Welcome and Program Overview SBIR 101

Welcome to the start of the 2024America Seed Fund Week, our virtual road tour. My name is Eric Page Little Ford, and I am the Acting Director of the Small Business Innovation, Research and Technology Transfer office at the U.S. small Business Administration. Our office focuses on expanding access to federal research and development funding for innovative high tech small businesses. Our goal this week is to expose more tech entrepreneurs and startups like yourselves to the $4 billion in annual funding from the Small Business Innovation, Research and Small Business Technology Transfer Programs. We refer to these programs as America's Seed Fund. America's Seed Fund's mission is to support scientific excellence and technological innovation to build a strong national economy and to encourage particip participation in innovation and entrepreneurship by members of all races, genders and localities. Thank you all for taking the time to join us today. Now, as we kick off this exciting week, it is my great honor to introduce our 27th Administrator of the U.S. small Business Administration, Isabel Guzman. Administrator Guzman serves in President Biden's cabinet as the leading Advocate for America's 33 million small businesses and innovative startups. The administrator has made advancing entrepreneurship her life's work. Growing up, she worked alongside her father in his chain of veterinary hospitals, an experience that shaped her understanding of entrepreneurship and its transformative effect on customers and on communities. She went on to launch her own businesses across a range of industries and advise other founders in paving their way to the American dream of business ownership. She served as SBA's Deputy Chief of Staff in the Obama Biden administration and then led the California Office of the Small Business Advocate. In early 2021, President Biden asked her to lead the SBA and her nomination was confirmed by a bipartisan vote in the United States Senate. Under Administrator Guzman's leadership, the agency manages a $500 billion portfolio and deploys $40 billion in funding annually to America's small business owners. As administrator, she spearheaded key agency initiatives to deliver essential pandemic assistance to vulnerable small businesses and underserved communities. She has also implemented effective strategies that help small businesses and innovative startups gain unprecedented access to capital contracting, professional networks, technical training, digital tools, and disaster support. As a result, more than ever before, millions of America's entrepreneurs have the resources they need to start, grow, and build resilient businesses. Administrator Guzman, welcome.

Thank you so much, Eric. Appreciate the great welcome and introduction and welcome everyone to America's Seed Fund Week. You know, first off, this team, with Eric's leadership and Bailey as well, you know, has just been incredible in lifting up innovation work at sba. And so I appreciate all of Team SBA across all of our program offices who have been focused on making sure that this week's programming across the nation really lifts up America's seed fund or the SBIR STTR programs. You know, I'd like to also lift up our innovation ecosystem partners who are out there as well joining us, who've really helped us deliver our mission on this front as an agency, including SBA's regional innovation clusters, our growth accelerators, our fast awardees in states across the nation that support our nation's entrepreneurs on the ground and who have helped us amplify and engage so many American innovators participating today. You know, we are pleased. I was told right before this call that we have over 5,000 registered. This is a record attendance. Thousands of small businesses and innovators are here to gain insights, get resources, and connect to the 11 federal agencies who power over $4 billion every year in non dilutive startup capital to aspiring entrepreneurs across America. You know, I always like to say that America needs its great ideas and inventions to propel our global leadership. As it's true, we rely American ingenuity to really develop critical technologies and create the industries of the future. And this is a remarkable time to start up in America because under the Biden Harris administration, we are investing in America in R and D, advanced manufacturing, clean energy and more. And we have transformed our capital programs at the SBA to ensure that small businesses powering these investments have the capital that they need, you know, through over $50 billion in loans, bond investments last year and annually at the sba. So we can see success outcomes in this in marketplaces around the country. Now, President Biden believes that America is about possibilities. He always describes America in that one word. And he's fighting to ensure American ingenuity and innovation can power our economy and our nation forward. We're experiencing a small business boom with 16 million new business applications filed since the President took office. And that's 84% higher than any period, period in history. And really reversing dynamism so that the first three years of this administration have been the first, the second and the third strongest years for those small business application rates. And there's also been a changing face of entrepreneurship, which is why we're here today as well. Women are starting businesses at a rate that's 94% higher than their male peers. We've seen the strongest black entrepreneurship rates in 40 years and the highest Hispanic rates in over a decade. And truly, that changing face of entrepreneurship requires that we ensure that we connect all of our great entrepreneurs to the resources that we're going to be doing this week. There is great hope and confidence in the marketplace demonstrated with these numbers. Every small business application is a sign of hope and the President is really building the economy from the middle out and the bottom up as he says. But that is about creating a level playing field and opportunities like those that we're going to review today and throughout the we've seen in this economy 14 million jobs created, rising wages and household wealth, and we have the lowest inflation and strongest recovery of any global economy. You know, there's more work to be done, but there's something to be said about the fact that private companies have invested $640 billion in manufacturing investments and including high tech industries that I know many of you are in, whether that's semiconductors and electronics, over 234 billion EVs and batteries over 157, clean energy manufacturing 75 billion. Biomanufacturing 24 billion plus. Over 40,000 projects, shovels and ground around the country delivering broadband roads, bridges and the infrastructure spending over $400 billion. These are huge numbers. But really delivering for public infrastructure and clean energy projects around the nation and small businesses are the catalyst across all of these historic investments. We need our entreprene everywhere and anywhere to power the future. Innovation is everywhere. It's not just in the lab or accelerator. It's not just on the coast or in certain zip codes. It's across America. And I travel the country and meet with hundreds of business owners and see it firsthand. I know I've spoken about many of these examples, but the latest one, I was in rural Nevada and met with a second generation salt operation that's trying to stop the excessive use of chemicals used. And this is not a sexy topic, but to winterize porta potties with the new product. Those are chemicals going into the ground. And this is a small second gen salt company that's trying to transform that. So innovation is everywhere, opportunity is everywhere. And America's Seed Fund Week is about reaching all of these great innovators so that our nation can solve problems and make our world a better place. And SBA is the agency that funds the American dream of business ownership and powers America's seed fund so we can find that next Qualcomm or that next 23andMe or iRobot founder and ensure their success with our great programs. It is all about possibilities. And right now in America there are limitless possibilities. So I'm so excited you've all joined us. I know you're going to hear from my experts about how you can plug into SBA's resources and the great participating agencies across America's Seed Fund. So enjoy the week. Thank you for your partnership and for what you do for this economy and this country. Thank you, Eric.

Thank you so much. Administrator Guzman. Now it is my great pleasure and honor to introduce our Associate Administrator for Investment and innovation of the U.S. small Business Administration, Bellie Derise, a true champion for America's high growth small businesses and innovative startups. As the head of SBA's Office of Investment and Innovation, Belli has been leading the Agency's portfolio of private investment partnerships and innovation funding programs. These programs include the Small Business Investment Company Program, the SBIC Program, the Small Business Innovation Research and Technology transfer programs, and SBA's innovation ecosystem support Organization development programs, including our Growth Accelerator Fund Competition in the Federal and State Technology Partnership. Welcome, Bellie.

Thank you, Eric. And thank you, Administrator Guzman for your leadership and advocacy on behalf of our nation's small businesses and innovative startups. Eric, I also am very grateful for your leadership of this incredible program. As head of the U.S. small Business Administration's Office of Investment and Innovation, it is truly my great honor and pleasure to welcome each and every innovator, entrepreneur, ecosystem member, Federal partner, all of you that are joining us today to kick off America's Seed Fund Week. I am thrilled to be here with you to kick off the celebration of America's Seed Fund, the Small Business Innovation Research and Small Business Technology Transfer Programs. This is truly a celebration of you, the innovators, the dreamers and the entrepreneurs driving our economy forward and creating a better and brighter future for all of mankind. It's important to note that increasingly, equity and access to capital is a core pillar of the Biden Harris Administration's agenda to support innovative small businesses and startups. Because we cannot continue to build a reimagined economy if a lack of capital keeps entrepreneurs on the sidelines, particularly those that are working on under capitalized technologies and in underserved communities and markets. It is more important than ever to unlock capital for the small businesses and innovative startups that our country needs to innovate to maintain one of our most precious competitive advantages globally, our capital markets and our innovation advantage. The U.S. small Business Administration holds as its core values being equitable, customer centric and technology first. Administrator Isabel Castillas Guzman has empowered every member of her team at SBA to be as entrepreneurial as the small businesses and innovative startups that we serve and to meet them where they are and meet their needs. Where we are we have a phenomenal leader. Our Office of Investment and Innovation solely focuses in on you, the entrepreneurs and investment who are driving to achieve innovation and big dreams and to make an outsized impact. Our team works with partners across sectors and industries around the country to build a thriving local and national innovation ecosystem that promotes investments in all small businesses and innovative startup communities. We are here to support your potential to achieve incredible dreams and foster unity which can come from scientific and innovation and R and D. America's Seed Fund has been supporting cutting edge innovators for well over 40 years and is still doing so right now in every community and in every state, helping build pathways from ideas in a lab to products in a marketplace to impact our lives and promote economic security and national security. Powered by a network of Federal agencies, entrepreneur support organizations and the U.S. small Business Administration, America's Seed Fund advances federal missions and drives innovations innovation across the United States. We've helped businesses pioneer technologies in everything from 3D printing, advanced manufacturing to clean energy and virtual reality to biotechnology. Nobel Prize winning researchers have made use of America's Seed Fund to keep their companies and their dreams alive during the early years when their innovative ideas were often too early to attract other sources of outside capital. America's Seed Fund technologies are currently helping our nation explore outer space, including on the International Space Station and Mars Rover. This critical small business research and development program seeds funds where the market may not be ready to see around corners into the future or to address pressing national security and economic security needs. We help the Federal Government to invest in you, our most precious and innovative entrepreneurs, and signal downstream commercial opportunities for the private sector. While you're going to hear much more all week about America's Seed Fund, I would be remiss not to take a moment to also share a bit about our other flagship program in the Office of Investment and Innovation, a program that helps to crowd private capital into small businesses and innovative startups through Public Private Investment Partnership funds. This program is the Small Business Investment Company program or the SBIC program, a program established 65 years ago during the Eisenhower Administration at the prompting of a study from the Federal Reserve which noted that there were inefficiencies in the market in terms of investment to innovative startups and small businesses. Through this program, the SBA is able to provide matching capital paired with private investment in private funds to support long term equity and debt investments in American small businesses and innovative startups. And just this past year, SBIC, the program licensed 311 private funds which invested roughly $8 billion in over 1200American companies. These companies created and sustained over 130,000American jobs jobs. SBIC License funds across the country are responsible for the stewardship and management of over $42.6 billion in federal and private capital, providing long term equity and debt investments to small businesses and innovative startups in a wide range of industries, including critical industries our nation relies upon. Just as America's Seed fund focuses on innovation, so does the SBA and our Office of Investment and Innovation. Over this past year, the Biden Harris Administration implemented some of the most significant changes to the SBIC program modernizations more than have been seen in 30 years to ensure that the program continues to stay relevant and adapt to the market to address the evolving capital needs of small businesses and innovative startups while crowding in more private capital in support of our nation's most critical technology areas to protect our national security and economic security. I hope the information and resources that you received this week inspire you to take that next step to advance your own innovative vision and work with us. Work with the SBA and our partner agencies to launch or grow a transformative and resilient innovative business. You are a vital part of the innovation engine in America that drives our economy forward. We cannot do this alone. With that, I'll turn the stage back over to my fantastic partner and leader, Eric Paige Littleford, our Acting Director of the U.S. small Business Innovation Research and Technology Transfer Programs. Eric has been an incredible leader in making sure that the SBA supports deep tech, high tech, frontier tech entrepreneurs as it does as it does its Main street small businesses as well. With that, Eric, thank you so much. I am thrilled that we are kicking off the road tour this year.

Absolutely. Belli, thank you so much. I really do appreciate your leadership and the time you've been able to spend with us to kick off America's C Fund Week. Thank you. And again to the audience, thank you all for being here today. We're excited for what we have planned for you all over these next three days. You can customize your schedule to align to where you are in your entrepreneurial journey with several sessions happening currently right here on the platform. Based on feedback from prior years, we've incorporated exciting new elements. 1. Sessions organized by technology and topic areas with program directors for live Q and A are going to be taking place in a little bit, networking spaces for the entire community members. And as Billy indicated, we're kicking off our in person road tours again this year. We have sessions for all four of our upcoming Americas Seed Fund road tours. America's Seed Fund is a doorway to transition your research into products and services that create commercial market successes, address societal challenges, and address critical federal agency mission needs, including our national defense. So what I'm going to do now is just spend a few minutes going into a lot of the details and doing a deeper dive on America's Seed Fund. So when we're thinking about America's Seed Fund, I think it's really important to understand the underlying value proposition of this program. The underlying value proposition is really straightforward. One, it's funding. America's Seed Fund provides funding to support your tech startups. Funding to transition innovative research and development into commercial products and services. Two, you keep the equity. This funding does not reduce your ownership. You lead your company and the technological development. It's your call entirely. Three, you own the intellectual property. It's yours. You own it. You commercialize it. America's Seed Fund provides you with the funding credibility and network that can allow you, in your innovation, to change the world. So let's begin talking a little bit more about this program. First, America's Seed Fund provides a geographically dispersed funding at a significant scale. On average every year, more than 4,000 small businesses, startups and other firms are funded annually through this program. At its core for these companies, America's Seed Fund represents funding for research and development that has a potential for commercial success. These companies range in size from 1 to 500 employees and represent every state and multiple territories. $4.6 billion was provided through this program during fiscal year 22 annually. We know this funding provides more than 4 billion to accelerate the transformation of innovative ideas into research and commercial products and services. And although this is a federal program, the government is a partner, not an owner. The government provides the funding, it enhances your credibility, but you remain the owner and retain all of the intellectual property rights to the technologies that developed one of the most salient program features. The fact that this funding is non dilutive, Non dilutive funding represents capital that doesn't require a business owner to give up equity or ownership. It means America's Seed Fund allows you to chart a path toward commercialization following your vision. It provides capital to de risk your technology, which could enhance your positioning when pursuing future capital needs. America's Seed Fund is federal funding provided through 11 federal agencies. And I'll just note, over the course of the next three days, we have close to 70 representatives from these federal agencies who are going to be available, participating in panels, participating in live Q&As. So we're providing you direct access to these funding decision makers. I believe the Design of America seed fund is brilliant. The funding is basically based on what our largest federal research and development agencies fund for external research. So these are the funds they're providing to other non federal entities to do the R and D. It assesses that budget by 3.2% for every agency with more than $100 million in such funds. In doing so, it creates a broader competitive research and development landscape by competing these funds amongst our small, most innovative firms. This allows the government to harness small business ingenuity. Similarly, its sister program, the Small Business Technology Transfer Program, assesses an additional 0.045% on the largest of our agencies, those with over a billion in external research and development funding. Right now we have six agencies here. These programs are very similar, but with the STTR program you have the opportunity and a requirement to partner with a nonprofit research institution. So one of the questions that comes up is which program is right for you? First, 88% of all of America's seed fund funding is comprised of the SBIR program. And this means this is where you can pursue the research and development independently or through a partnership. The STTR program is only executed by our six largest agencies and STTR requires a partnership between you and a nonprofit research institution. So when you think about it, STTR is a great supplemental capacity opportunity. You can supplement your company's capacity by accessing specific or unique expertise or equipment, or for university based technology spin out opportunities. Either way, whether it's SBIR or sttr, under both programs, you as the small business, you are the recipient of the war and you are leading the effort. One of the things that is a core theme and goal of the program is to make sure that we're surfacing and engaging innovation across the spectrum of populations and communities. I'd like to note that over the last few fiscal years, 34% of the awards received under phase one of the program are from underserved communities, including women owned small businesses, minority owned, veteran owned small businesses, as well as those in hubzone or rural areas. We're looking for the greatest ideas from anywhere and anyone. The structure of the program is really straightforward. Most companies really begin the process at phase one. Phase one is really about demonstrating feasibility and a proof of concept, showing that science is going to allow your proposed innovation to come to be executed on. You can see on the slide that these typically range from six to 12 months and they have around 50,000, up to $300,000 in funding. The heart of the program occurs during phase two. Those companies who are successful at phase one have the opportunity to compete for phase two awards. These awards are for the actual development of your technology. Your real goal in phase two is to try to get the technology developed to a point where at least you can develop a prototype you want demonstrate that you're able to de risk the technology. So you could then go and attract other sources of funding to maybe take it fully down the commercialization pathway. Phase twos can go just over $2 million in initial funding. So this is the heart of the program. Now phase 3 is different. Phase 3 represents non SBIR STTR funding. Another way to think about it, phase 3 is the result of your commercial success of this technology that's been developed under the SB CTR program. Now there's one caveat to that. If you're developing technology that solves a federal mission, need something that the federal government can use. For example, maybe addresses national defense or space technology through the SBIR competition that phase one and phase two, you have the opportunity to unlock non competitive sole source awards without additional competition. This is a very powerful element of the SBIR STTR program for those working on technologies that the federal government can directly utilize. Are you eligible? Right. Here are the core principles of eligibility. 1. You have to be a for profit small business located in the United States. There's a. You cannot have more than 500 employees. And I will note that most of the companies that are receiving awards have under 10 employees. Your company must be owned and controlled by US citizens or permanent resident Elliots. And it doesn't matter if your company has been along for 20 years or you're literally starting up with this initial award. Over the course of these days I'm just going to encourage you to do the live Q and A's, participate in the panels because what you're going to learn is that across America's seed fund, it's a high probability that we are funding technologies that you are working on within your particular area. We've mentioned that this program is comprised of 11 different agencies. And sometimes it's difficult to understand which agency you should target. So one way to think about this approach is asking yourself the question, if you're successful developing this technology, whose problem will it solve? If it's going to solve a broad commercial market or societal problem, think health or think things that people are going to just be able to buy in the commercial market. You may want to think about some of the market driven agencies. They are often externally focused, meaning they're looking to support innovative ideas that can find significant commercial market success. If you're working on something that addresses a federal agency mission need, for example, supporting national defense space technologies. Right. These technologies, these agencies are looking to support innovations that address their needs. But these innovations must also have a dual use commercial market, right? Here's a bit of advice. Whether it's market driven or mission driven, start by casting a wide net. Think about your innovation, your technology area first. Use this information to then look@sbir.gov where you can look at the different opportunities. And then one of the unique things about this week, you can go to meet the program directors which are organized by technology area sessions and engage directly with them based on where your technology interest lies through this program, you're not going to be pursuing it alone. We actually fund through our federal and State Technology Program FAS support organizations. We have 44 across different states and territories where they are there to really support and help you increase the successful SBIR STTR applications. With a particular interest on those proposals coming from women owned or socioeconomic disadvantaged, technology focused entrepreneurs or small businesses in underrepresented areas. Despite that, if there's a fast entity in any of your states or territories, they are there to help you. And I encourage you all to start there. And as a part of this week's activities, a number of them are going to be having sessions before or after the core content of America Seed Fund week. You know, SBIR sttr America Seed Fund has played an impactful role in a number of companies. As you can see on the slide. One I want to just sort of quickly lift up is a few years ago NASA had their DART mission. This is their double asteroid redirection test. It's basically science fiction. They wanted a proof of concept if they can deflect an asteroid on course with Earth. We've all seen movies to this effect, this proof of concept. They were successful in launching the spacecraft and moving that asteroid off of its normal path. And the wings that carried that spacecraft into that asteroid was developed with America's seed fund. America's seed fund provided the funding to develop those wings. So we don't know what's going to be there tomorrow, but I'm excited about the possibilities represented by you all and I'm hopeful that America Seed Fund will be a part of your journey. Now it's my pleasure to introduce our next panel which will be starting shortly, matching your R and D project to a federal agency. This panel will be led by Nancy Kamay, my program development specialist. And Nancy has been instrumental in everything leading up to the 2024America Seed Fund Week. I hope you all have a wonderful week and I encourage you all to go to the next panel, led by Nancy. Thank you all for joining.