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August 15, 2017 | Tom Ballard

Launch Tennessee now accepting applications for new “SBIR/STTR Matching Fund Grants Program”

Launch TN StarsBy Tom Ballard, Chief Alliance Officer, PYA

Tennessee-based entrepreneurs seeking to commercialize technology with funding from two federal initiatives now have another tool in their toolkit, thanks to funding included in the 2017-18 State of Tennessee budget, and the application window is open.

As a result of a more than two-year effort, spearheaded by two statewide organizations – Launch Tennessee and Life Science Tennessee, Governor Bill Haslam recommended and the General Assembly approved $1.5 million for the new “SBIR/STTR Matching Fund Grants Program.” The dollars are non-recurring, meaning they will have to be included in next year’s state budget for the program to be more than a 12-month initiative.

The funding represents an important milestone in efforts to support more technology start-up growth in the Volunteer State. The $1.5 million pot of funds will be used to match federal grants that companies receive to advance their efforts to commercialize technologies important to the federal government. The state’s program has a cap of $150,000 that can be awarded to any one company.

“It allows us to remain competitive and keep really good start-ups here,” Lindsey Cox, Launch Tennessee’s Director of Operations and Government Affairs, said. Several of the states around Tennessee have already implemented similar initiatives, and some start-ups from here have relocated to those states to be eligible for their matching dollars.

“We’re the 17th state in the country to implement a matching program,” Cox explained, adding that the effort would not have happened without strong support from the Tennessee Department of Economic and Community Development (ECD). This year’s funding followed passage last year of authorizing or enabling legislation that allowed for the SBIR/STTR matching program to be implemented.

“We’re very thankful to ECD for championing the program alongside Launch Tennessee and Life Science Tennessee, the Governor for recommending the funding, and the legislature for approving it,” Cox said.

For those not familiar with the SBIR and STTR terms, they stand for Small Business Innovation Research and Small Business Technology Transfer programs, respectively. Both are tools used by many start-ups to help de-risk their efforts to take early stage technologies to market.

As noted on federal websites, the SBIR program “encourages domestic small businesses to engage in federal research/research and development (R/R&D) that has the potential for commercialization.” The federal monies that companies secure under a competitive grants process come from a specific allocation of the R&D budgets of 11 federal agencies. Conversely, the STTR program involves only five federal agencies and also includes a requirement that the small business recipient formally collaborate with a non-profit research institution on its research work.

Tennessee is among national leaders in terms of research funding, but not as successful as other states in winning SBIR and STTR awards. The matching program is expected to help increase the success rate.

Cox says the Tennessee matching program has some unique aspects that differentiate it from those in other states.

“It’s not a “check the box” match,” she says. “Our dollars are intended to fund items like travel and marketing costs that are not eligible under the federal guidelines for use of those dollars. Our funding is intended to be complementary to, not duplicative of the federal monies. We’ve tried to be flexible with how the companies can use the funds to ensure maximum benefit to each recipient.”

Any company that has received an award since January 1, 2017 is eligible to apply, and the state funds will be awarded on a first come, first serve basis. In most cases, the match for a Phase I winner is $.50 per each dollar of SBIR/STTR monies awarded to a company. Cox notes, however, that the match rises to $.60 for companies that are owned by females, minorities, veterans, or those with disabilities and companies located in rural areas as defined by the state. For Phase II awardees, the match is $.25 per $1 of federal funds.

Other important guidelines are as follows:

  • Companies are limited to one Phase I match and one Phase II match every two years based on a calendar cycle, and the previously noted maximum of $150,000 per company;
  • Companies receiving a match must remain headquartered in Tennessee for 24 months;
  • Companies receiving a match must commit to semi-annual reporting; and
  • Each application will be reviewed internally by Launch Tennessee staff members with a goal to determine that each application contributes to the overall economic development of the state and aid in the organization’s mission to support entrepreneurship and innovation in the state.

For more information and a link to the application, click here.

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