed persona. Threatening consequences if not indulged.

Hmmm... do I sense a metaphor here? Our Congresspersons as self serving trick-or-treaters? Most wearing donkey and elephant costumes? Staying in character or be banished from the Party? Instead of candy, they want our money (taxes) and power? If they don't get it, we're all going to suffer some dire consequence? Naw....it couldn't be that simple! Or could it? Now that's scary!

Will SBIR be invited to the legislative Halloween Party? We're not bringing much in the way of treats. Only $2 Billion or so. And it's not even new money. Boring. Sort of pales into insignificance in the big picture. So maybe more tricks.

I wonder what costumes HSBC Chairwoman Velazquez and HS&T Subcommittee Chairman Wu are wearing to the Party? Hopefully their hearing won't be muffled and they'll heed Big Dog's barks. Please.
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Do you have a Playbook?

2009-10-02T06:08:00.005-05:00

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What's a Playbook? Ask any coach and you'll get a quick answer. It's a collection of things the team will do in various situations. Things designed to give your team an advantage over the competition and score points. The more points you score, the more likely you'll win the game. Should SBIR companies have a Playbook?

You betcha! Every company should have a written down collection of things to do in various situations. Is that a Strategic Plan? A Business Plan? A Marketing Plan? Yes. Yes. And yes. But it's more besides. Plans usually limit their focus to what is intended to be done (offense). That's not enough.

You need to have scenarios of alternative plays to execute (paths to take) in both offensive and defensive situations. You must have goals for how many points to score (revenues to bring in). And you must have winning the game (building wealth via an exit event) clearly in your sights.

Whatever pops up you should have a play in mind. Handle surprises by designing new plays. The more practice you've had in doing it (conducting planning sessions) the quicker you'll be able to respond and run the new play. Remember, the clock is always ticking. There are no "time-outs" in business.

Only the best reach the "Playoffs". For SBIR companies that means playing with the "big boys" and selling your technology to the end user.

If you've got a good Playbook you'll know what to do no matter what you encounter along the way.

Don't keep the Playbook in your head. Write it down. If you've written down the Plays then everyone on your team will be executing the moves necessary to score points. The more points you score, the more likely you'll reach the Playoffs and win the game.

It's a good metaphor. I first put "SBIR Playbook" under registered trademark protection several years ago, and have used it on my website as a metaphor there. Just this week I realized it applies here as well. I do this column to help guide productive utilization of the SBIR program. So I've renamed it "The SBIR Coach's Playbook."

I hope it motivates you to create your own company's Playbook. And, of course, if you need an experienced Coach to help you put it together, you know where to find me.
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Another month of SBIR Reauthorization agony - Is Dr. Dolittle running the show?

2009-09-25T06:26:00.003-05:00

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The quick news is the informal conference committee hasn't done its job and no SBIR Reauthorization compromise was produced. SBIR (this time along with STTR and the DOD's CPP) has been extended again -- a mere month to October 31st. Gee. Is anybody surprised? We have a do-little-but-argue-and-sling-mud Congress. Maybe Dr. Dolittle is in charge.

Remember the Dr. Dolittle story? In the charming Hugh Lofting series of children's stories he was a doctor who eschewed human patients for animals, and he spoke their language. He lived in a fantasy world. Sort of like our Congress. But that's not why I'm raising this metaphor.

I have two reasons, actually. The first is his name -- irresistible!

The second is one of the animals he encounters -- the Pushmepullyou. It had two heads, was conflicted as to which direction to go, so had trouble going anywhere. Sort of like SBIR companies.

I was at the DOD's "Beyond Phase Two" (BP2) Conference this week. It was all about how to transition the technology created via SBIR funding into end use. I had a revelation. It finally dawned on me why SBIR commercialization is so hard to do.

SBIR has always been a technology push game. Techies rule. With some SBIR funding, create some whiz-bang technology and then try and find some applications for it.

I'm a Business Coach. I help companies focus on what it takes to be successful. A basic tenet I stress is "be selling something to a market pull". Find a market with a pain that is begging for a cure. Develop the cure. Sell the cure. It's so much easier than pushing a new technology on a resistant market.

Market pull vs. technology push. It's so basic. Think Pushmepullyou. The pull side should dominate. But it doesn't.

Where do SBIR topics come from? From my observation, in the DOD it's largely from their R&D shops. Techies. Looking for new technologies, to be developed by other techies. Yes, there are applications in mind. Certainly that's true. But the ultimate customer isn't involved. Projects are not market driven.

The DOD's Commercialization Pilot Program (CPP) is supposed to connect the SBIR company that's finished Phase II with the customer. That's probably the first time that the light of a market perspective is shined on this effort. For the most part, it's too late. It's still technology push.

There were several companies at the BP2 Conference who talked about their commercialization successes. I was struck with a common thread. In each case the companies had approached the process from the beginning with a marketing perspective. I was very proud. I had actually coached two of them.

If the DOD is to make the CPP (or whatever it evolves to) a success, it must offer more product-focused end user generated topics. Clearly identify market pull early on. Trying to push the technologies into possible applications after development just doesn't work very well. Pushmepullyou.

It comes down to this -- it's not about being funded to develop the technology, it's about selling something to a customer who will use it. Strategic planning focusing on that user customer from the start is the key.

My friend, and fellow SBIR consultant, Russ Farmer of PBC, summed this up well in his excellent presentation on the last morning of the Conference. Russ emphasized that SBIR commercialization success is "all about marketing!!" and "if we are real lucky" is not a business strategy.

Russ's presentation on Business Models of SBIR Funded Companies is a must read. Every SBIR company will see their stage of development profiled - and they probably won't much like what they see. A copy of it will be available for download from the BP2 Conference website by mid next week.

Will Congress get SBIR reauthorized by the end of October? I doubt it. Watch for yet a fifth CR extending the agony to next March.

I heard that a certain Congressperson was upset that I've been criticizing the Committee for being unwilling to compromise. There's a cure for that. Stop futzing around, reach a compromise and I'll stop criticizing! In the meantime, I'm pleased that someone from the Hill is actually reading this column!
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The Seed Investment Landscape - Interpreting a Picasso

2009-09-18T06:28:00.009-05:00

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It's like Picasso painting landscapes. All the pieces are out there but the picture is confusing. Making sense of it is very much up to individual interpretation. So where should an entrepreneur look for finding seed investment? The answer may lie in understanding what investors are looking for.

The NASVF conference this week presented a wide array of options and opinions on seed and early stage funding. Representatives of federal, regional, state, and both public and private sector economic development and investment organizations participated on panels. Most felt that their approaches would be successful, but the only things they truly agreed upon was that such investment was both necessary to our future economic growth and harder to get in this economy.

One of the more interesting panels was on "Hot Markets and Sizzling Sectors". Each of the three panelists said something I felt profound.

Tom Pickens (Astrotech Corp) said that he firmly believed that it takes a team of at least four people to make an entrepreneurial company succeed. It stems from a Psychology Today article he read years ago. Take any four people and let them take an IQ test pooling their answers, and they'd rate at the genius level. Think about that a while.

Richard Helfrich (Alameda Advisors) said that scientific discipline collaboration is the key. We need to combine chemistry, physics, biology, mathematics, and engineering disciplines to evolve new ideas for applications. This may mean that our academic departments may actually have to talk to one another! Fits with the "team of four" premise too.

Bill Reichert (Garage Technology Ventures) cautioned against pre-determining likelihood of success based on the type of technology. His premise: The most important technologies are the ones we can't categorize yet! Cast a broad net and keep your mind open to novelty. And don't be constrained by your biases.

And then, reinforcing all of this was a conversation I had recently with Laurence Briggs, CEO of the InvestIN Forum, a Dallas area private investor network, which has joined with other Angel groups around the country and internationally in a syndicated manner. This effectively forms a "Band of Angels" over 420 strong, looking to make deals.

And make deals they do. At about the rate of one a month currently. They'll put in up to $7 million for the right deal. Angel investing isn't what it used to be!

I asked Laurence what they look for. He said that no particular technology is preferred. What they look for is a proved-out concept for a product or solution addressing a significant market with scalability, and a good coachable team appropriate for their stage of development. Proved-out product. Significant market. Scalability. Appropriate team. Coachable. (Hmmm.... sure sounds just like what the NASVF panel said was important.)

A featured speaker at the NASVF conference was Rick Wade, the Senior Advisor and Deputy Chief of Staff at the US Department of Commerce. He made the point of saying that the DOC was reinventing itself, and, that short of actually being renamed, wanted to become known as the "Department of Innovation".

I couldn't resist. When the session was opened to questions from the floor, I asked him what the Commerce Department would do to support SBIR if the provision in the current House bill (HR2965) that would put NIST in charge of formulating SBIR policy becomes law. He replied that he had recently participated in a discussion in the White House on that very subject, and "the Department of Commerce would do everything it could to see that SBIR is appropriately supported". (I'm in Missouri as I write this, so I'll just say "Oh yeah? Show me!") In a private conversation later that morning, he asked me to provide him with some briefing materials, and I promised to do so.

So, let's sit back and gaze at this Picasso-like picture. SBIR companies should listen to this guidance, and think beyond the grant to the business that they'd like to evolve. Create a masterpiece by paying attention to what works in today's economy.
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SBIR Reauthorization Redux? No Such Luck.

2009-09-11T04:54:00.003-05:00

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Here we are -- just a few days from expiration of the third SBIR Reauthorization Continuing Resolution. Is there any hope for resolution by the end of the month? Nope.

Word from behind the scenes is that discussions are pretty much at a standstill. Staffers on the various Committees are standing firm on their bosses' positions. Provisions to significantly open up eligibility, provide special preferences having nothing to do with technology, eliminate the Phase I vetting process, have multiple Phase II awards possible, and increase funding caps without increasing the funding base just aren't going away. There's as much spirit of compromise here as there is on the health care debate. Nada. Zilch.

The University lobby has been pushing hard for just plain letting the SBIR program expire. They've been consistent over the years on this. They want "their" $2B back! Research is "their" game. Tech Transfer royalties from commercialization of innovations is "their" reward -- never mind that they, for the most part, can't figure out how to do it!

The VC/BIO lobby has been keeping up the drumbeat too. BIO had a press conference yesterday where they expressed how they were "very pleased with the result of the vote on the reauthorization bill in the House." They repeated the "Big Lie" that the bill was "an attempt to overturn "fairly arbitrary" administrative agency decisions that prevented venture capital-funded companies from participating." Arbitrary? Participating? Sheesh! Perception management at its best.

There are actually provisions in the House bill that move SBIR administration out of the SBA and into the Department of Commerce with oversight controlled by the White House Office of Science and Technology Policy. If this happens, SBIR becomes a politicized innovation economy program, with true small businesses frozen out of participation.

Some will argue that this is a good thing; that it will improve the Government's ROI on R&D investment. Perhaps it will. But, the vision of Arthur Obermayer, Roland Tibbetts, the late Ted Kennedy, and many others, for fostering innovation from true entrepreneurs, will be lost. That would be a shame.

The SBA is in trouble folks. SBIR isn't the only SBA administered program that is languishing in Committee and facing expiration. Will they survive as an independent agency? I fear not. SBIR being moved out is, in my opinion, an omen.

My prediction, shared by many in the SBIR Advocacy: we'll get another SBIR Continuing Resolution. How long? I say six months -- taking us to next March.

Some of the Agencies aren't waiting for Congress to act. Some are independently increasing funding caps. DOE and NSF, for example, are now providing $150K for Phase I, and DOE is doing $1M for Phase II. Others, like DOD and NASA, are standing pat. NIH generally ignores caps anyhow. It's really getting confusing -- helps justify the need for a coach! (smile)

So, the SBIR game is still being played, although the rule book is being very liberally interpreted. Check out the Gateway for proposal opportunities, and monitor www.SBIRreauthorization.com for updates on what Congress is (or isn't) doing.

The SBIR Coach will be at the NASVF Conference next week, and at the DOD sponsored Beyond Phase II Conference the week after that. My columns will report on what I learn there. Stay tuned.
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Reflections on the Birth of the SBIR Program

2009-09-04T03:15:00.010-05:00

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SBIR lost perhaps its greatest champion on August 25th with the passing of Senator Ted Kennedy. Relatively few know how much he did to ensure the SBIR Program became reality.

There were many back in the late 1970s and early 80s who worked tirelessly to get the legislation crafted and passed. Among them was my friend Ann Eskesen. Ann recently shared an email letter she had received that shed much light on that early process, including Ted Kennedy's behind-the-scenes role, and I'd like to give it wider exposure here.

To the SBIR Community:

Whether strong supporter or ardent foe of his political stance, the recent passing of Senator Ted Kennedy has generated among those on both sides of the aisle extensive discussion of, and comment on, the extraordinary diversity of his legislative impact.

Few are aware that the creation of SBIR is high on that list.

This weekend I was in receipt of an email from an old friend who in the early-mid seventies was the original source of the idea of a special federal R&D access by small firms - an idea that later became the SBIR program - and with whom a few of us then worked to get to the enabling legislation which took that program government-wide in 1982. My friend's email is printed below in its entirety along with, from my own files, some photographs from the Rose Garden of the White House on that very hot and humid day in July 1982 when President Reagan signed that very controversial legislation.

It is useful, I think, first also to tell you a little about Dr. Arthur Obermayer - the essence of the dignified gentleman and creative talent - who is now well into his eighties and still active in the technology development space.

Arthur was/is a highly regarded MIT PhD and his wife - Judy - also a published PhD from Carnegie Mellon, had run a very successful, research-based small firm for a long time through the sixties and seventies. Publicly traded when few small firms were, Moleculon Research was founded, I think I recall, on the research that had been Arthur's doctoral dissertation.

Their work had important medical application. However, despite a solid, research-based track record, when Arthur approached NIH for potential R&D support, he was summarily turned away. At that time NIH did not fund anyone who came from a for-profit entity - a condition that actually remained in effect until only months before passage of SBIR.

Knowing that they were probably missing out on something important, however, a few senior NIH players advised Arthur to set up a non-profit arm which they told him they would be delighted to fund. He saw that as manipulating the system - effective for his firm but not an option for many others - and he refused. Instead he had a discussion with his Senator and his friend - Ted Kennedy.

At that time, the Senator controlled the NSF budget to some extent so the decision was obviously to go with that agency, not NIH. Arthur's idea was simply that there be established a place in a federal agency where small firm applicant's research work could be considered. The Phase I-Phase II classic SBIR design was Roland Tibbetts - subsequently hired by NSF as the first SBIR program Manager - and came much later.

It is classic Kennedy that he knew how to work the system. However, I have to admit, I had not previously known that was actually a two-step process until I read Arthur's accounting of the NSF effort to avoid the Kennedy original directive and his out-maneuvering them - see below. It is also classic Kennedy that when, with two NSF SBIR offerings and one DOD under our belts, we subsequently shifted the political effort to making SBIR a government wide program, rather than being at the head of what was to become a highly contentious and, at times, downright nasty fight, the Senator opted for a behind-the-scenes role - out of the frame but very clearly, not out of the picture. Instead, that leadership role was assumed by Warren Rudman (NH.R) - a brand new Senator and a Republican.

It was also Arthur Obermayer, BTW who met with Horace Crouch in DOD in about 1979-1980. Crouch was a retired Army General working in the Pentagon but open to the interesting challenge of enabling an effort that would bring within reach of DOD, the leading-edge capabilities of small firms. It happened that Horace Crouch was Strom Thurmond's brother in law - already then a senior player on the Senate Armed Service committee. Arthur persuaded them to the idea of having a version of the NSF program in DOD. They found a spare $5M and DESAT was launched as a small-scale effort in DOD in 1981.

With the NSF and DOD experience in place and a record of achievement already becoming evident, under the able direction of the late Milt Stewart, to include Arthur and Judy and a few others some like Jere Glover and Dave Metzger - being still prominent in the SBIR space - in 1980 we all worked the halls (big time) at the White House Conference on Small Business to get SBIR and the precursor to Bayh-Dole among other things onto the agenda of that convening. I am still somewhat incredulous, when you consider how few we were, that we got that assembly of 2000 small business people - most of whom were in retail, services etc (nary a high tech firm among them) - to vote that issue (as I recall) Number 5 of the 60 top recommendations to come out of that Conference. As further testament what can happen when small firms speak together, of those 60 recommendations - well over 40 are now implemented.

Ann Eskesen, President
The Innovation Development Institute
Swampscott, MA
www.inknowvation.com

See Dr. Obermayer's letter
"The Role of Ted Kennedy in the Birth of the SBIR Program"
by clicking HERE.

L to R: The Obermayers, Senator Kennedy, and Ann Eskesen (7/22/82)

President Reagan signing the SBIR Program into law on July 22, 1982.

SBIR National Conference coming to Reno in November

2009-08-28T08:18:00.004-05:00

Shrinking angel fund investments. Decreasing venture capital support. Limited family and friends savings to draw on. How is one to ramp up a start up company with innovative but unproven technologies?

Why, with SBIR of course! This year's National SBIR Conference will be held on November 2-5 in Reno, Nevada. I'm going to ask my friend Fritz Grupe, the General Conference Chairman to tell you all about it:

Each year more than $2.3 billion in grants and contracts are awarded by eleven federal agencies participating in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs.

Through these competitive programs, small businesses can receive up to $100,000 for feasibility research in Phase I and up to $750,000 for prototype development in Phase II. Some of the participating agencies provide additional financial and management assistance subsequent to Phase II.

Although the competition for this support is stiff – approximately 1 in 10 proposals are funded in Phase I, SBIR and STTR remain as the largest startup fund in the United States.

In order to compete effectively, many entrepreneurs need help in learning about this important program. How can companies find out about the priorities, the varying deadlines and the guidelines for getting into the fray?

The Nevada Small Business Development Center is hosting the 2009 National SBIR / Small Business Technology Transfer Program Conference from November 2 through 5, 2009 in Sparks, Nevada, a Reno suburb. The conference is supported by the 11 federal agencies, all of which will have representatives available to talk to innovators about their product ideas in one-on-one sessions and in general sessions.

In addition, it is expected that another 30 or more prime contractors, SBIR consultants, and other companies will be exhibiting and providing attendees with information on how to proceed.

Separate speed networking sessions enable attendees to interact with other innovative people in three areas of interest: medicine and agriculture, science and defense, and energy and the environment. This enables innovators to meet potential customers and business partners.

The conference includes numerous sessions on related topics including intellectual property protection, proposal writing hints, commercialization, business planning and other sources of funding than these two programs.

Further information on the conference is available at www.unr.edu/sbir-sttr2009.

The SBIR Coach will be speaking and exhibiting at this event. I'd love to see y'all there!

By the way, there are some other SBIR-related events coming up in September:
Federal Lab Consortium Open House - Sept 1-2, San Francisco, CA
NASVF National Conference, Sept 14-16, Oklahoma City, OK
Beyond Phase II - Sept 21-24, Orlando, FL

Rick Shindell published a lengthy SBIR Insider report earlier this week. See it HERE. In addition to the latest news on SBIR Reauthorization, it includes a very nice tribute to the late Senator Edward Kennedy, who was one of SBIR's earliest and greatest champions.
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Whither Goest Seed Funding?

2009-08-21T05:40:00.004-05:00

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SBIR's future is uncertain. The VC industry is hunkering down and tightening the screws on their portfolio companies. They even look to SBIR's "reform" as a way to "prop up portfolio valuations".

So what is the future of seed funding? We're about find out what those who are in the forefront of the seed funding world think about that.

The National Association of Seed Venture Funds (NASVF) international conference, which brings together hundreds of the most prominent seed and angel investors with technology transfer and economic development professionals, takes place September 14-16th in Oklahoma City, Oklahoma. Here is a partial list of some of the world class experts that will be speaking:

-Honorable Secretary of Agriculture Thomas Vilsack, will talk about his department's big investments in research and development to improve the food industry.

-Rick G. Wade, deputy chief of staff for the US Department of Commerce, will talk about the various programs and ways his department supports entrepreneurship.

-Wendy Kennedy, founder of WendyKennedy.com, Inc., will explain how to turn ideas into financial opportunities.

The SBIR Coach (a member of NASVF) is an invited speaker, and will be on a panel with Wendy Kennedy. Our topic is:

Translating Science into Business When Funding is Tight
History has proven that during times of economic stress is when we see a garden of opportunities – ideas that have the ability to transform markets – witness the Ipod, Google and Amazon during the recession of early 2000. Spotting winning ideas and business models in these uncertain times takes a disciplined, yet creative approach. Savvy investors are even more rigorous in their assessment of risk and return. But what else is needed besides a sound technology and business plan? What types of technologies are being funded at the state and federal levels? This panel will address some key issues funders should consider before they invest in a technology venture in the near future.

For information on the NASVF Conference, go HERE.

There are a whole bunch of SBIR opportunities out there at the moment:

USDA SBIR (due Sept 3rd)
NASA SBIR/STTR (due Sept 4th)
DOE SBIR/STTR (due Sept 4th)
NIH SBIR/STTR AIDS related (due Sept 7th)
DOD SBIR/STTR (due Sept 23rd)
NSF SBIR/STTR (due Nov 17th)
NIH SBIR/STTR (due Dec 5th)

See the details on The SBIR Gateway, including a matching service for DOD and NASA STTR partnerships.

By the way, Boeing has issued its Interest List for the current DOD SBIR and STTR rounds. If you'd like a copy, send me an email.

I had the opportunity to meet Karen Mills, the new SBA Administrator, at the SCORE National Leadership Conference in Salt Lake City this week. We were both speakers. Her message: DON'T STOP TALKING TO LEGISLATORS ABOUT SBIR!

So, keep on educating House and Senate members. SBIR reauthorization isn't over until it's over.
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Need an Antidote to SBIR Malaise?

2009-08-13T16:51:00.005-05:00

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I've about had it with our Congress. This current health care turmoil has everyone in a frenzy. And it's all so familiar. Partisan politics is more important than anything else. It's OK to selectively stifle dissent. Special interests rule. Sigh.... The problem is the health care stakes are so high SBIR is fixin' to get lost in the shuffle again. I'm beginning to not care. Isn't that sad? Maybe I've got SBIR Malaise.

Yes, they'll probably arrive at some sort of SBIR Reauthorization compromise, arranged at the last minute by overworked and harried staffers, who are truly doing their best. But will what results be in the best interest of small business? Sure! And if you believe that, I have a bridge to sell you.

So it's time to move on and talk about something useful. Deal flow that moves technology to commercialization. An antidote to the malaise.

There's an annual event called the World's Best Technologies Showcase. It's been held in Arlington, Texas since 2004. WBT2010 will be held on March 16-17, 2010. The Center for Innovation at Arlington (CIA) serves as the host organization for it now. I proudly serve as the CIA's Business Coach (can you see that quoted out of context?).

Arizona based Development Capital Networks (DCN) organizes and puts on the event. Here's what they're saying about it...

While the WBT has evolved from its beginnings in 2002 in Pittsburgh Pennsylvania, the mission has remained clear - the WBT is the premier event to see the world's best vetted and mentored deal flow ready for the marketplace. In the past seven years the WBTshowcase has worked with over 470 emerging companies and technologies transitioning from the lab, the university, and yes even the garage, to the marketplace. If you are ready to expose your research or technology to investors, licensees, and commercialization partners the WBT is the must attend event.

We are often asked, "What is the WBT difference?" Simple, the WBT serves as a partner on your path to commercialization. The competitive selection process is designed to give each applicant feedback on their commercialization opportunity from investors and licensees. Each selected presenter works with a two person mentor team in the weeks leading up to the event walking away with a concise 6-minute investor/licensee oriented presentation and perhaps meets a strategic partner or two along the way. The two day event provides each pre-prepped selected presenter with a forum to showcase their emerging research or company directly to investors, licensees, and strategic partners.

The WBT is not designed to showcase technology for technology's sake but to offer a path to the marketplace. The Showcase represents the best vetted emerging technology from around the globe, prepped and ready for business. There is no cost to apply and receive feedback on your commercialization opportunity from investors and licensees. Apply before September 14th and you will receive feedback on your application, which you can then resubmit before the final review by the screening panelists.

Want to learn more about the WBT? Visit www.wbtshowcase.com or contact DCN's Event Director Amanda Radovic (aradovic@wbtshowcase.com; 480.477.6408).

This is a first class event with international participation. Any SBIR funded company should consider being showcased at WBT2010 for moving to commercialization.

So check it out. www.wbtshowcase.com

SBIR isn't the only game in town. Good thing.
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DOE Announces Stimulus Funding for new SBIRs

2009-08-06T12:28:00.006-05:00

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The Department of Energy gets it. On several levels. Stimulus means creating opportunities for creating jobs. Clean Energy is currently a cool technology to support. R&D without commercialization is just, well, academic.

So, the DOE is putting a nice chunk of their ARRA Stimulus money ($8.5 million) into new Phase I SBIR and STTR projects that place an emphasis on near-term, clean energy technology commercialization. Sixty six-month Phase I projects will be funded in amounts up to $150,000.

The Funding Opportunity Number is DE-PS02-09ER09-27. (CFDA 81.049)

Here's the complete topic list (For details: technical topic descriptions)

Topic 1: Advanced Building Air Conditioning and Refrigeration, Thermal Load Shifting, and Cool Roofs
a. Air Conditioning and Refrigeration in Buildings
b. Thermal Load Shifting
c. Advanced Materials for Roofing that Provides High IR Reflectivity, and is Architecturally Acceptable, Including Cool Roofs

Topic 2: Water Usage in Electric Power Production and Industrial Processes
a. Water Desalination for Use in Power Plants, Industrial Processes, etc.
b. Water Cleanup, Recycle and Reuse from Use in Power Plants, Industrial Processes, etc., Before Discharge
c. Desalination Using Concentrating Solar Power (CSP)

Topic 3: Power Plant Cooling
a. Advanced Dry or Hybrid Wet/dry Cooling Systems
b. Advanced Heat Exchangers for Super-critical Water Cycle Based Power Plants
c. Advanced Heat Exchangers for High Temperature, High Pressure Applications

Topic 4: Advanced Gas Turbines and Materials
a. Advanced Turbine Technology for IGCC Power Plants
b. High Performance Materials for Nuclear Application
c. Advanced Industrial Materials
d. Novel Modular Designs for High-efficiency Low-cost Distributed Power Applications

Topic 5: Sensors, Controls, and Wireless Networks
a. Sensors and Wireless Networks for Buildings Applications
b. Sensors and Wireless Networks for Industry Applications
c. Sensors and Wireless Networks for Nuclear Power Applications
d. Integrated Power Line Sensor Systems for the Smart Grid

Topic 6: Advanced Water Power Technology Development
a. Pumped Storage Hydropower (PSH)
b. Advanced Hydropower Systems
c. Wave and Current Energy Technologies
d. Advanced Component Designs for Ocean Thermal Energy Conversion Systems (OTEC)

Topic 7: Smart Controllers for Smart Grid Applications
a. Smart Controller for Household
b. Smart Controllers for PEV
c. Smart Controller to Enable the Dispatch of Distributed Energy Generators

Topic 8: Advanced Solar Technologies
a. Hybrid Solar Energy Systems: Combination of Photovoltaic, Solar Heat, and/or Solar Cooling
b. Innovative Applications of Solar Energy for Fuels
c. Concentrating Solar Power (CSP) Systems for Distributed Applications
d. Organic Photovoltaic and Nanotech/Photonics

Topic 9: Advanced Industrial Technologies Development
a. Novel Approaches that Significantly Reduce Energy Consumption and Emissions in Cement Pyroprocessing
b. Scale-Up of Nano-Material Production
c. Novel Technologies that Utilize Waste Heat from Industrial Processes
d. Industrial Greenhouse Gas Emissions Reduction

Topic 10: Advanced Manufacturing Processes
a. Mitigation of Heat Losses, Fouling, and Scaling in Manufacturing Unit Operations
b. Advanced Distillation and Non-Distillation Processes
c. Advanced Dewatering

You can see the complete solicitation on the DOE SBIR website (http://www.science.doe.gov/sbir/) or on Grants.gov.

These projects can be styled as SBIR or STTR projects. Applications are due by September 4th.

You have to use Grants.gov (oh goodie!) to submit the proposal so better get started NOW to get the CCR and Grants.gov registrations done in time.

Thanks for this opportunity, DOE! Now, how about the rest of you Agencies?
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Aaargh! Two more months of SBIR Reauthorization torture!

2009-07-28T03:11:00.009-05:00

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You'd think they already had enough time to do this. But no such luck.

We're talking about SBIR Reauthorization, of course. It's not going to happen by the end of the month. Surprise! Hah.

Word is that we'll have another Continuing Resolution that will extend the deadline one more time to September 30th. So we've got two more months of torture to endure.

The SBTC put out this notice on Monday:

The Senate passed a continuing resolution on Friday that would extend the SBIR program another two months. That would make the new expiration date for the SBIR program September 30th, 2009. This CR also needs to pass the House of Representatives to be enacted, and we expect it to pass the House on Tuesday.

Currently, the staff from the House Small Business and Science Committees are in negotiations in conference with the staff from the Senate Small Business Committee to produce a compromise SBIR reauthorization bill that will incorporate elements from both the House and the Senate Reauthorization Bills. We have heard and have reason to believe that both sides are negotiating in good faith, and that no party is acting unreasonably or otherwise sabotaging the process. Because there is an agreement between the staffers in the conference, we won't know what's in the compromise bill until it is finished and released to the public.

The SBTC will be hosting a conference call on Thursday to discuss these developments. Contact Alec Orban if you'd like the call-in number and code.

Thankfully, it appears that our Committee Staffers are not following the Conyers model and are taking time to actually read and analyze the provisions of the two bills.

We'll stay on top of the continuing madness, both with updates here, and on www.SBIRreauthorization.com.

As a side note, one of my clients has been following the DOD's history of topic offerings and has made the following startling observations: "There are 15.6% fewer DoD topics in FY09 than the average over the two previous years. Air Force had a staggering 44% reduction in topic count, MDA had a 23% reduction, and DARPA had a 17% reduction." Anybody have any ideas as to what's driving this? Might it be the uncertainty over reauthorization?

And finally, I'm pleased to report that two Texas editions of the Business Journal featured articles about the SBIR Reauthorization struggle last week. The SBIR Coach was interviewed and quoted in a front page article by the Austin Business Journal, and was featured on the Editorial page in the San Antonio Business Journal.
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Final SBIR Strategy Set - Urgent Action Needed

2009-07-22T04:47:00.009-05:00

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We're in the bottom of the Ninth. Score is tied. Wall Street (House Team) 1, Main Street (Senate Team) 1.

There's very little sentiment to send this to extra innings, and we don't want the whole game to be called off.

Fellow SBIR Advocist Les Bowen presents the strategy to break the tie and win the game for Main Street:

__________________

Dear SBIR Advocates:

Click HERE: (SBIR_Conferee_Letter.pdf) to see the letter that will be sent from House Representatives to Senator Landrieu, Chair of the Senate Small Business and Entrepreneurship Committee, expressing their support for S. 1233, the Senate SBIR Reauthorization Bill.

We need about fifty House Representatives to sign on in order to swing the SBIR House/Senate conference deliberations to support the Senate bill.

As you know, the Senate SBIR reauthorization bill, unlike its House counterpart, H.R. 2965, preserves most of the SBIR program for genuinely small businesses like ours, while the House bill sells out the SBIR program to large venture capital-controlled businesses. You will recall that several House representatives, including those who have already signed on to this letter, proposed amendments to H.R. 2965 that would have made it less onerous to small businesses, but this amendment was shot down by the House Rules Committee. We believe the reason was that your prior outreach efforts to your House representatives caused widespread consternation in the House that the Markey/Tsongas/Hodes/Welch amendment would pass, much to the consternation of the VC-lobby that has taken over the House SBIR reauthorization process.

By signing onto this letter, your representatives get a second bite of that apple. Their signature supporting the Senate bill gives much better insight into what most House representatives really felt about House bill H.R. 2965 and its bad consequences for true small businesses. It provides Senator Landrieu and the Senate conference committee delegates with much-needed leverage to achieve a compromise SBIR reauthorization bill that is more like S. 1233 than its House counterpart. We need SBIR to remain a program that works for innovative, independently-owned small businesses like ours, rather than becoming a bail-out fund for well-heeled venture-capitalists.

You do need to take action today. These negotiations will be over early next week. Your representative has already received a copy of this letter. Please call your House representative’s small business staffer, email the letter and ask him or her to bring it to their boss’ attention and get them to sign on this week.

Thank you for this last effort in support of the 2009 SBIR reauthorization.

We will keep you posted as information emerges from conference.

Leslie J. Bowen, President
Materials Systems Inc.
__________________

The SBTC's Jere Glover adds this suggestion, which was provided by another ardent supporter:

I ask that you urge your Congressional Representative to sign onto the Markey letter today. (Next week will be too late.) I also ask that you ask him or her to personally contact members of the House Small Business and Science Committees and ask them to consider how they are going to explain to small businesses in their state why they voted to kill jobs on Main Street so more Wall Street billionaires could have access to more Federal funds.

Here's a Dear Colleague letter sent to all Members of the House of Representatives by Rep. Niki Tsongas and others: Tsongas Dear Colleague Letter.pdf. Get your Representatives to sign onto this letter! They can do that by contacting Mitch Robinson (Rep. Markey) at 5-2836 or Mitchell.Robinson@mail.house.gov, or Kate Lynch (Rep. Tsongas) at 5-4311 or Kate.Lynch@mail.house.gov.

If you'd like to write your own letter to make a point, and would like some talking points, here's a letter from the SBTC to Senator Landrieu: SBTC Letter to Sen Landrieu.doc

Updates to all of this and links for contacting your Representatives and Senators can be found on www.SBIRreauthorization.com.
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Conferees: Please Don't Harm the SBIR Program

2009-07-16T19:19:00.006-05:00

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If I had my druthers, the soon to be convened SBIR Reauthorization Conference Committee would be required to swear a Hippocratic style oath of "Primum non nocere" - First, do no harm.

There is potential that harm will be done. There's also potential for significant improvements. The problem is that it's not clear which provisions of the two SBIR Reauthorization bills on the table (H.R.2965 and S.1233) improve and which harm. It all depends on your perspective. Both sides of every issue think they're promoting improvement.

So what should we do? We're encouraged to write to our legislators and offer irrefutable logic to support a position. Does that work? Do they actually vote based upon our logical presentation? Evidently not very often.

We can argue details and numbers and statistics ad nauseum. Actually we have. I'm tired of that. Aren't you?

So let's take a different view. A qualitative view. My view of Primum non nocere. Without any numbers or statistics.

I. PURPOSE

SBIR is a technology development stimulator. It's not a jobs program, although it does result in jobs being created. The competition for project selection is based upon whether the innovation furthers the mission of the sponsoring Agency, whether advancement of the state of the art is likely, and whether the company proposing the work is capable of executing the plan and eventually making money from it. No other criteria should be applied to project selection. Applying criteria that are unrelated to the innovation defeats the purpose of the program and will do harm.

II. INTENT

SBIR provides the seed funding for jump-starting an innovation's development. The Government is the investor. In Phase I the innovation's feasibility is vetted. If the proof-of-concept after Phase II proves out, then it's up to the company to find the commercialization money to carry the innovative technology further. It may take additional investment. If the Government is eventually to become the customer for this, then it may be in the Government's interest to provide additional investment -- but not from the seed-funding pot. Keep SBIR money strictly for feasibility vetting (Phase I) and one proof-of-concept project (Phase II). Any other use of these funds harms the program by reducing the number of jump-start projects that can be funded.

III. ELIGIBILITY

Eligible companies for SBIR grants should be those who are unlikely to find seed funding anywhere else to demonstrate that the proposed technology innovation will actually work. Providing grant money to companies who have other sources for funding harms the program by reducing the funds available to those who need it.

IV. FUNDING

The number of projects funded should be an appropriate number so that we're not leaving worthy projects behind, but also not providing funds to companies who really have no chance or intent to move to commercialization. This is a balancing act of making the allocation base (the set-aside percentage) and the funding caps (project maximums) appropriate to permit the funding of as many truly worthy projects as possible. Any provision that arbitrarily upsets this funding balance does harm to the program.

V. EVALUATION

There needs to be a way of evaluating the return on the SBIR investment. There are three interested parties here -- each with their own perspective on ROI: (a) the Government agency making the investment, (b) the company receiving the grant, and (3) the taxpayer. If we can't measure ROI there's no way of evaluating whether anything we do improves or harms the program.

Just about every SBIR issue on the Conference Committee table can be related to one of these five categories.

So, Conferees, as you look at the details, please relate them to one of the above quality considerations and ask:

Do we preserve the purpose and intent of SBIR as Roland Tibbetts and others envisioned it?
Are we providing seed funding appropriately to worthy recipients, in the proper numbers, at the proper levels?
Can we calculate the return on this investment, so that when we go through this process again we have some real data to evaluate?
Does this provision do harm to the quality of SBIR?

OK, let's get to work. Please raise your right hand, and say after me: "Primum non nocere ut SBIR".

Hippocrates would be so proud!
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Senate passes SBIR Reauthorization Bill - Conference Committee is Next

2009-07-14T11:17:00.009-05:00

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It was unanimous. The Senate wasn't swayed by pressure from the special interest lobbies and stuck to their guns.

Yes, a few amendments were added to S.1233, but they're constructive. (The full text of what they passed will be on on GovTrack soon.)

Rick Shindell's Insider of 7/14/09 has a good summary of the amendments:

Senator Tom Coburn (R-OK) issued an amendment that basically prohibits earmarking of SBIR award funds, and that SBIR funds must be competitive and merit based. His changes also include better metrics, and an 8 year reauthorization period, as has been customary for SBIR reauthorizations.

Senator Russ Feingold (D-WI) also had an amendment passed that reads: .."SBIR program or STTR program shall encourage the submission of applications for support of projects relating to security, energy, transportation, or improving the security and quality of the water supply of the United States to such program.’’.

So, S.1233 is now "engrossed" and passed, along with H.R.2965, to a yet to be named Conference Committee.

We have heard that Representatives Ed Markey and Nikki Tsongas will be circulating a Dear Conferee Letter encouraging that provisions in their disallowed amendment to H.R.2965 be considered by the Committee.

The SBIR Advocacy, led by the Small Business Technology Council (SBTC), is formulating a strategy, a position paper, and template letters for you to send. We'll have them available soon.

Keep tuned to this Blog and to to www.SBIRreauthorization.com for updates.
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Wall Street wins House SBIR Fight by TKO - But It's Not Over!

2009-07-08T16:11:00.006-05:00

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Wall Street won the House SBIR battle today by default. The House Rules Committee disqualified Main Street's avatar. They refused to allow the Markey Amendment to be voted upon. Why? Good question.

The House Parliamentarian declared the Markey Amendment "germane and pertinent" to H.R.2965. But the Rules Committee Chairwoman Louise Slaughter (D-NY) decided that the Amendment was "out of order" and not to be voted upon, so it was blocked.

Do you suppose she did that because it may have actually passed? After all she is a New Yorker, just as is Chairwoman Velazquez, who was adamantly opposed to the Amendment.

I hear rumors that there will be some Dear Colleague letters sent from the House Members who were in favor of the Amendment and are very unhappy about what's happened. Who the letters will be sent to remains to be seen.

So, H.R.2965 passes the House. Final vote was 386-41. Text will be up on GovTrack tomorrow.

Now it goes to the Senate, which of course has S.1233. Markedly different.

This skirmish was lost, but the battle is not over. A Conference Committee will ultimately decide this.

Oh goodie. Are we in for more behind closed doors shenanigans? We'll try and figure out what to expect and keep you posted.

Thanks to all of you who so tirelessly kept the pressure on. You are appreciated.

I'm going out for a beer.

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7/9/2009 UPDATE: Rick Shindell published a new Insider letter last night that has details on the amendments to H.R.2965 that the Rules Committee did and did not accept. What a crock! This has nothing to do with partisan politics. It's simple. Please tell me we don't have some of the best Committee Chairs that money can buy! That Hefeweizen I had almost took away the bad taste that's in my mouth. Almost.
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It's a Prize Fight: Wall Street vs. Main Street. The Prize: SBIR Money and more.

2009-06-26T06:52:00.014-05:00

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Are you ready to rumble? There's gonna be a big fight! A Floor Fight! In the House of Representatives!

In one corner: Wall Street. The Challenger. Big. Brawny. Polished. Well heeled. Slickly packaged and promoted. Big guys trying to muscle in on the little guys' territory and grab some money.

In the other corner: Main Street. The Defender. Small. Scrappy. Agile. Impecunious. Ragtag organization and promotion. Little guys trying to hold onto the only source of money they've got.

The Prize: Money of course. Millions, even billions of dollars. But wait -- There's more! (Be patient, we'll get to it...)

In the ring for the Wall Street Challenger: Velazquez the Chairwoman. A Rep from New York. The Big City. The Challenger's home territory. Tough. Stubborn. Aloof. Bows to the almighty VC. Believes that the only ones worthy of her time are those who've been anointed by the almighty VC. Won't even let the little guys speak in her presence. (Huh! Doesn't she actually lead the Gang that allegedly protects the little guys' interests? What's she doing in the Challenger's corner anyhow?)

In the ring for the Main Street Defender: Markey the Magnificent. A Rep from Massachusetts. Bows to no one. Energy is his thing. Willing to stand up for the little guy and challenge the Gang. Gets it that small businesses can have great ideas and innovate even if they haven't been anointed by a VC yet. Just as stubborn as the Challenger's avatar. Ready to fight. Ready to lead.

The Referee: Pelosi the Speaker. All powerful. Owns the ring, so to speak. She can stop the fight by imposing rules that no one else understands. Both of the avatars in this fight are "Dems", Pelosi's Party, so it's really gonna be interesting! Hopefully, she'll decide to preside over a fair fight and give both sides a chance to throw some punches.

The Prize: SBIR Money. Not a lot per award actually -- just enough to get started. Plant the seeds and grow a product. Prove it works.

Is SBIR really worth fighting for? The little guy thinks so. He has no other source for seed money. The already anointed have VCs with deep pockets. And the VC's bucks are bigger, much bigger. So what's the deal?

The deal is -- there's more! Along with the prize money comes Validation. Acceptance. Proof that a great idea can produce solid results. Results that make money. (The almighty VC reveres money over all else.)

And, for the little guy it's jobs. The SBIR prize creates jobs. Especially valuable when jobs are hard to find.

How does the winner of this fight get chosen? All the House Reps vote. Winner gets to define SBIR (H.R.2965). So, there's a lot at stake.

Women and minorities don't get anointed by VCs much. If the Wall Street Challenger wins, they should probably just forget about SBIR.

Most VCs seem to live in big cities by the ocean. Not many live elsewhere. What's more, they only anoint those who live near them! If they find someone to anoint who doesn't - they usually force them to move close by. If the Wall Street Challenger wins, SBIR money will flow to the big cities on the coasts.

So what about the middle of the country and away from the big cities? If the Wall Street Challenger wins, fewer SBIR Prizes will be won there. If I were a House Rep from ANYWHERE the VCs don't hang out, I'd back the Main Street Defender!

That's what makes Markey the Magnificent so special. He's from a big city by the ocean that does have VCs hanging out. But he's not swayed by their slick talk. You other Reps need a role model? He's your guy. Follow his lead. We Main Street Defenders are proud to have him in our corner.

So, get ready for the Big Fight. Bell rings just after the Fourth of July fireworks. They're lacing up the gloves as we speak.

We'll be covering the fight on www.SBIRreauthorization.com. There will be lots of information from the SBTC and others you can use to cheer on the Defenders and try and influence the House Reps to back our cause. The more cheering and influencing we do the better.

All together now: "Follow Markey's Lead! Follow Markey's Lead!"

House Reps can be convinced if you find their WIIFM (What's In It For Me). More than anything, they want to get re-elected. They need to be able to show how they did good to protect and support those who vote for them. Give them a reason to back the Main Street Defender. Give them several reasons. We have the data you need on www.SBIRreauthorization.com.

Hang on! And get ready for a really raucous rumble!
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BIO Endorses Senate SBIR Reauthorization Bill -- Co-Sponsors Sought

2009-06-20T07:21:00.008-05:00

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They said it couldn't be done! Impossible. Never happen. But it did!

The SBIR Advocacy and the Biotechnology Industry Organization (BIO) agree on an SBIR Reauthorization bill!

In a unanimous endorsement, the Senate Small Business and Entrepreneurship (SBE) Committee passed S.1233 up to the full Senate for consideration yesterday.

BIO immediately endorsed it too, joining the SBTC in recommending its passage!

In an article that appeared on GenomeWeb.com moments after the SBE Committee's action was announced, Jim Greenwood, BIO's CEO, is cited as having lauded the Bill! That's not to say that BIO won't promote amendments, but lauding is lauding! Guess we'll just have to wait and see what ensues in the full Senate debate.

Greenwood is quoted as urging Congress to reauthorize the SBIR program "as soon as possible in a way that provides a level playing field." Oh, really? Sort of ironic, eh what! A tip of my hat to you, JG! I appreciate chutzpah, being somewhat unabashed myself!

And, way to go, SBE Committee! And especially, thank you Senators Landrieu and Snowe for leading the way on this.

OK, let's get S.1233 Co-Sponsors lined up! If we can show overwhelming bi-partisan support for this Bill, there will be intense pressure put on the House to conform to it.

There's a Call to Action for enlisting S.1233 Co-Sponsors on the www.SBIRreauthorization.com website.

You'll find a model letter, links to Senatorial contact information, and a copy of the GenomeWeb article to attach.

Any questions? OK, team, let's get busy! Everybody's in the game! Fax letters, make calls.

We can do this. Nothing is impossible. It just takes a little longer!
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It's All about Deal Flow - Where's the SBIR Money Gonna Go?

2009-06-18T06:06:00.010-05:00

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I agree with others in our Advocacy in thinking we've been focusing on the wrong message. We've been pleading not to un-level the SBIR competitive playing field. We've eloquently elaborated on the logic of fostering innovation via SBIR and being fair to start-up businesses with an idea for new technology development and no other way to get funding. Yadda yadda yadda. Good logical arguments, but they're getting little or no traction. Why not? They don't relate to what a legislator cares about -- how much money will flow to his/her State?

If companies with VC majority funding wind up getting SBIR awards, then more Federal R&D money will flow to States where companies with VC seed investment are located. Want to see a map showing the distribution? Click HERE to download it. (It's also viewable on the www.SBIRreauthorization.com website along with some tabular data and messages about it from Advocacy leaders.)

The numbers show the deal count. The colors show the dollars. The lighter the color of the state, the more VC-involved money flow. Change the SBIR eligibility rules as the House would have us do, and the States with virtually no VC deal flow will inevitably lose Federal R&D money flow. Bummer!

OK! So, who's going to vote to have fewer Federal R&D dollars coming to their State? Step up -- let's see a show of hands! (Looking around...) No one? ;-)

This message will resonate. Watch for the tell-tale furrowed brow when you show this to your Congress-person and Senators. Stress that H.R. 2767 must be amended or defeated. (See links to the text of all of the bills on www.SBIRreauthorization.com.)

BUT, DON'T FORGET THERE ARE OTHER ISSUES TO SETTLE!

The most important ones with contention:

Will we increase the Allocation Base?
The House says NO; the Senate says YES.

Will we increase the Award caps?
Both say YES, but the House wants them higher than the Senate.

Increasing the award caps without increasing the allocation base will inevitably result in a reduction of awards. Do we really want reduced deal flow? The States that get few awards will get even fewer!

Will we allow a bypass of Phase I?
The House provides a way to actually do it! The Senate doesn't.

I call this the "Missouri Clause". Phase I is a vetting step for the Agency. You say you've already demonstrated feasibility? OK... "Show Me!"

Will we allow multiple Phase IIs?
The House says YES. The Senate doesn't make such allowance.

Follow-on projects are Phase III not II. The meager funds in the allocation base should not be used for follow-on work, even if it's further development.

When will we go through this Reauthorization process again?
The House says in two years so we can assess the impact of the changes! The Senate says not 'til 2023.

Assess impact in two years? Really? How? It'll take almost a year to start the first project under new rules. Three years to finish an SBIR project. Another year to evaluate results of ANY kind, but probably three to five to get statistical validity. That's five years at a minimum, but more like eight. Two years? Get real.

I don't want us to be perceived as a one-note chorus, so help me out here. Let's see some good commentary on these other issues.

But, focus on the deal flow. Where's the money gonna go?

"Why, its gotta go to OUR State of course!" Me-yow!*
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[* See the June 14th column:
It’s all about herding cats and pushing wet noodles]

It’s all about herding cats and pushing wet noodles

2009-06-14T07:16:00.005-05:00

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I’ve always admired Howard Baker, the Tennessee Republican who led the Senate back in the 1980s. He’s frequently quoted as having likened Congressional leadership to “herding cats” and the process of enacting legislation to “pushing a wet noodle”. I never appreciated the truth of his witticisms until now.

The political process of getting legislation through the system and having laws enacted has very little to do with logic. Cats have never been swayed by logic. They respond only when they’re offered something that interests them or when they’re hungry.

What are our legislators interested in? Let’s see…I know! Getting re-elected! What gets them re-elected? Money to spend on campaigns. What they’ve done or haven’t done - unless it’s really egregious - doesn’t really seem to matter.

What are they hungry for? Let’s see...I know! Money! What's the only thing they’re allowed to use contributed money for? Their re-election campaigns! Hmmmm…

Nowhere in this mix does logic play a role. That’s our problem. We’ve been trying to herd cats using logic. Those who would reshape the SBIR Program are using money, not logic. That’s gotten the cats’ attention, and their affection. We’re ignored. Cats are really good at ignoring.

All of our arguments about how small business creates jobs and how innovation drives economic growth are immaterial to the wet noodle process of influencing policy and enacting legislation. Those at the far end of the noodle are oblivious to what’s happening at our end. They don’t feel the effects of our pushing. They’re not even aware that we are pushing!

I attended a two day NSBA meeting in Washington DC last week, their 72nd annual Washington Presentation. We were provided with two briefings – one at the White House and another at the Capitol.

The White House briefing featured people who ostensibly influence administration policy that affects small business. Mostly we heard bureaucratic rhetoric.

The economist who spoke, Jason Furman, he of the impressive resume, was largely incomprehensible to most of us. He served as Obama’s economic advisor during the presidential election campaign, and now holds a key post on the National Economic Council. Small business is merely a small statistic to him. He had no idea how to talk meaningfully to us.

Health care was promoted by Dr. Robert Kocher, President Obama’s Special Assistant on Health-Care Policy. He talked up how much better health care was going to be, including the important role of small business in creating innovative technologies and systems to improve the quality of care, etc., etc. But in response to my question about why the Administration had allowed HHS, its health care agency, to exclude small business from its ARRA Stimulus funding, he was caught flat-footed and speechless, obviously completely unaware of the situation. He actually took out his pad and jotted a note. His end of that noodle had no idea that our end was in convulsions!

The obligatory SBA speaker, Penny Pickett, is the point person in SBA Director Mills’ office for entrepreneurial development including SBIR. Mostly she talked about SBA loan programs. SBIR was only mentioned once, in passing. I was really disappointed. Kinda tells us the priority SBIR has with the SBA, doesn’t it?

The next morning, at the Capitol briefing, we, of the National Small Business Association, were addressed by no less than six Representatives and a Senator. You’d think that at least one of them would be serving on either the House or Senate Small Business Committee. Nope. How sad is that? Sure points out how important small business really is to them.

Only one speaker, Congresswoman Carolyn Maloney (D-NY), took a single question. I was privileged to ask it: “What is Congress doing to halt the attempt of larger businesses to redefine and manipulate what is meant by a “small business” to their advantage?” Her answer indicated that she did not realize that there were multiple standards for defining a small business. When I challenged her on that she actually stammered a moment before giving a stock answer and promising to look into the situation. Yeah. Right. Not a clue, and not her problem.

So, it appears the cats in the House are going to do their thing and pass (some would say steamroll) an SBIR Reauthorization bill that pleases the ones who feed them. Our logic, recitation of facts, and clamoring for attention will be ignored. We can push noodles all day long to no effect.

The bottom line: Small business is great for making popular points in political speeches. Always gets applause. But will other than token money be put up to fulfill the promises? Nope. Not by these cats.

More’s the pity.
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SBIR on the front burner - stir the pot!

2009-06-11T06:07:00.008-05:00

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After months of virtual inaction and indifference, the House Small Business Committee has finally put SBIR on the front burner. The Committee is in the process of marking up four separate bills that address SBIR reauthorization. The intent, we're told, is to eventually combine them into a single bill and send it up to the full House for approval.

On first glance, this is almost a de-ja-vu of last year's H.R. 5819 that died (thankfully) without being enacted. But there are a few differences that tells us they have been listening.

The big same-old is that despite our best efforts and the entreaties of over forty House members that SBIR eligibility requirements not change, the VCs are evidently getting their way. Would we really expect different? After all, no small businesses have been invited to testify to the Small Business Committee on this subject.

The four bills being marked up are:

H.R. 2769, “Commercializing Small Business Research and Development Act”
H.R. 2767, “Investing in Tomorrow’s Technology Act”
H.R. 2772, “SBIR and STTR Enhancement Act”
H.R. 2747, “Rural Technology Development and Outreach Act”

Got opinions? Stir the pot by calling, emailing, or better yet, faxing all the Representatives on the Small Business Committee ASAP! No time for form letters. Just make your opinion known.

[Added 6/12: Actually, fellow advocist Jonathan Pearl has provided a model letter -- see Comment #3!]

Then get the word to your Representative and everyone else in the House that you might influence that small business is being threatened. Don't let them just ramrod this through again.

Links to data files of legislator contact information is on www.SBIRreauthorization.com.

[Added 6/13 : Note - some excellent comments have been submitted since this was first published. Be sure to read them, and feel free to add your own!]
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NIH Tosses Small Business a Few Crumbs

2009-06-04T17:23:00.005-05:00

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I'm not ungrateful. Really. Small technology businesses appreciate any funding opportunities, and the NIH is doing the right thing. But why did it take so long for them to do it? And why is it so pitifully small?

Want to see what they tossed us for Stimulus-funded SBIRs?: RFA-OD-09-009, Recovery Act Limited Competition: Small Business Catalyst Awards for Accelerating Innovative Research

Small business (via SBIR) should have been allocated 2.5% of the NIH's Stimulus pop for R&D. That's something over $200 million. What are they offering us? $5 million. (Hmmmm.... That's 2.5% of 2.5%! Huh! Coincidence or are they sending us a not-so-subtle message?) Funding on these is for up to one year not to exceed $200K. That means a scant 25 awards. Big deal.

Yeah, there's an alleged pot sweetener. Another $35 million to "Spur the Acceleration of New Technologies". But this isn't a small-business only competition. Sure, we can apply. Gee, thanks. Another Challenge Grant-type competition?

Here's that announcement: RFA-OD-09-008, Recovery Act Limited Competition: Biomedical Research, Development, and Growth to Spur the Acceleration of New Technologies (BRDG-SPAN) Pilot Program

Well, whaddya know? Valley of Death funding! This is a whole new category for NIH, and I do congratulate them for introducing this. It's a good start. For a company extending SBIR funded technology, to get this award means it's a Phase III by definition. But it's not limited to SBIR funded companies or subject to SBIR eligibility rules. It's NOT an SBIR program. It even has a new NIH Grant Code: RC3.

You see, there's some interesting wording in the Eligibility section that says: "Applications received under this FOA may be given funding priority if the applicant is associated with an enterprise/commercial organization that is of small size (e.g., 500 or fewer employees), and/or of limited resources, such as an early-stage company, and/or one positioned for receiving funding or in-kind support from a third-party investor and/or strategic partner, etc." The key words are "MAY BE given funding priority". And there sure are a lot of conditions to be sorted out by the NIH funding decision makers.

A friend of mine is the savvy CEO of a small bio-tech company that has won several SBIR awards. He recently made the following very astute observation: "For many years the SBTC and others opposed to BIO’s legislative efforts have argued that VC owned firms should procure NIH funding from outside the SBIR set aside. BIO and NIH have always responded that there are no business funding opportunities outside of SBIR. This new RC3 program -- not SBIR -- is precisely where VC owned firms should be competing for NIH support."

Indeed, there's enough on the table here to attract a VC funded (dare I say controlled) company -- $3 million over 3 years. Much better than SBIR and more focused on where they probably are in their product development life-cycle.

RC3 is a new sandbox for the bigger boys to play in. (Now will you please stay out of ours?) How this new NIH funding category will color the SBIR Reauthorization debate remains to be seen.

But we have had some crumbs tossed our way, so let's get busy. Due date for grant applications in both of these programs is September 1st.
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Are you one of America's Most Promising Companies?

2009-05-21T16:40:00.015-05:00

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We all think we're special. Small technology businesses especially think so. Companies who win SBIR awards ARE special! Well, anyhow, they've won a limited funding competition. But does that mean they're going to be successful beyond an R&D effort? Not without having a lot of other factors be aligned. What are those factors? What makes one company more "promising" than another? And how does that translate to future fundability?

Forbes is curious to find out. So they've teamed with The Venture Alliance (TVA) to survey lots of small companies, do some assessment, and "identify the most promising of the bunch".

I read about this today in my issue of NetNews, the weekly newsletter of the National Association of Seed and Venture Funds (NASVF). Here's what it says:

TVA has developed a scoring algorithm based on a range of variables that determine a company's potential--and, ultimately, its worth to investors---including financial projections, current capitalization, market opportunity, intellectual property, management experience and others.

TVA crunches that data (which it collects via the survey) and reduces it to a "fundability score." Companies that score high theoretically have a better shot at raising money than those who don't.

TVA will do an analysis and produce a visual "Radar Graph" mapping that looks like this:

Those with top ratings will be considered for a spot on Forbes' upcoming list of America's Most Promising Companies. They will also be offered the opportunity to raise additional capital through TVA.

Here's the link to the survey: http://www.forbes.com/ampcSurvey/questionnaire.html

This is cool stuff! I'm going to combine this with my trademarked Funding Readiness Level (FRL)® index and really be able to provide my SBIR clients with a dose of realism that provides clues to exactly what has to be worked on to improve future "fundability" for commercialization.
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Small Bio speaks out on changing the SBIR eligibility rules

2009-05-15T05:10:00.008-05:00

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Watch out BIG BIO, small bio has a bigger voice than you might think! Responding to the call to action from the SBTC, a group of FIFTY small biotech and medical device businesses have signed a letter to Chairman David Wu (House Science & Technology’s Technology & Innovation Subcommittee) saying, in effect, “BIG BIO doesn’t speak for us! Changing the SBIR rules will be harmful to the innovation economy being supported by the majority of small biotech businesses!”

Here’s the body of their letter:

The undersigned leaders of small biotechnology and medical device companies from throughout the U.S. respectfully request your assistance in opposing legislation that would give companies owned by venture capital (VC) firms unlimited access to the SBIR program.

Last year the House of Representatives passed HR 5819 that, if it had become law, would likely have permitted companies with tens of millions in financing to win an unlimited number of SBIR grants of unlimited dollar amounts. NIH grant reviewers in particular typically give significant weight to the preliminary data generated by applicants. Exceptionally well capitalized companies with expansive laboratory infrastructure and scientific personnel necessarily have an advantage in competing for these awards.

If VC owned firms are permitted to win the lion’s share of the mere 2.8% SBIR/ STTR set aside this would effectively shut out most of the small companies for which the SBIR program was originally created. This would have profound consequences to our nation’s economy and health care system. Companies in fields traditionally out of favor with VC firms, including vaccine development, orphan diseases, biodefense, diagnostics, research tools, and most early stage, high risk R&D, but which play a critical role in solving technical challenges facing the US, will be particularly disadvantaged if deep pocketed VC owned companies are permitted to usurp the SBIR program.

To the extent that the law is changed to permit more VC participation in SBIR it is imperative that safeguards be put in place to protect access to the program by firms that lack VC financing. These safeguards should include, at a minimum, the following:

(1) Caps on award size and total dollars awarded to any one firm should be established. Agencies would be permitted to exceed these caps only with funds taken from outside of the SBIR/STTR set aside;
(2) Limits should be placed on the overall percentage of the SBIR pool that may go to VC owned firms for at least the first few years to gauge the impact and any consequences of these changes;
(3) The SBIR/STTR set aside should be increased by at least a few percentage points to compensate for the increased competition in the program.

The above protections would expand access to the SBIR program while protecting small biotech companies that do not have VC investors, which includes the vast majority of emerging biotech firms.

Thank you for your consideration of our views.

Unlike others who have already made up their minds without knowing all the facts, Chairman Wu has been open to hearing both sides of this debate, and we applaud his refreshing willingness to include small businesses in discussions that involve them. Gee, what a concept!

If you agree with these sentiments, please copy the letter onto your own letterhead, add your own words for emphasis, and send it off to your Congressional Representatives and Senators. You’ll find contact information on www.SBIRreauthorization.com. You’ll also find this letter there complete with the fifty original signatories.

The National Small Business Association (NSBA) will hold its annual Washington Presentation, which includes a White House briefing, on June 9th and 10th. This year the focus will be on SBIR Reauthorization and Economic Stimulus procurement opportunities. The SBIR Coach will be there. See details at http://www.nsba.biz/wp. You’re invited to join us.
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Should the NIH be allowed to play by different SBIR rules?

2009-05-05T05:46:00.007-05:00

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It's the issue that just won't go away. Eligibility for SBIR awards for VC controlled companies.

Will somebody please tell me why companies that now have received millions of dollars of outside investment would even care about grabbing a relatively few thousand dollars of grants intended for startups.

Reminds me of the rich bully on the playground stealing lunch money from the weaker and poorer kids.

The Small Business Technology Council (SBTC) sent out an appeal to its membership yesterday. I'm going to provide it verbatim:

Sign on to the NIH Letter Today!

During a recent hearing SBTC Executive Director Jere Glover testified before the Technology and Innovation Subcommittee of the House of Representatives’ Science and Technology Committee. Glover documented the success of the federal Small Business Innovation Research (SBIR) Program, which is due for renewal by Congress.

During the hearing Chairman David Wu (D-Ore.) suggested a compromise that would allow National Institute of Health (NIH) applicants to be exempt from affiliation rules preventing large venture capital (VC) owned companies from participating in the SBIR program, while keeping the restrictions in place for all other agencies. Glover objected to this compromise, pointing out that many small biotech companies oppose VC involvement in the SBIR, including those in the SBTC membership.

In response to this, an SBTC NIH member has drafted a letter to send to Rep. Wu urging him not to allow VC owned companies unrestricted access to the SBIR program. SBTC would like as many biotech and medical device firms as possible to sign on to this letter to show Wu that opposition to VC involvement in this program is not just limited to Department of Defense (DoD) awardees.

If you are a NIH awardee and would like your name on this letter, please send an email to Alec Orban.

Take Action Today!

View the NIH Letter
View Jere Glovers Testimony
Sign on to the NIH Letter

OK, here's your chance to voice your opinion. If you're a "biotech or medical device" company and wish to sign onto the letter, click the links above and do so.

If you have a good reason that you don't want to sign the letter (other than not wanting to stick your neck out), please use the Comments feature on this Blog and tell me your reasoning. I really want to understand the underlying thinking here.

My position on the VC issue is well documented. I am opposed to changing the eligibility rules. However, I'm a realist. If we must compromise on this in order to get SBIR reauthorized, than so be it. But let's do it smart and not fundamentally change the program.

So, convince me it's a good idea to broaden SBIR eligibility. Even selectively.

And please cut the crap about having had eligibility "taken away". We all know that really isn't true.
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SBIR Reauthorization – What are the issues?

2009-05-01T06:11:00.004-05:00

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Only three months to go. Time to get serious. The House has begun the process. With any luck our legislators will actually pay attention to the issues, learn the truth, and improve the SBIR Program. We’ve got a tough battle facing us to overcome the lies being told and perception management techniques being used against us.

I actually had an Austin Business Journal reporter call me yesterday and ask me what I thought about the fact that “venture capital participating small businesses would have to leave their drug discovery innovations on the shelf because they couldn’t qualify for SBIR awards any more”.

Oh, Good Grief! She said she got the premise for the story from a Washington DC sister publication. Perception management strikes again. Boy did I give her an earful of the truth. Can’t wait to see what she actually writes in the story she said would be published today.

The VC issue dominates the SBIR reauthorization landscape. It’s important, yes. But it’s not the only issue. In a series of upcoming columns I’m going to highlight each of the issues, and shed some light on what’s important about them. Hopefully it will spur some comments and engage some debate.

Here’s the list of SBIR Reauthorization issues:

1. Eligibility (who may compete for awards)
2. Agency Allocation Base (% of R&D set-aside)
3. Award Caps for Phase I and II
4. Phase I bypassing – should it be permitted?
5. Multiple Phase II awards
6. Phase III funding and required support
7. State (FAST) and Rural Outreach support
8. Funding for SBIR/STTR administration costs
9. Streamlining the process of review and award
10. Special technology priority mandates
11. How long until we reauthorize again?

Some are more contentious than others, but all are important. We’ll discuss them one by one over the next few weeks.

I can see from this Blog’s analytics that we’re being monitored by those in Congress who really want to know what all sides think, so if you have an opinion here’s your chance to be heard. I’ll publish a comment that intelligently approaches an issue, whether or not I agree with it.

Rick Shindell published an issue of his SBIR Insider last evening. Lots of good info about what went on in those House hearings last week, including a video of Jere Glover’s testimony.

And, Rich Hendel sent out Boeing’s NSF SBIR topic interest list a few days ago. I expect to see the DOD 2009.2 interest list any day now. Write me if you’d like a copy of either of these.

Remember to keep up with what’s going on at www.SBIRreauthorization.com

Finally, today’s my lovely wife Kay’s birthday, and I’m taking the rest of the day off to pay some attention to her, including dinner out and some Country/Western dancing this evening at Billy Bob’s. She’s so patient with all of my SBIR travails, I just wanted to recognize her and have y’all join me in wishing her a Happy Birthday!
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House begins deliberations on SBIR Reauthorization

2009-04-24T04:11:00.017-05:00

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The House of Representatives began deliberations this week on reauthorizing SBIR. Two House Committees held hearings.

The Small Business Committee met on Wednesday. They actually did allow a few small businesses to testify. (Press Release, Written Testimony, Video of Hearing)

Jere Glover testified yesterday at the Science and Technology (S&T) Committee's Technology and Innovation (T&I) Subcommittee hearing. (Press Release, Written Testimony, Video of Hearing - coming soon)

I talked to Jere yesterday after his testimony. He said that, by and large, the hearings went well. We're being ~~included in discussions~~ invited to testify for the first time in two years, and that's progress.

There's a new letter from S&T/T&I Subcommittee Chairman David Wu (D-OR) rumored to be circulating countering our Dear Colleague letter to Chairwoman Velazquez and promoting ~~reintroducing of H.R.5819~~ support of provisions similar to what were in H.R.5819. After the hearing, Chairman Wu admitted that he learned some new facts ~~and probably would change his stance on that~~. I certainly hope that hearing all sides of the story will prompt him to change his stance on that.

[Curious about the strikeouts? -- Sorry, Chairman Wu. Didn't mean to misquote you. -- See the Comments...]

When I visited some congressional offices on the Hill earlier this year, I saw a booklet available in every office: "How Our Laws Are Made". I leafed through it and laughingly said that there should be a subtitle: "Like a Visit to the Sausage Factory -- you really don't want to know!"

The process is ponderous, with lots of rules that permit strange shenanigans and partisan interests to get their way. We must be cognizant of how things work, and play the game smartly. Being persistent and factual (always providing references) is the way we'll get our message through. The staffers are the key. Educate them and they'll advise their bosses.

Jere promises that the SBTC website will have some new information up in a few days. I'm sure Rick Shindell's Insider will provide some insight soon.

I'll have some more analysis of all of this in a few days, and some recommendations on strategy, but I wanted everyone to have a good source of facts on what's going on. Your comments are always welcome.
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Fast Funding for Forensics from our friends at the DOD

2009-04-16T12:48:00.009-05:00

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Ever watch CSI? Bones? NCIS? Cold Case? Probably, as these are some of today's most popular TV shows. What do they have in common? Forensics. Playing detective. Analyzing evidence. Establishing facts. Solving crimes. Prosecuting bad guys. Cool stuff! But what does this have to do with getting money for technology development? According to the DOD -- a lot!

Yes, that’s right. The Department of Defense wants to pay you for being a forensic technologist. They have money to spend on this, and are ready to write the checks. All you need is a good idea and the capability for developing some new techniques for establishing facts in DOD's battlefield environments -- "Battlefield Forensics".

Not only that, but you don't have to write a detailed and lengthy proposal, use a complicated submission web site, nor wait a long time for an answer. Can you say "fast funding"?

Wow! This isn't your typical SBIR project! No submission deadline to meet. Fast response. Pays more right at the start. And they say you won't need special "government accounting compliant" systems either!

Sounds almost too good to be true. But the DOD says it isn't fooling around. Terrorism is the current high priority target. They want good ideas to gather facts to bring terrorists and war criminals to justice. And they want to implement them fast.

The guy in charge of this is Dave Edwards. He works in the DOD's Rapid Reaction Technology Office. I met Dave at the World's Best Technologies Showcase Conference last month, and had a chance to ask him some questions about this new initiative they call the "Open Business Cell"...

Q: What's this all about, Dave?

A: Well Fred, it’s a small pilot program in DOD that seeks to find and engage new or “non-traditional” companies, engineers, innovators, and scientists. We want them to provide their best ideas and build prototypes to help DOD resolve some high priority needs.

Q: How will you do that?

A: Two ways. First we have a helpful website called DefenseSolutions.gov that identifies the needs. Our current priority need is for Battlefield Forensics. After the best ideas are selected, we will use a funding mechanism called Other Transactions, the government's version of a commercial contract (no special accounting needed), to get people working on these “best” ideas quickly. We will be funding them to rapidly produce functioning prototypes to turn their ideas into reality.

Q: Battlefield Forensics? Is that anything like what we see on CSI?

A: Sorry, but it's not the high-tech laboratory drama you see on television. Battlefield Forensics is the rough and ready business of quickly collecting evidence or indicators of the activities of terrorists and war criminals so we can identify and pursue them. On the battlefield, we may not have the luxury of extended time at the scene, exhaustive coverage of an entire site, or the trained personnel and specialized equipment we need to collect evidence. We need to develop simple and effective equipment and methodologies to gather data and establish facts. So while it's not CSI, it is applied forensic science and engineering.

Q: If I submit an idea, how is it evaluated?

A: When your idea is received it is forwarded to our subject matter experts for analysis. Those who offer really good “on target” ideas will be asked to send in more detailed information about how they would produce their prototype, what it would cost, when it can be delivered, how it will be tested, etc. From among this select handful, the most promising will be funded immediately.

Q: What's a typical project's budget and schedule?

A: There's no set limits. But we expect the funding for a project to be in the $300-500K range for 1-2 years, with a preferred short-term completion schedule. The faster the better.

Q: What about non-disclosure agreements?

A: Not to worry. When you submit an idea using the form at DefenseSolutions.gov, your idea is protected from disclosure. No competitors will see it and only government personnel will evaluate it. By law, it cannot be disclosed even under a Freedom of Information Act (FOIA) request. The website has information about this.

Q. OK, I'm ready to submit my idea. How do I do that?

A. Easy. Find the "Submit Your Idea" button on the website. Fill in the web form. That's all it takes. We'll get back to you in less than 30-days.

Q. When will you be posting other areas of interest?

A. Soon. We call them "themes". Subscribe to our ListServ, and we'll let you know when a new theme is posted. Signup is on the website.

This is really cool, Dave. Fast response, not a lot of paperwork, and minimal accounting needed? I hope this works, and serves as a model for other programs to follow.

So, go look at Dave's website (http://www.DefenseSolutions.gov/) and see what Battlefield Forensics is all about. (For ideas, do Google searches on the term too.) If you have questions, email Dave at Idea@DefenseSolutions.gov.
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SBIR support momentum increasing in the House of Representatives

2009-04-15T12:28:00.005-05:00

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Who said that small business has a small voice? Together our voices are raising a din and the House of Representatives is hearing us.

More and more members of the House are joining in co-signing the letter to Small Business Committee Chairwoman Nydia Velazquez urging her to not change the SBIR eleigibility rules in the soon to be debated and (hopefully) enacted SBIR Reauthorization legislation.

As of Noon today, the count was up to 21, and growing. See the latest count HERE.

Ann Eskesen has mobilized SBIR awardees from all over the country, and she issued a very important message to her mailing list today. For those of you who aren't on that list, you can see the message on http://www.sbirreauthorization.com/.

For background, see my Blog column of March 29th: Small Business Advocacy Mobilizing Peer Pressure on Velazquez for First Step in SBIR Reauthorization.

We have some more time to get more signatures so please keep the pressure on.

Ann's key message today was that: "Members [of the House] need to become stakeholders in the effective functioning of SBIR in their Districts – and that means, in part, they must be told their local story and sold on the idea that SBIR is a fundamental element in the health of the economy both in their immediate area and nationwide. This is a very different way to think and talk about SBIR but it is the right way."

Monitor http://www.sbirreauthorization.com/ for daily updates.
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New Hope on the Horizon for Getting Through the Valley of Death

2009-04-10T06:48:00.008-05:00

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Ever wonder where a week went? This was one of those. Fast and furious. Some things were extraordinarily frustrating. Others were exciting and invigorating. All of them had to do with energizing our American Innovation Economy. The most exciting was that Valley of Death thing, but I'll start with the frustration: NIH. Who else?

Monday was the due date to submit SBIR and STTR proposals to the NIH. I had several clients who struggled with the submission process for DAYS! The Grants.gov portal seemed clogged much of the time, and it took forever for information to move between it and the NIH's eRA Commons.

There are ALWAYS errors to fix, most of them trivial, and NONE of them have anything to do with the project itself. Each time you are forced to cycle through the morass again. So frustrating! (Has anyone figured out a sure-fire way of figuring out the proper "Federal Identifier" to use?)

The NIH claims proposal volume is down. Hmmm... wonder if it has anything to do with how difficult it is to get proposals submitted? Submitting to DOD is so easy in comparison -- and their proposal volume is up! Hmmmm...

I'm standing by my prediction that April 27th (the Challenge Grant due date) will be the Grants.gov Armageddon.

And then there's the NIH SBIR Stimulus Exclusion. The NIH just doesn't seem to get the Innovation Economy concept, or doesn't think it involves them. Basically they don't think small business deserves ANY of their R&D money. They cite all kinds of statistics to justify their position.

Bull-frog-feathers! I used to be a statistician, and I know how easy it is to manipulate data to support a premise.

The Senate Small Business Committee had a "meeting" with the NIH this week to discuss the situation (since congress is in recess it couldn't be called a "hearing".). The meeting was inconclusive (aren't they all?), but happily for us, the Senate isn't buying what the NIH is selling. More discussions are scheduled. Stay tuned. This isn't over by a long shot!

OK, now for what's been exciting and invigorating....

On Monday, the National Association of Seed and Venture Funds (NASVF) announced the intent, in a joint venture with a dynamic "innovation intermediary", Innovation America (IA), to create a National Innovation Seed Fund of Funds to help fill the investment gap faced by entreprenurial companies seeking to get through what's known as the "Valley of Death".

You can download the press release from my website, but here's a SHORTCUT. I'm a member of NASVF, and will be serving on its Public Policy Committee to help put this plan together.

This is big stuff. A Fund of Funds seeds other investment funds. The magnitude of numbers being talked about are using $Bs not $Ms. Control will be regional, closer to where the entrepreneurial companies are and where the investments will be made.

Read the NASVF's April 9th issue of NetNews and peruse the presentation on IA's website for details. Lots to be worked out. Stay tuned on this too.

By the way, Jim Jaffe, NASVF's CEO, and Richard Bendis, CEO of Innovation America, are both actively involved in the SBIR Reauthorization Advocacy. Good guys, both of them, and I'm proud to have been invited to join their team.

And then yesterday we dedicated The Center for Innovation at Arlington (I serve as their Business Coach). Texas' Senior Senator Kay Bailey Hutchison and Arlington's long-time House of Representatives legislator, Joe Barton, were there to help cut the ribbon. Both had been instrumental in making the Center become a reality. Read the press release HERE.

We are also involved in the Innovation Economy, but our scope is broader than just seed funding. We're looking at increasing investment deal flow at ALL levels for the entire mid-section of the country, attracting investors to locate in North Texas, and attracting executive talent to the region.

It also involves creating a Fund of Funds. I'm right in the middle of this big stuff too. More to stay tuned on.

I'm ready for a long weekend! Have a great Easter and Passover break.
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NIH Doesn't Budge on Excluding SBIR from Stimulus Money

2009-04-03T15:02:00.021-05:00

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They really have no shame. The NIH, I mean.

Senators Landrieu and Snowe finally got a response to the letter they sent them. Want to read it? It's a masterpiece of bureaucratic doublespeak. Click HERE to retrieve it. It took them over three weeks to write this?

The key words are: "In addition to" in the sentence: "In addition to applying for funding through the SBIR/STTR program, small businesses are also eligible to apply for NIH funding through grant opportunities supported by ARRA...".

Never mind these ARRA opportunities are open to big businesses, universities, and every other organization under the sun.

And those "Challenge Grants"! Oy! Mark my words... they'll see 20,000+ applications for those 200 grants. Maybe a token 2.5% will go to small business - 5 awards! And I predict Grants.gov will implode on April 27th under the submission onslaught. It took one of my clients nearly 24 hours to upload their NIH proposal this week! If they're having this sort of problem now...

They even promise small business will have "appropriate representation ... on [challenge grant] scientific review groups". Hmmm, appropriate, eh? Let's see.... 2.5% of a 20-member committee is half a person. Wonder if they'll round up or down?

If you didn't know better, you'd think they really cared about small business. I'll say it again: they really have no shame.

The sad fact is the NIH is technically correct in taking this position on not increasing "its FY2009 appropriated" funding base. Their FY2009 SBIR/STTR Allocation Base is determined as percentages of their total FY2008 extramural R&D expenditures, and the ARRA funding doesn't affect that.

Basically, it's letter vs. spirit of the law. Stimulus is needed now and we're ready to do the work.

None of the other agencies saw fit to deliberately cut small business out of their extra money.

Who's going to tell the NIH to behave responsibly? The exclusion they snuck in has been signed into law, behind the backs of the Small Business Committees and without informing the President what he was signing.

Congress could repeal the exclusion, but do they have the fortitude to pass a bill that does that? Probably not.

Does President Obama have the authority to issue an Executive Order eliminating the exclusion? Probably not, but then I didn't think he had the authority to fire the head of a major corporation either.

We'll see what the NIH does in FY2010, when their TOTAL extramural R&D expenditures will include ARRA funding, and, as the Senate letter pointed out, the ARRA exclusion doesn't change the total!

Well, Senators Landrieu and Snowe - whatcha gonna do with this? Take them to task, or let them get away with sneaking around you? And Senators Feingold and Cardin - did you get a similar response to your letter?

We're counting on you, the congressional Committees who officially represent Small Business, to right this wrong. Please don't let us down.

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UPDATE: Sunday, April 5, 2009. I faxed a copy of this column to all members of the House and Senate Small Business Committees today. Any of you who feel so inclined should also raise some dust over this. Data files of contact information in three formats are on http://www.sbirreauthorization.com/. The more voices raised, the more likely they are to do something. And, at the very least, their awareness of SBIR and its importance to the high-tech small business community will be enhanced.
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Would VC Control Stifle the Innovation in SBIR?

2009-04-01T05:55:00.006-05:00

The SBIR advocacy is mobilized. Dozens of small business owners are now focused on raising the level of awareness of the importance of SBIR to our legislators in the House of Representatives. Our immediate focus is ensuring that there will be a full SBIR reauthorization debate this time around, and that we will be included in it. (See http://www.SBIRreauthorization.com/ for details.)

Central to the debate is whether VC controlled small businesses should be eligible to compete for SBIR awards. Some say it's a good idea, others say it's not. Both sides have compelling arguments. Both sides claim that their position will ensure SBIR Program "success". But, what is that?

The problem is that we've never really settled on what is SBIR success. Is it how many tough problems got solved? Is it how many small businesses got started with SBIR as seed funding? Is it how many high-paying jobs got created? Is it maximizing ROI for the funding agency? Is it how many patents get filed? Is it how much revenue is generated by the awardees in commercialization? Is it how many SBIR funded companies get acquired or go public? Is it all of the above or none of the above? The fact is that no one has ever come up with a universally accepted answer to this. I've seen every one of the above cited as the critical success factor. SBIR success is in the eyes of the beholder.

I'm going to use my Blog as a forum for exploring this, as the better we understand all of these perspectives, the better we'll be able to provide persuasive opinion to our legislators, and, hopefully, guide the improvement of SBIR.

Our first guest columnist is Jonathan Pearl. The subject is innovation, and whether a VC controlled company still cares about that...

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The difference between a VC and a small business: why SBIR is not the venue for supporting Venture Capitalists, by Jonathan Pearl

In a letter dated March 11, 2009, on the FY 2010 proposed budget, House Small Business Committee Chairwoman Representative Nydia Velazquez argues that: "The SBA should permit venture capital-backed small businesses to be able to fully participate in the Small Business Innovation Research program."

I laud Representative Velazquez her energy and commitment to supporting innovation and its benefits for the nation's economy, but I question the specifics of her case. By the rules of the SBA regarding the definition of a small business, nothing prevents venture capital-backed companies from fully participating in SBIR. The rules however require that small businesses be majority-owned by individuals, meaning simply that venture-capital groups can not own a majority stake in a small business eligible to compete for SBIR funding.

Venture capital firms typically have far greater resources than small businesses, providing an unfair advantage because those resources can be expended in the proposal stage. Many truly small firms may find the time and money needed to compete in such a field prohibitive, regardless of the worthiness of their proposed efforts. The unfortunate consequence of permitting firms majority-owned by VCs to compete against startups may be to stifle the innovation SBIR seeks to promote.

Representative Velazquez continues: "Such participation is essential for high-growth small firms seeking capital, particularly during this period of economic weakness."

The argument appears to be that the capital needed by high-growth small firms can only be provided by venture capital groups taking a majority-stake in their businesses. To be sure, venture capital serves a useful function in society. Venture groups can provide an influx of capital for high-growth ventures. Their motivation however is financial gain, not necessarily innovation. They seek a high return for their investments. There is nothing wrong with the profit motive, it simply should not be subsidized by public coffers. Allowing VC majority-owned firms to tap into SBIR resources is akin to providing TARP funds to remodel executive offices. It's the wrong course.

Entrepreneurship and small business innovation are critical for our economy and inestimably beneficial to society. Researcher entrepreneurs are most often motivated by a passion, driven by their ideas to solve problems in innovative ways. Their incentive is both innovation for its own sake and the financial gains that accrue from filling an unserved need. This juxtaposition of overlapping motives keeps innovation at the forefront. SBIR allows federal agencies to define their own high-priority needs.

It has been suggested that some agency administrators are concerned over difficulty identifying enough high-quality proposals to support even current levels of SBIR allocations. It is odd that Representative Velazquez would argue that many SBIR-awarded small firms need a greater influx of capital while agency administrators are concerned over not being able to spend all of their SBIR funding.

I would think the solution to both concerns can be managed without expanding SBA rules that define small businesses to include majority ownership by venture capital groups, or excluding small businesses from the efforts to stimulate economic activity:

1. Maintain SBA rules that require majority-ownership by individuals.

2. Permit agencies some discretion to provide additional capital where needed. Capital-intensive programs like some at NIH could be enhanced by permitting the sponsoring agency to spend some of their SBIR funding for providing necessary facilities or materials to SBIR-awardees, without overinflating the individual awards. Alternatively, the agencies could be allowed some discretion in providing additional amounts (in excess of the base award) for materials and facilities that may be necessary for successful execution of the project. Oversight would be key in this case, to ensure that SBIR expenditures are maintained to support SBIR efforts, for instance that residual materials or equipment be retained for future use by SBIR projects.

3. Further, if there is concern that the costs associated with administering a large number of small awards is unfunded, a reasonable percentage of the SBIR Base Allocation can be specifically earmarked for this purpose, allaying agencies' resistance to potential increases to the percentages for SBIR Base Allocations.

Finally, I wish to argue that America is not at a lack for innovative ideas. If agencies are failing to receive a sufficient quantity of worthy proposals, the solution must lie in publicizing the availability of these programs where they will most garner an appropriate response.

This nation has a shamefully high number of unemployed and underemployed PhDs from across the spectrum of fields, who could provide the innovation we so desperately need to rise above our current crises. We have done an abysmal job of employing these valuable individuals in our institutions of higher learning. There are too few positions available for would-be professors, leaving thousands without an outlet for their creativity. Why not tap this resource? Improving and expanding SBIR, without losing its focus on innovation, is the first step.

Jonathan G. Secora Pearl, PhD, President
Perceptral LLC; Racine, Wisconsin
http://www.perceptral.com/
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Comments anyone?

If you'd like to have your opinion included here, send me a well constructed essay (please try to keep it below 750 words) and I'll consider posting it.

[In one of our advocacy conference calls a gentleman from Boston spoke quite eloquently about why eligibility of VC controled companies would be a good idea. I didn't get his name. If you know who that was, please have him contact me.]
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Small Business Advocacy Mobilizing Peer Pressure on Velazquez for First Step in SBIR Reauthorization

2009-03-29T05:35:00.008-05:00

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All right folks, it's time to get serious. We got our continuing resolution, but with only four months of breathing room, we have to move fast. Like all revenue related legislation, SBIR Reauthorization must originate in the House of Representatives. And the bill will be introduced via the House Small Business Committee. That means dealing with Chairwoman Nydia Velazquez (D-NY).

So, we're mobilizing a letter and phone campaign. The ultimate goal is to persuade Chairwoman Velazquez, via peer pressure, to not change the SBIR eligibilty rules. It's mobilizing the peer pressure that's the object of the current campaign.

For those of you not familiar with all of this, the current rules limit SBIR eligibility to small businesses that are "at least 51 percent owned and controlled by one or more individuals". This precludes participation by companies that are majority owned by Venture Capital firms. In the past, Chairwoman Velazquez has adamantly promoted a change in the rules for SBIR eligibility that would allow unlimited participation by VC controlled small businesses. For the most part, it was that issue that derailed reauthorization last year. This won't be easy.

We have the support of some very good allies for this effort. A "Dear Colleague" letter signed by Representatives Edward Markey (D-MA), Niki Tsongas (D-MA), Peter Welch (D-VT), and Paul Hodes (D-NH) was sent recently to all of their fellow Members of the House of Representatives. The letter urges them to join in co-signing a letter to Chairwoman Velazquez, which will, in turn, urge her to "support preservation of the SBIR eligibility requirements in the current statute".

Our leader, Jere Glover, Executive Director of the Small Business Technology Council (SBTC), has just released a Legislative Action Plan for small business advocists everywhere to contact their House Representative and urge him or her to join in co-signing the letter to Chairwoman Velazquez.

The SBTC will be hosting a National Conference Call on Tuesday, March 31st, at 11AM EDT to discuss this peer-pressure strategy and how we can help build the pressure. The call-in number is 616-712-8000 (code 727524#). Please join us. And, please also consider joining the SBTC. All this work costs them money!

We really have to get this done THIS WEEK. Jere says that the deadline for getting signatories is April 10th, but Congress officially begins their two-week Easter Recess on Monday the 6th, so for all practical purposes, do what it takes to get the word to your home and office congressional district's Representative by Friday, April 3rd.

This is only the first step in this battle. We'll need to stay vigilant and be ready to debate with facts and strength of numbers in order to get a Reauthorization Bill that will truly improve the SBIR Program. I'll do my best to keep you informed. I've even created a special URL to take you quickly to my SBIR Coach wesbsite's SBIR Reauthorization section: www.SBIRreauthorization.com.

So, for the full story on what's going on, including a recitiation of the issues, the most up-to-date version of the SBTC's Legislative Action Plan, current lobbying and advocacy activities, copies of all the letters mentioned above, template letters to tailor and send, contact information for legislators, links to other sources of information, and some personal recommendations from The Coach, monitor www.SBIRreauthorization.com.
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NIH Slowly and Reluctantly Yielding to SBIR Pressure on Stimulus Funding

2009-03-27T06:50:00.006-05:00

Letter writing works! A small victory was won by small business yesterday, as The National Institute of Neurological Disorders and Stroke (NINDS), an NIH component, has reversed their previous decision to deny SBIR granted companies receipt of Stimulus funds for "administrative supplements" per the exclusion that was included in the ARRA Stimulus Bill. These supplements were announced on March 16th in NIH Notice NOT-OD-09-056, and are designed to "promote job creation and economic development along with accelerating the pace and achievement of scientific research". Nineteen other NIH Instutues had already decided to allow the granting of supplements to SBIR grantees despite the exclusion.

A letter writing campaign, spearheaded by a Seattle small business called Icogenex, produced a reversal of policy from Dr. Story Landis, NINDS Director, who said, in a brief note to Fred Hagen, Icogenex CEO, "This is to let you know that the NINDS will now accept requests for supplements from grantees with SBIR and STTR funding. The new information should appear on our website in the next day or two". We applaud Dr, Landis' decison and encourage all NIH Institutes to follow her lead.

However, we still have not seen where the NIH or the HHS has complied with the Senate's request for a written response to how they will be funding additional new SBIR and STTR projects despite the ARRA exclusion. If a letter has been received by Senator Landrieu's Small Business and Entrepreneurship Committee, they have not shared it with us as of the time of this posting. If anyone knows of such a response, please let us know.

But the lesson here, is that, again, a letter writing campaign has produced positive results. We're going to continue to use this approach in the SBIR Reauthorization effort that's about to be launched. Keep up with the progress and get template letters at www.SBIRreauthorization.com.

And, in a related note, I had the distinct pleasure of spending a good deal of time with Jim Jaffe and Kelly O'Day of the National Association of Seed and Venture Funds (NASVF) at the World's Best Technologies Showcase conference that was held this week in Arlington, TX. We found much that we agree upon, including the basic issues involved in the SBIR Reauthorization debate, and they will be encouraging an attitude of reason and compromise to their VC membership as the SBIR debate unfolds. I became a member of NASVF this week, and plan to be an active contributor to their mission.

PS: Due to a bad link in a newsletter that features my columns, some of you wrote me that you were unable to read my "Movers and Shakers" column of March 18th. Click HERE to see the full posting.

Movers and Shakers

2009-03-18T08:16:00.005-05:00

Y'all know that I'm a shaker-upper. Well, I've decided that I'm going to support the SBIR Reauthorization process in a more proactive way, and really do something to move it along.

In addition to this Blog, I'm going to write opinion pieces and attempt to get them published in various media where my voice for small business advocacy can make a difference.

To hone my writing skills I recently participated in an Op-Ed workshop offered by The Writers League of Texas. The following was first "penned" (sounds so much more elegant than "keyboarded") as a class exercise in that workshop. Thought I'd try it out on you....
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Know any movers and shakers?

Now you do!

Last week, I became one – a mover, I mean…and I didn’t start with something easy. No, not me!

I took on a major federal agency and the U.S. Congress, and moved the Senate to take an action. Oh, I didn’t do it alone. No, it was a group effort. But, I’ll take credit for shaking things up and forging the trail. Yep, that was me, at the front of the line, sticking my neck out and taking action.

In a nutshell, here’s what triggered it all: Some special wording had been slipped into the current stimulus package at the request of the National Institutes of Health. As usual, it was done at the very last moment…probably under the cover of darkness.

The result? About $250 million in research and development projects were denied to small businesses. What’s worse, this wording was in fine print and coded so nobody would notice.

When I discovered this injustice, I fired up my Blog. The story was picked up and broadcast by others and soon a whole bunch of people were up in arms. I encouraged a letter-writing campaign to tell our legislators they had been bypassed, and small business was being harmed. Moreover, as I (not being a lawyer) interpreted the law, the NIH couldn’t and shouldn’t have short-circuited small business R&D.

Up to this point, I was just being a shaker.

That’s when I decided to morph into a mover, too. Posting a template letter on my website, I explained how the system worked. Then I informed hundreds of clients and contacts, via my newsletter. I also kept up the pressure through my Blog and faxed dozens of letters myself to our Senators and Representatives.

Much to my delight, a whole bunch of small businesses began to follow my lead. A flood of letters were sent. A key senator’s staffer even called me, asking for a briefing…and my opinion. That senator -- a lawyer -- evidently agreed with my assessment.

Amazingly, hundreds had followed my lead and my instructions. But what’s even more amazing? The right people on the Hill heard our plea and supported our cause…and, last Tuesday, the Senate sent notice to the NIH. Their message? Follow the law and provide the funding to small business R&D…and don’t you dare bypass us again!

My suggestion had been adopted! I had moved the U.S. Senate to needed action.

Why was I amazed? I’ve always thought of myself as only a shaker – the guy who challenged the status quo, suggested what to do and then let someone else actually make the moves. See, I’m a consultant, and that’s what we do. We shake up situations that need shaking. Then, we make suggestions and let someone else do it. Hey, consulting’s a fun job!

But, I really enjoyed that taste of being a mover, so, while I’ll continue shaking, I just might step up and do some moving too. It’s even more fun than consulting!
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So, please help me out here...

If you have a suggestion for a media outlet that might be useful for marshaling support for SBIR Reauthorization please let me know about it. The name and phone number of their Op-Ed editor would be especially useful. And if you actually know someone there and can get me an introduction to that editor, that's even better.

This is going to be fun!

PS: If you're new to the NIH/SBIR-exclusion story and would like to see the columns that reported on it, click HERE, and scroll down to see them. The story broke on February 21st.
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SBIR to be Extended to July 31st

2009-03-16T21:10:00.005-05:00

This is just a quick note to inform you that the House and Senate have reached a compromise on a Continuing Resolution that will again extend the SBIR Program, this time until July 31, 2009.

In a special edition of his SBIR Insider Newsletter, Rick Shindell reported that "In a bill to originate in the House, this legislation will amend PL 110-235 (the current CR) that expires on March 20, 2009. As reported earlier, the House wanted a short fuse while the Senate wanted a longer one."

Never count your chickens before they're hatched, and things could go awry before this takes effect on March 19th, but it does look like we'll have about four months to get a re-authorization bill put together that all sides will agree to.

We do have our work cut out for us. I'll have a new Legislator Letter up on my website soon.

Stay tuned...
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"Getcha SBIR Stimulus Contracts While They're Hot!"

2009-03-12T15:51:00.015-05:00

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Now that the Senate has told the NIH, in no uncertain terms, to provide our nations' small businesses the full measure of SBIR R&D funding to which they are entitled under the law, we can turn to some other Stimulus opportunities for SBIR companies. Hold on to your hats, what I'm about to reveal may startle you....

If you peruse the ARRA Stimulus Bill you'll find something for just about every Federal agency. Every one of them of them has been given a pile of money to spend quickly. One of the problems these agencies are having is getting the stimulus contracts issued fast enough. Remember the whole idea behind this Stimulus deal is a quick infusion of capital into the economy.

Procurement law under Section Six (Competition Requirements) of the Federal Acquisition Regulations (The FAR) requires that, except for special circumstances, all Federal government contracts must be issued only after a "fair and open competition." That takes time and lots of effort on the part of the government procurement officers to create and issue RFPs and collect and evaluate bids before the contract can be issued. They'd love to have a way to bypass the competition requirement and just issue contracts. Well, guess what, we have a special circumstances solution for them!

We who are members of the Small Business Technology Council (SBTC), an arm of the National Small Business Association (NSBA), participated in a national conference call this morning. Our leader and SBIR advocacy mentor, SBTC's Executive Director, Jere Glover, laid out the following very simple strategy: leverage your SBIR awards into Phase III contracts with Federal agencies needing to spend stimulus funds quickly.

Here's how it works... It turns out that once you have a Phase I SBIR award for developing a technology, all subsequent government contracts (or grants) for work that "derives from, extends, or logically concludes" that work are SOLE SOURCE JUSTIFIED. This means that if you can find something that ANY one of the Federal agencies is looking to have done, and you have had an SBIR (or STTR) award that you can show has such a relationship to that desired work, you can call up that agency, find the procurement officer who's responsible for issuing stimulus contracts (here's a website that makes your search easier: http://www.recovery.gov/?q=content/agencies), and let him/her know that you have a "sole source justification" for the work. The contract can be immediately issued to you, styled as a Phase III SBIR, without the need for a competition. Truly.

And, believe it or not, whether or not you've gotten a Phase II is completely immaterial to this discussion. Of course, you do need to have something of value to offer the government in this deal, and there needs to be a match with agency needs and company capabilities.

I'm not saying that this will be easy. You'll have to play detective. It may be a challenge to find the "wires" to connect for getting to the funds. If you have an internal agency champion they may have to help you in navigating that agency's process. They'll probably have to use the Recovery.gov site themselves. But, the fact is that procurement officers in every agency have the responsibility to spend a LOT of money in a relatively very short time. Do whatever it takes to find them. They're motivated to make things happen.

We've already heard about one such contract issued -- The Department of Transportation issued a Phase III contract to a small business that had a DOD Phase I for some work that applied the same technology. Yes, it doesn't matter who issued the Phase I to you -- ANY other Agency can issue you a Phase III -- even ones who don't do SBIRs at all!

Get the idea? Yes, this is HUGE! GINORMOUS, as my granddaughter would say!

If you're not sure what a Phase III SBIR award is, download a copy of my SBIR Coach's Newsletter of Novermber 2008 that answers the question: "What is Phase III?"

Then download a copy of the ARRA Stimulus Bill from http://readthestimulus.org. Search it for anything that one of the Federal Agencies needs that may relate to what your company has done with its SBIRs. Make some calls. Do some negotiating. Sign some deals. Get some money.

We do expect to see a Continuing Resolution introduced and passed before the March 20th SBIR expiration deadline, but it will likely be short term -- maybe 60 days. So we'll have some hoop jumping to do to get an acceptable SBIR re-authorization bill crafted, passed and signed, but we will git er done!

Jere has promised to put some additional information on all of this on the SBTC website: http://SBTC.org. They put the really good stuff in the "Members Center" section, so please join the SBTC and help support our advocacy.

This ARRA deal is a short term opportunity. Make the best of it. "Getcha SBIR Stimulus Contracts While They're Hot!" (Opening day is just a couple of weeks away and I'm getting in the mood. Maybe this will be the Rangers' year! Someone please pass the mustard!)
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Key Senators join the call for NIH to "IGNORE" SBIR Stimulus Exclusion

2009-03-10T21:16:00.019-05:00

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We got some action! Perseverance pays off!

The Senate's Small Business & Entrepreneurship Committee's Chairwoman, Mary Landrieu (D-LA) and Ranking Member, Olympia Snowe (R-ME) joined my call for the NIH to effectively IGNORE the ARRA Stimulus Bill's SBIR Exclusion in a letter sent today to Charles Johnson, the Acting Secretary of the U.S. Department of Health and Human Services (HHS), the parent organization of the NIH.

The PR Newswire story about the letter can be viewed by clicking HERE.

The headline is:

Landrieu, Snowe Emphasize Importance
of Small Business Innovation
to Economic Recovery

The subtitle is:

Call on HHS to fund SBIR/STTR despite
exemptions in economic recovery plan.

Quoting from the letter:

"While the $8.2 billion allocated through Title VIII of the Recovery Act is relieved from specifically funding SBIR and STTR projects, the Act does not exempt the HHS from its continued statutory obligation of allocating a minimum of 2.5 percent and 0.3 percent, respectively, of its total extramural budget for research and development for SBIR and STTR projects. At stake is as much as $229 million."

"The SBIR and STTR programs allow small research and development firms -- our nation's innovation lifeline -- to create high-quality jobs and cutting-edge products and therefore are fundamental to our country's economic recovery. Consequently, it is of great concern to us that the NIH maximize the benefits of the Recovery funding and provide not less than the statutory percentages of the Department's extramural research and development funding to the SBIR and STTR programs."

All I can say is THANK YOU Senators Landrieu and Snowe, and the rest of the Senate SBE Committee. I know for a fact that, due to the letters that many of us wrote, some of you also had a hand in this.

The HHS has until March 24th to respond to the Senate Committee in writing. Frankly, I don't think they need two weeks to decide to do the right thing. I sugest that we keep the pressure on the NIH to respond quickly and favorably.

Of course, March 24th is after the March 20th expiration date, so we MUST get that Continuing Resolution to make this really be other than a hollow promise.

UPDATE, March 11, 2009: Check out Rick Shindell's SBIR Insider Newsletter of this date. It provides some more information on activities concerning the Continuing Resolution, and some additional background on the NIH deal, including an actual copy of the Senate SBE letter.
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SBIR Exclusion From NIH Stimulus was even more underhanded than we thought!

2009-03-06T21:29:00.044-06:00

[THIS STORY HAS EVOLVED SINCE THIS POSTING. SENATE TELLS NIH TO FULLY FUND SBIR DESPITE THE EXCLUSION.....READ THE POST OF MARCH 10th FOR THE STORY!]

The campaign is working folks! Everyone is incredulous that such a counter-productive restriction would have been made in these politically charged times, effectively excluding ARRA Stimulus money from small business, the ONLY sector of the economy that's currently creating jobs! And they're angry that it was intentionally done in such a manner as to escape scrutiny.

But you haven't heard anything yet. My original posting on this only scratched the surface of the underhandedness. It was even worse than we thought. I suggest that you take your blood pressure meds before reading any further.....

I gleaned a very disturbing fact today: The version of the ARRA Stimulus Bill that was engrossed (that's the term for being voted on and passed to the next step in the process) by the House, and the version that was amended and engrossed by the Senate, DID NOT CONTAIN THE NIH SBIR EXCLUSION CLAUSE! That means that when your Representative and Senators voted on this bill, SBIR and STTR were, as they should have been, a part of the NIH's Stimulus funding to the tune of some hundreds of millions of dollars in new projects for worthy small businesses.

The engrossed Bills differed in some minor elements, including the amount of money that the NIH was to receive, so they were sent to a Conference Committee (five Members each from the House and the Senate) to have the differences resolved. The Committee did its business and produced the final copy of the now enrolled Bill for the President's signature. Guess what!

THAT FINAL COPY, AND ONLY THAT FINAL COPY, DOES CONTAIN THE NIH SBIR EXCLUSION CLAUSE, and the President signed it into law, thereby taking away, without a vote, the money for those SBIR and STTR projects that effectively had been authorized by your legislators.

Check it out for yourself. All of the versions of the Bill can be found at: http://www.govtrack.us/congress/billtext.xpd?bill=h111-1. Look at each version. (To find the pertinent section, search for "HIV". It turns out that that term only appears in the same paragraph as the one that contains (or doesn't yet contain) the SBIR exclusion clause.)

When I was alerted to this, I was momentarily speehless. (Those of you who know me know how unusual that is!) I couldn't believe that anyone would have the guts to try such skulduggery and that the rulebook would allow this. So I did some research. They did; I'm not sure if it does; but that's indeed where and when they did it!

What about the Rulebook? According to the official government document "How Our Laws Are Made", Conferees are limited in their authority to make substantive changes: "Furthermore, they may not insert new matter that is not germane to or that is beyond the scope of the differences between the two Houses." Does this exclusion clause qualify as being germane or within scope? I'll leave it up to the legal eagles among you to weigh in on that. But what's done is done. The question now is how to best undo it, or at least undo the effects of it.

The legal eagles can advise us on what would need to happen to get this exclusion lifted, either by an action of the Congress with some sort of Bill, or by the President himself with an Executive Order. I just don't know what our next step should be in a procedural sense (someone please help me on this), only that we shall not sit by and let this stand unchallenged.

Of course, the NIH can choose to unilaterally undo this injustice and do the right thing by simply deciding to add an equivalent amount to what would have been newly authorized funds to their regular Allocation Base for SBIR and STTR, dust off those projects that scored well in recent evaluations but just missed the pay-line due to lack of funds, call up the companies, and issue the grants! VOILÀ! Instant stimulus. Shovel-ready job creation, as they say. What about it NIH, y'all up to doing the right thing? Legally you can do it. So please just do it!

OK, the list of suspects in our whodunit has suddenly gotten much shorter. Call in CSI. The ONLY people who could have introduced that clause into the bill were in that Conference Committee room. Who were the Conferees? Here's a source of that information: http://neinuclearnotes.blogspot.com/2009/02/stimulus-bill-conference-committee.html. [Hmmm.... Seems that Senator Specter wasn't on that Conference Committee, so our previous information may have been incorrect, and, if it turns out that we were wrong, and he had nothing to do with this, we hereby apologize to the Senator for that.]

All right, will the real culprit please fess up? Unlikely. Probably not even CSI can solve this crime. These sneaky-snakes tend to cover their tracks too well and close ranks when challenged. But someone in that Committee room did this, probably at the request of some misguided individual high up in HHS/NIH who thought they were doing something in the best interests of their Agency. At least I certainly hope it wasn't done maliciously. Frankly, at this point, I don't care who did it, just that the effects of it be undone.

I've been receiving lots of emails from people who want to know what they can do to help. Hits on this Blog and on my website's SBIR Reauthorization section are up more than tenfold from before this story broke. At least a dozen other Blogs and News sites have picked up the story and spread the word. It's almost viral!

So, let's keep up the pressure. Send out links to this Blog posting, including to other media. Send letters. Make phone calls. Armed with these new revelations we might get some attention from the right people, either in the White House, in the Congress or at the NIH, and turn this around.

And, one final word. That Continuing Resolution must still be secured. SBIR expiration is only two weeks away without it. The House Small Business Committee is the one that will introduce it, so focus on them. We hear rumors of a CR bill being prepared there, but nothing official has surfaced yet. I know it's a lot to ask, but please keep that pressure on too.

We shall persevere.

UPDATE - Sunday, March 8, 2009, 2:00 PM CDT:

An email letter addressed to the "Small Business Research Community" was sent out today by Jo Anne Goodnight, NIH's SBIR/STTR Program Coordinator, wherein the opportunity for small businesses to apply for grants in a new ARRA funded opportunity called "NIH Challenge Grants in Health and Science Research" was touted with the statement in bold face: Small businesses are eligible to apply for grants under this program.

Yes, Jo Anne, eligible, but competing with who else? You have to drill into the announcements a ways to see the list. Here's a shortcut. Among others, the eligible organizations include Public and Private Institutes of Higher Education, For-Profit Organizations (Other than Small Businesses), Not-for-profits of all types, and City, County, and State Governments. Hardly a level playing field! Good try NIH, but no cigar.

If you didn't get the NIH's email letter and would like a copy, write to me and I'll forward it.
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Four Federal Agencies Announce New SBIR Opportunities

2009-03-05T14:16:00.006-06:00

Even though we haven't yet seen that Continuing Resolution issued for extending the expiration date of the SBIR Program beyond March 20th, I'm happy to report that the Federal Agencies aren't holding back on issuing their announcements for new SBIR opportunities, and four of them: Transportation, Homeland Security, Environmental Protection and the National Science Foundation have recently published new topics.

Department of Homeland Security (DHS) - due by April 6th

Domestic Nuclear Detection Office (DNDO)
- X-ray Generators to Enhance Material Discrimination for NIT Imaging
- Innovative Training Technology for Preventive RadNuc Detection

Department of Transporation (DOT) - due by April 15th

Federal Highway Administration
- Shockwave Mitigation On Roadway Systems
- Thermographic Device for Nondestructive Evaluation of Bridge Integrity
- Vehicle Detection, Counting and Tracking System
- Pedestrian Detection, Counting and Tracking System
- Self-Sustaining, Intelligent Pavement Systems
Federal Motor Carrier Safety Administration
- Individualized Fatigue Risk Management in Trucking Operations
Pipeline And Hazardous Materials Safety Administration
- Development of in-field pipeline inspection tools
- Hazardous Materials

Environmental Protection Agency (EPA) - due by May 14th

A) Green Building Materials and Systems
B) Innovation in Manufacturing
C) Nanotechnology
D) Greenhouse Gases
E) Drinking Water and Water Monitoring
F) Water Infrastructure
G) Air Pollution
H) Biofuels and Vehicle Emissions Reduction
I) Waste Management
J) Homeland Security

These are anticipated topic areas. Details will be available March 19th.

National Science Foundation (NSF) - due by June 9th

Broad Area Topics are:
- Biotech and Chemical Technologies (BC)
- Education Applications (EA)
- Information and Communication Technologies (IC)
- Nanotechnology, Advanced Materials and Manufacturing (NM)

Note that all of these Agencies do state that awards are subject to "availability of funds", and we all know what that means!

Even the NIH is continuing to announce new opportunities, and they have promised that there will be small business participation in ARRA Stimulus funding, although what form that will take is still not apparent. It's important that small businesses compete for R&D funds on a level playing field, and if it's not via SBIR or STTR it's hard to imagine how that will be managed.

And, DO KEEP THE PRESSURE ON FOR THAT CONTINUING RESOLUTION! The SBIR Coach's website's SBIR Reauthorization section has all the information you'll need (including a recently added Excel file of the key legislators' contact data) and the template letter to send. So, please just do it!
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Protecting the Business of Your Business

2009-02-26T14:39:00.002-06:00

We're going to take a short break from fighting with Congress about the damaging things being done to SBIR, and talk about something that will be a bit more uplifting. But if you really came here to find out about the sneaky and underhanded SBIR lockout from the NIH's Stimulus money, click HERE to see that SBIR Coach's Blog posting. But promise to come back later and read this one -- it's important!

Recently, my friend, Charles Moster, invited me to contribute a guest column about SBIR on his Springboard Blog - Create Momentum. Since the February SBIR Coach's Newsletter (and a subsequent update to it) discussed protection of SBIR Data Rights, and, since Charles is, among other things, a respected IP attorney, I invited him to stay on theme, and do one for us on the importance of looking at protection of intellectual property from the perspective of its contribution to your business model...

Protecting the Business of your Business

Imagine that you just stepped off the elevator having traveled 30 floors talking to the CEO at your top prospect. You gave the most stirring elevator speech in the history of elevator speeches, and captured her imagination with your tale of cutting-edge technologies and memorable branding.

Much to your surprise, the CEO gets off the elevator and calls her friend at a company across town and now you have a new competitor. Have you protected what makes you so unique? Have you protected the business of your business?

This may sound like lawyer-speak or the turning of a phrase which would be the nightmare of any fifth grade English teacher. However, I have been a lawyer for over 22 years and have represented clients including Uncle Sam, huge corporations, small startups and 100’s of emerging businesses in nearly every industry from technology to trucking. I have found that all too often companies fail to understand and appreciate the critical importance of protecting their intellectual property rights – the business of their business.

By “intellectual property” I mean the creative products of your imagination. I’m a lawyer but I’m also an inventor, playwright and composer so I understand the intrinsic value of creating something that never existed before. However, I also know that you need to take steps to protect your novel idea, brand, technology before you can translate that value into sustainable revenue.

When talking with our clients we first define what intellectual property is and what they can and cannot legally protect. Patents, copyrights, trademarks and tradesecrets are all in the mix. Then we discuss the role the IP will have in their business model and how it will affect their ability to create revenue. It is important that we scale their level of protection and legal investment based on their current needs and growth plans because not every company needs everything filed at once.

Having secured your IP rights allows you to work both offensively and defensively. Sadly, some people are born with what I call “perforated halos”. Their business model is to steal your technology and employees, trade off the goodwill your brand creates in the market, and essentially grab whatever they can.

Don’t let them get away with it! Protecting your IP allows you to be offensive in your pursuits of infringers. I’m not advocating suing everyone who comes along because litigation is very rarely the best option, but if you haven’t taken the steps to protect your assets your position of strength is diminished. Plus, not every dispute ends in lengthy and expensive litigation. Many companies strike win-win licensing deals with former infringers and create new revenue streams.

Protecting your IP rights also lets you be offensive in your pursuit of business and strategic/channel partners, licensees, investors, and acquirers. Anyone who has talked with a potential partner, licensee, investor, and acquirer knows that whether or not you have protected your IP is always an initial question, if not the very first one. Your ability to garner interest from these groups and negotiate a higher price, royalty, valuation goes part in parcel with the investment you’ve made in your patents, copyrights and trademarks. If your technology isn’t camera ready, have you considered a provisional patent and the “Patent Pending” label you can use? If your product launch isn’t for several months would an Intent to Use trademark application ease your concern about losing the name in the interim?

Intellectual property is also a tremendous competitive advantage. Novel, patented technology can create high barriers to entry, and if you combine it with a strong, trademarked brand you can intensify customer loyalty and improve your ability to charge price premiums.

Our firm is focused on being a positive force and avoiding the focus on fear – there’s plenty of that to go around already. However, the defensive value of IP is just as important to help you avoid costly and sometimes catastrophic issues.

For example, before you invest the time, emotion and thousands of dollars into a new brand and marketing campaign consider a trademark search and filing. Unfortunately, on several occasions clients have come to us with a growing business (great news) but also a nasty cease and desist letter from a lawyer halfway across the country threatening our client with infringement (not so great news). Sometimes we can prevail but sometimes the client has to completely scrap their name – along with the untold value of the brand they’ve worked so hard to create! Uggh.

There are countless reasons to protect the business of your business, more so than the word limit on this post. Intellectual property is a complex area of law, but the rationale for pursuing the protection it affords is not.

Charles Moster, Senior Partner
MosterWynne; Austin, TX
www.mosterwynne.com
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