By Tom Ballard, Chief Alliance Officer, PYA
“It’s the best and worst venture capital you will ever receive,” Chris Rey, President of Energy to Power (E2P) Solutions, told about two dozen attendees at an informational session yesterday afternoon focused on the federal Small Business Innovation Research (SBIR) program.
The former Oak Ridge National Laboratory researcher turned entrepreneur was joined on a panel by two other local business executives – Steven Ripp, Chief Operating Officer of 490 BioTech, and Lee Martin, a local serial entrepreneur, educator, and Founder of ImmersaCAD.
Collectively, they have an above average “hit rate” in terms of Phase I, II and III SBIR awards as well as its sister effort – the Small Business Technology Transfer (STTR) program. So, the attendees, mostly associated with the University of Tennessee (UT) where the event was held, listened intently to the advice that was offered.
Rey said he’s won 30 Phase Is, eight Phase IIs, and three Phase IIIs, while Ripp said 490 BioTech has won four Phase Is, had one of those transition into a Phase II, and will be submitting another Phase II by the end of the week. Martin is not pursuing SBIRs in his latest venture, but garnered $4.5 million from three different federal agencies in six years for his TeleRobotics start-up that was described in this two-part series published several years ago on teknovation.biz.
Each of the panelists emphasized the importance of establishing relationships with the right people in the federal agencies that entrepreneurs are targeting and being able to effectively communicate their stories, both the quality of the written proposals and the verbal discussions with federal officials.
Rey described himself as shy, reserved and introverted when he started pursuing SBIRs. He quickly learned that he had to change to succeed.
“If your technology is one and done and you can commercialize it (after that), you can maintain your shy personality,” Rey said. However, if you are going to require more grants or contracts, depending on the agency’s agreement process, applicants must become much more extroverted.
“Writing is important,” he emphasized. “You have to combine good technology, write a clear story that says how you are going to commercialize it, and you have to be able to verbally communicate face-to-face.”
Martin shared the story of his first SBIR proposal when he had his wife review the narrative to ensure that a layperson could understand what the technology could do.
Ripp reinforced Rey’s points.
“If you know the (SBIR) system, tell your story well, and tell it from a business rather than an academic perspective, you can succeed,” he said, adding, “If you don’t follow the (agency rules), you get tossed out.”
One of the ways to establish relationships is to attend conferences. These include the numerous SBIR road shows that are held across the country as well as technical conferences where agency people will be presenting their needs.
Rey combined the communications and relationship success components into a simple statement – “No facetime (with the appropriate agency reps), no success.”
Other tips offered included these:
- Do your homework before meeting with agency representatives. Marry your technology with their needs.
- Don’t be afraid to call the right person in the agency and ask for time to meet, either in their office or when they are attending a conference. Be able to tell your story in less time than you have requested.
- Once you win an SBIR, accept the request that you will receive to be a reviewer of other proposals. Don’t say “no.” You’ll be tested initially with one proposal to review, so make sure you do really well with your evaluation.
- SBIR rules, needs and mechanisms vary by agency. For example, the Department of Defense uses a contract, while most other agencies award a grant.
- Understand the difference between SBIRs, which don’t require a research partner, and STTRs, which have a requirement to partner with a university or national laboratory.
The event was moderated by Shawn Carson, a well-known member of the local entrepreneurial community who has an affiliation with the three sponsors of the workshop. They were the UT Research Foundation, UT Anderson Center for Entrepreneurship and Innovation, and Three Roots Capital.