developing the business of technology phase ii proposal development presented at: 15 th annual nih...

Developing the Business of Technology

Phase II Proposal DevelopmentPresented at:

15th Annual NIH SBIR/STTR Conference

October 22, 2014Lisa M. Kurek

Managing Partner

[email protected]

www.bbcetc.com

734.930.9741

Copyright © 2014 BBC Entrepreneurial Training & Consulting, LLC

Phase II Proposal Development

Assumptions (since we only have 90 minutes…)

Phase II Planning

Review of Key Proposal Components

Elements of a Commercialization Plan

To be covered:

Introduction to SBIR/STTR

You meet the Phase II eligibility requirementsEligible small business

The small business has company controlled research facilities

The small business has research personnel

You have received an NIH Phase I award

You have or will have achieved your Phase I aims

Funding Cycles match your commercialization goals

Assumptions

4

The Project: What Does SBIR/STTR Fund?

PRODUCT Development

Based on “technological innovation”

“high risk”

Credible Commercialization Strategy

Phase II SBIR/STTR: Where Does it Fit?

5

3+ Years, ~$1,150,000+

Phase I: 6 Months, $150K+

Phase II: 2 Years, ~$1,000

K+

Phase III: Commercialization (no federal SBIR/STTR $$)

SBIR/STTR: Planning 3 Phases

Phase I Goal = FEASIBILITYFeasibility of what? Whatever you hope to accomplish in Phase II!

Phase II Goal = Further R&D

How far? You decide based on…

ULITMATE GOAL= COMMERCIALIZATION!

Goals

6

Phase II Proposal Development

Update scientific literature search and market research

Write Commercialization Plan

Acquire and Analyze Phase I data

Demonstrate FEASIBILITY

Plan experiments/R&D activities

Convene the technical team

For Phase II and beyond…

Secure facilities and other resources

Planning

NIH Review Criteria

SignificanceSignificant Science

Significant Product

Significant Commercial Opportunity

Investigators

Innovation

Approach

Environment

8

IMPACT

Writing the Proposal

What you are going to do?

Why is it worth doing?

Who is going to do the work?

Where are you going to do the work?

How much will it cost?

Primary Questions to be Answered

Consortium/Contractual ArrangementsLetters of SupportResource Sharing PlansAppendixBibliography and Refs CitedProject Summary/Abstract (30 lines)Public Health Relevance Statement/NarrativeSenior/Key Person ProfilesBiographical Sketches (4 pg ea.)Facilities & Other ResourcesEquipmentProject BudgetSubaward BudgetCover LetterCommercialization Plan (12 pg)Forms

Introduction to Application (1pg)Specific Aims (1 pg)Research Strategy (12 pg)

SignificanceInnovationApproach

Inclusion Enrollment ReportProgress report/Publication List (Phase II proposals only)Protection of Human SubjectsInclusion of Women and MinoritiesTargeted/Planned Enrollment TableInclusion of ChildrenVertebrate AnimalsSelect AgentsMultiple PD/PI Plan

Components of an NIH SBIR/STTR

Which sections?

What you are going to do?

Why is it worth doing?

Specific Aims Section

Research Strategy

Commercialization Plan

Specific Aims

Single and most important page of application

Sets out what you intend to do

An Executive Summary of the Proposal

12

Specific Aims -- Outline

The CompanySignificance

Problem to be solvedGap in knowledge

The ProductTechnological InnovationImpact

Long Term GoalRationale for the goal

Phase I Results (“feasibility”)

13

PAGE LIMIT: One PAGE

Phase II Project:Phase II HypothesisSpecific Aim 1…

F Criteria for acceptanceSpecific Aim 2…

F Criteria for acceptanceExpected Outcomes

F Proof of FeasibilityCommercial Application

Aims vs. Activities

Specific Aims = Objectives

Either achieved or not

Do not yield results/data

Have measurable, desired end points

Tasks = Activities

Steps to achieve your aims/objectives

Make up your work plan

They are performed or carried out

Yield results &/or data

Research Strategy

Significance

Innovation

Approach

15

Significance

Significant product

Significant science/technological innovation

Significant need in the market

Significant commercial opportunity

Use references!

Demonstrate:

16

Important Reminder

A good idea is necessary but not sufficient

17

Research Strategy – BBC Outline

Problem to be solved

Product to be developed

Impact of proposed product to provide a solution

Impact of product/innovation on state of the science/technology

Value of the solution to the problem

Commercial Potential (summarize…. Detail in commercialization plan)

Market analysis

Competition (competing technologies and competitors)

Commercialization strategy

Other applications of the technology

Significance – Make the Reviewer Care!

18


The technological innovation (describe)

Relevance to current state of the science

Why is it innovative?

How does it move the field forward?

What future advancements will this innovation enable?

Innovation

19


Phase I Progress Report

Beginning and ending dates of Phase I

Summarize Phase I Aims

Results and conclusions (achievement of aims)

Describe any significant changes to aims/new directions

Summary

F Demonstration of Feasibility

F How the outcomes support the Phase II

F Technology developed, intended use, status of product development

Approach

20

Research Strategy - outline

Restate Specific Aim

Rationale

F Give the reasoning behind the aim

Experimental Design & Methods

F Lay out what experiments (in detail) will be conducted to complete the

aim and methods to be employed in each experiment

Data Analysis & Interpretation

F How will you will analyze the data?

Potential Pitfalls / Alternative Approaches

F What could go wrong and how will you compensate if it does?

Expected Outcomes

F What do you expect to happen?

Approach

21

Summary

Tell the reviewers:

What (Specific Aims)

Why (Significance, Innovation, Phase I feasibility)

How (Research Strategy)

Summarize who, when and where:

Gantt Chart

F Detailed timeline for project

F Details who will be responsible for completion of each aims

F Where the work will be done (company, subcontractor etc.)

22

Gantt Chart (who, when, where?)

Specific AimsMonth

1 2 3 4 5 6Specific Aim 1

Experiment 1

A. Scientist, Ph.D.NewCo. Labs

Experiment 2

A.N. Scientist, Ph.D.NewCo. Labs

Specific Aim 2

Experiment 1

A. Engineer, M.S. MidWest University

Specific Aim 3

Experiment 1A.N. Scientist, Ph.D.

Research Co. 2

Which sections?

Who is going to do the work?

Where will the work be done?

How much will it cost?

Biographical Sketches

Facilities and Resources

Letters of Support

Budget and Budget Justification

Key Personnel: Build a Strong TEAM!

25

Your (the SBC’s) employees

Includes the PI if SBIR

If STTR should have at least 1 (may include PI)

Subcontractor’s employees

Consultants

Other Significant Contributors

e.g. “advisors”; 0% effort on project (think ahead to Phase II and

commercialization)

Consortium/Contractual ArrangementsLetters of SupportResource Sharing PlansAppendixBibliography and Refs CitedProject Summary/Abstract (30 lines)Public Health Relevance Statement/NarrativeSenior/Key Person Profiles

Biographical Sketches (4 pg ea.)Facilities & Other ResourcesEquipmentProject BudgetSubaward BudgetCover LetterCommercialization Plan (12 pg; Ph II & Fast Track only)Forms

Introduction to Application (1pg)Specific Aims (1 pg)Research Strategy (6 or 12 pg)




27

Position where you will be doing the work

Make sure to list the small business for all personnel that will be working there at the time of award

CRITICAL!!

28

Don’t forget relevant items such as patents or other product development accomplishments

Consortium/Contractual ArrangementsLetters of SupportResource Sharing PlansAppendixBibliography and Refs CitedProject Summary/Abstract (30 lines)Public Health Relevance Statement/NarrativeSenior/Key Person ProfilesBiographical Sketches (4 pg ea.)

Facilities & Other ResourcesEquipmentProject BudgetSubaward BudgetCover LetterCommercialization Plan (12 pg; Ph II & Fast Track only)Forms





Facilities and Resources – include:

Company’s Research Facility(s)

Subcontractors’ Research Facilities

Other R&D ResourcesOther Significant Contributors (e.g., Scientific Advisory Board)

Commercialization ResourcesManagement

Strategic Partners

Funding

Regulatory/Reimbursement

30

Critical for Phase II!(briefly summarize here; details in commercialization plan)

Consortium/Contractual ArrangementsLetters of SupportResource Sharing PlansAppendixBibliography and Refs CitedProject Summary/Abstract (30 lines)Public Health Relevance Statement/NarrativeSenior/Key Person ProfilesBiographical Sketches (4 pg ea.)Facilities & Other ResourcesEquipmentProject BudgetSubaward BudgetCover LetterCommercialization Plan (12 pg; Ph II & Fast Track only)Forms





Letters of Support

Consultants (required); must include:Role, Rate Time

Subcontractors

Other Significant Contributors

Research Resources, e.g.Facilities, equipment not on budget or owned by company

Commercialization Resources, e.g.:Strategic Partners

Investors

Key Customers

Validate your resources and opportunity

32

Letters of Support

Landlord to validate leasing arrangements and/or

confirm facilities (e.g. incubator space)

Resource providers (e.g., facilities not being paid for,

equipment not owned or being purchased)

Commercialization partners (e.g, investors, strategic

partners, key customers)

33

Direct Costs

E.g., Salaries, supplies, equipment, travel, consultants fees,

subcontract costs

Indirect Costs (F&A) 40% of TOTAL direct costs for Phase I (Includes fringe benefits)

OR

Request higher rate IF you can support it through a negotiation with DFAS

Fee

7% of total costs (direct and indirect)

Unallowable Costs

Budgets

Make sure to justify your direct costs extremely well.

Budget approach

Work backwards to determine the direct dollars

When a cap or restriction is enforced

IF Budget Cap = $1,500,000

Direct costs = $1,000,000

Indirect costs = $1,000,000 x ~40% $400,000

Fee = ($1,000,000 + $400,000) x 6.99% $97,860

TOTAL: Direct + Indirect + Fee $1,497,860

Therefore – design your project to fit $1m directs

Commercialization Plan Elements

NIH Proposed Layout

Value of SBIR/STTR project

Company information

Market, Customer, Competition

Intellectual Property Protection

Finance Plan

Production and Marketing Plan

Revenue Stream

No more than 12 pages

36

Commercialization

There is no such thing as the

“Build it and they will come”

Business Model

37

Commercialization

Technology

This is NOT a feasible business model:

What is Commercialization?

Ability to provide a solution to a problem in exchange for money

Targeted and Differentiated Solution

Important Problem

Viable Business Model

39


1 - Value of this SBIR/STTR project

40

1 – Value of THIS SBIR

Lay description of key technology objectives (features & benefits)

Need addressed – weakness in state of the art

What are the potential commercial applications?

What is the innovation?

Advantages compared to competing products, technologies or services

Societal, educational, scientific benefits

Non-commercial impact

How does project integrate into Company business plan?

41

42

Story

ReceptorPro: Part I


2. Company information

43

2 – Company Information

Corporate objectives

Core competencies

SizeAnnual sales

Number, type of employees

Track record Identify products with significant sales

History of previous Federal and non-Federal funding

Subsequent commercialization

Succinct history of the company

Vision for future

How will you fill management needs

How will you become a successful commercial entity

44

The Company

Brief History

Mission

What will you look like in 5 years?

45

46

Entrepreneurial Opportunities

Critical Success Factors

Combination of technical

& business expertise

Customer focus with a

well-defined target

segment

Proven business model

47

BUSINESS MODELS

License

Joint development

Fully integrated manufacturing, marketing, distribution

OEM

Distribution

ContractManufacturing

Management Team

Executive Officers

Scientific Advisory Board

Board of Directors

Business Advisors

Regulatory Experience

Recruiting Plans

48

Track Record

Applicant organization’s record of successfully commercializing SBIR or other research, if applicable

Existence of Phase III funding commitments from private sector $

Description of products/services with significant sales

Presence of other indicators of the commercial potential of the subject research

49

Company Vision

How will you grow your business?

How will you maintain that growth?

Where will you go to attract management talent?

Describe hurdles your foresee as the company becomes a commercial entity

Propose solutions!

50


3. Market, Customer, Competition

51

What it isn’t….

A Market Analysis is NOT a Commercialization Plan

52

Large Market ≠ Commercialization

Market, Custom, Competition per NIH RFP

Target market

Customer profile

Positioning (ie – product advantages)

Hurdles to overcome to gain acceptance (ie – barriers to entry)

Strategic alliances, partnerships, licensing agreements

To get FDA approval

To market and sell

Marketing and sales strategy

Competitive analysis

53

Why a Marketing Plan?

Foundation of Your Business

Primary Communication Tool …inside & outside the company

Source of company goals, milestones, and measures of progress

54

55

Do your homework a.k.a. – MARKET RESEARCH

For the computer savvy

For the socially adept

56

What you need to know...

The MarketMarket size and growth

Customer profile

Sales and market share projections

Pricing and margin analysis

Competitors

Market trends

57

Story

XYZ Technologies: “Beseech Them…..”

58

Market Analysis

59

Market Analysis

Potential

Addressable

Accessable

Product Positioning

Prod

uct U

niqu

enes

s

Customer Needs

3

1

2

2: Big Need Many Products3: No Need Many Products

Big Need Unique Product

1: No need Unique Product

60

61

Put your product description through the “so what” test

62

Competitive Analysis

Competitive Products

What are the alternatives?

How are these products sold now?

What is their price?

How big is their market share?

What is their intellectual property position?

63

Competitive Companies

Who are they?

How large are they?

Are they developing something new?

Are they a potential partner?

How do you intend to compete?

64

65


4. Intellectual Property Protection

4. Patent / IP Status

List and describe importance to THIS project

Clearly explain the company’s right to use the intellectual property

Discuss how the IP fits into the broader base of IP in the competitive landscape

Detail the plan to protect any subsequent IP

HOW DOES YOUR IP ENABLE YOUR BUSINESS STRATEGY??

66

67

Story

ReceptorPro: Part 2

“Rights” to Commercialize

If you are an academic or employed elsewhere:

READ and KNOW your institution’s Intellectual Property Rights Policy

Assume the institution owns the IP unless proven otherwise

Beware of public disclosure

Beware of conflict of interest issues

Transfer is based on negotiation and a viable business opportunity

68

69


5. Finance Plan

Finance Plan

How much $ is necessary to develop the product?

When will the $ be required?

Where will the money come from?

How much $ is necessary to commercialize?

When will the $ be required?

Where will the money come from?

70

Finance Plan

What are your plans to raise $ for commercialization in Phase III?

Letters of commitment of funding

Letters of intent, evidence of negotiations

In-kind commitment

Letters of support

Detailed steps to secure funding

71

Financing Sources

$ SBIR/STTR firm itself $ Private investors or

"angels" $ Venture capital firms $ Investment companies $ Joint ventures, R&D limited

partnerships, Strategic alliances

$ Research contracts

$ Sales of prototypes (built as part of this project)

$ Public offering $ State finance programs $ Non SBIR-funded R&D or

production commitments from a Federal agency with the intention that the results will be used by the United States government

$ Other industrial firms

72

73


6. Production and Marketing Plan

(or…. “Operations” and anything else that is relevant that you haven’t included already)

74


7. Revenue Stream

Revenue Stream

How will you bring in $$ to the company upon successful completion of project?

How will you grow your team to meet revenue expectations?

75

Generation of Revenue Stream

How will you bring in $$ to the company?

Manufacture/direct sales

Sales via distributors

Joint venture

Licensing

Fee for service

76

Sales Financials

Product sales and margin projections, to include:

Income:

Revenue from sale of product

Related licensing revenue

Expenses:

Cost of Goods

Other sales expenses

Bottom line in gross margin dollars and percent

77

Commercialization Plan Elements - Recap

NIH Proposed Layout

Value of SBIR/STTR project

Company information

Market, Customer, Competition

Intellectual Property Protection

Finance Plan

Production and Marketing Plan

Revenue Stream

No more than 12 pages

78

79

What is Commercialization?

Ability to provide a solution to a problem in exchange for money

F Targeted and Differentiated SolutionF Important ProblemF Viable Business Model

In summary….

80

A good planning process is crucial for commercial success!

Final Words….

Remember why the SBIR/STTR program is funding your company!

Develop your Commercialization Plan with the same scrutiny you give your Research Plan

Go for the IMPACT!

81

Developing the Business of Technology

Phase II Proposal DevelopmentPresented at:

15th Annual NIH SBIR/STTR Conference

October 22, 2014Lisa M. Kurek

Managing Partner

[email protected]

www.bbcetc.com

734.930.9741

Copyright © 2014 BBC Entrepreneurial Training & Consulting, LLC

developing the business of technology phase ii proposal development presented at: 15 th annual nih...

Documents

nih phase

phases phase

minutes phase

nih sbirsttr slide

business of technology

impact slide

pg specific aims

pg research strategy