PART 1: RAE has won four SBIR awards including a Phase III
(EDITOR’S NOTE: This is the first article in a two-part series examining a Johnson City-based company’s successful use of Small Business Innovation Research Grants to scale its business model.)
By Tom Ballard, Chief Alliance Officer, Pershing Yoakley & Associates, P.C.
Do you know an individual who is four for four in submitting and winning Small Business Innovation Research (SBIR) grants – two Phase Is and single Phase II and IIIs?
I was not aware that I did until recently when I was chatting with Jeff Kanel, Chief Executive Officer of Renewable Algal Energy, LLC, during a Tennessee Advanced Energy Business Council meeting in Nashville.
The firm, known as RAE, has created what it describes as “novel breakthrough technology to produce sustainable, economically viable products from microalgae.” Those offerings range from algal oil as a feedstock for renewable diesel fuel to protein, carotenoids, and omega-3 fatty acids for animal and human nutrition.
“Our model is to be a technology licensor,” Kanel says. “We are trying to make algae a profitable endeavor that also solves a lot of global problems.”
Three of the four SBIRs that Kanel submitted were directly related to evolving RAE’s technology. The fourth, also focused on algae, was submitted by Kanel before RAE was founded.
For many start-ups, an early funding source after friends and family is an SBIR award. In fact, Life Science Tennessee issued a report last year calling for a state matching program for companies that successfully win an SBIR or Small Business Technology Transfer grant. This matching activity is a strategy that a number of other states have adopted.
Having a winning percentage like Kanel has produced is impressive, so we wanted to know more about his secret sauce. It involves careful planning, complete understanding of the agency’s needs, full execution, and effective communication.
RAE started down the SBIR trail in 2007 in a purposeful way.
“They were intended to be sequential grants, and that’s how we ran them,” Kanel said, referring to the same project title for the RAE’s Phase I, II and III submissions. It was “Algal Biodiesel via Innovative Harvesting and Aquaculture System.”
Kanel said success starts with understanding the federal agency’s need. In his case, it was the U.S. Department of Energy (DOE).
“We had a project that fit a need for DOE, so we capitalized on it,” Kanel says. “We carefully studied what the Department was looking for. We limited the scope of our response to the defined need.”
The initial Phase I for RAE was submitted in 2007, and the award was made in 2008.
His recommended approach – focusing on the defined DOE need – characterized RAE’s responses that won the Phase II and III awards.
“You have to align your needs (as a business) with meeting precisely what the funding agency wants,” Kanel reiterated. “You have to enable that funding agency to have a successful project.”
He identified several keys for success. They included utilization of solid project management tools, inclusion of well-defined milestones and deliverables, and a clear understanding of the critical success factors.
“Having good, clear, open communication is critical,” Kanel adds. “You’re building a successful track record. It’s important at each juncture to deliver exactly what you promise.”
So, how did the three SBIRs advance RAE?
NEXT: The SBIR program positions RAE for success.
