OpEd: Federal R&D Funds Bridge the "Valley of Death" for Small Tech Companies

Lisa Kurek is a nationally recognized trainer and speaker on the federal SBIR/STTR programs. She has trained thousands of entrepreneurs on how to prepare winning proposals for R&D funding and coached hundreds of companies one-on-one through the rigorous process. The "girl with the curl"  joined BBC Entrepreneurial Training and Consulting (BBCetc) as managing partner in 1997 when the company was known as Biotechnology Business Consultants. 

Under Lisa's leadership, BBCetc has expanded its reach, developing expertise in the SBIR/STTR programs of all 11 participating federal agencies, which award more than $2.6 billion in non-dilutive R&D  grants and contracts to small technology companies annually. Through grants from the Michigan Strategic Fund, BBCetc has managed the state's SBIR/STTR Assistance Program since 2002. This program provides SBIR/STTR training and proposal development services to Michigan technology companies with the majority of costs covered by the state. Clients of the program have been awarded more than $134 million in funding since 2002.  

Lisa has extensive experience in biomedical technology, having spent 15 years in product and business development and sales and product management in the industry with large, publicly-held corporations as well as start-up firms. She earned a bachelor's degree from Brown University and a master's degree from the University of Michigan, both in biomedical engineering.


OpEd: SBIR/STTR Funds Bridge the "Valley of Death" for Small Tech Companies

Maybe you're researching a cure for cancer at U-M, incubating a new application for clinical record keeping at Ann Arbor SPARK, or devising a leaner, meaner fuel cell at the Michigan Life Science & Innovation Center. You're convinced that you have a game-changing technology in the works as all the while you travel ever nearer to the "Valley of Death."

Entrepreneurs are only too familiar with this loveless land of shrugs and empty pockets. If you've reached the "Valley," you're somewhere between the initial development of your innovative idea and proof that it has potential in the marketplace. Right now, you need capital to get from here to there, and that's the rub.

I often refer to this period as "Come back when…"  If there is high technical risk most investors will tell you to "come back when." When is when? It varies. When you have customers…When you are in the clinic…When you have a working prototype. Those are typical responses. Sound like a catch 22? It can be, but there is a potential solution.

The federal SBIR/STTR programs provide over $2.6 billion of non-dilutive capital every year to small businesses developing high-risk, high-return technology-based products. The money is targeted specifically to fund R&D activities to reduce the technical risk, thereby helping to facilitate access to follow-on funding. Eleven federal agencies, ranging from the Department of Defense to the National Institutes of Health, have SBIR funds available. The program is competitive, but with over $1 million per project of non-dilutive (i.e., free) funding available, an SBIR/STTR grant or contract can be the factor that allows you to cross the "Valley of Death" and come back.

Yet far too many entrepreneurs are either unaware of the programs or unwilling to go through the rigorous process necessary to compete.

This situation is frustrating for me and my colleagues because the potential reward is so great and the process can play such a critical role in helping to propel young companies forward. Moreover, the state of Michigan makes available an SBIR/STTR Assistance Program that pays for most of the costs for our team to train and coach Michigan entrepreneurs and small businesses in developing competitive SBIR and STTR proposals.

So, why do they shy away?

• Entrepreneurs in the process of developing amazing technologies are usually intensely passionate about what they're doing. They want to leap tall buildings in a single bound! Competing for SBIR/STTR money requires an understanding of the programs' purpose and standards, which is different for each participating agency. And it requires the discipline and patience to follow the steps that are required. 

Our challenge at BBCetc is to harness that passion and help entrepreneurs keep an eye on the prize – funding to go to the next phase; one step closer to commercialization. We are their best friends, worst critics and most ardent editors, but we keep them on task and on deadline.

• They don't know about the Michigan SBIR/STTR Assistance Program, or worse, that the federal programs exist at all. 

My advice to all the tech-based researchers and idea people out there? If you want to cross the "Valley of Death" and "Come back when…," Google SBIR and STTR – and then come see us.