In This Issue ...

• One NC Small Business Program Funded
• NC SBIR/STTR Awards 2012-20 in Review
• NIH SBIR/STTR Funding Strategies Event in Review
• TABA: Additional Non-Dilutive Capital for SBIR/STTR Awardees
• DOE Opens SBIR/STTR Phase I Applications
• Key Takeaways for Entrepreneurs: ACA Angel Funder's Report
• Congratulations to NC IDEA Awardees
• Striking Similarities: Tech Commercialization and Parenting

On November 18, 2021, the North Carolina General Assembly and Governor enacted a Fiscal Year 2022 (July 1, 2021 - June 30, 2022) budget. The budget includes $5 million for the One NC Small Business Program. The budget has to be certified before a One North Carolina Small Business Program can be issued. As soon as it is complete, a solicitation will be available and notifications will be distributed to the media, previous grantees, and other organizations that work with SBIR/STTR applicants and grantees. 

As required by North Carolina General Statute 143B-437.82, the North Carolina Department of Commerce is publishing for public comment proposed amendments to the Guidelines for the Programs. Comments will be accepted for 15 business days beginning Tuesday, November 23, 2021. The amended, finalized Guidelines will take effect on December 16, 2021, and Program Solicitations will be available soon thereafter at https://www.nccommerce.com/grants-incentives/technology-funds/one-north-carolina-small-business-program.

For an overview of the Guidelines amendment process, see the following files:

• Overview of the One NC Small Business Program Guidelines Process
• One NC Small Business Incentive Program Guidelines
• One NC Small Business Matching Program Guidelines

A recent analysis of SBIR/STTR awards made to North Carolina small business over the past nine years demonstrated a number of interesting findings. In this period, 939 Phase I SBIR/STTR awards were made, followed by 452 Phase II awards. The 48% transition rate from Phase I to Phase II is above the national average. Total award dollars equated to over $718M made to 389 unique companies. The average number of awards made to these companies was 3.6.

SBIR/STTR Award Data for NC Companies, 2012-20

Of the 10 federal agencies represented, Department of Health and Human Service (NIH) accounted for 64.9% awards, followed by Department of Defense (DoD) with 22.7%, National Science Foundation (NSF) with 6.5% and Department of Energy (DOE) with 3.1%. The remaining six agencies represented less than 1% each. This data shows the key areas of research that NC small businesses tend to conduct but also leaves the door open to the possibility that more emphasis needs to be placed on some of the less well represented agencies.

Agency SBIR/STTR Award Breakdown for NC, 2012-20

Last month, the SBTDC’s Tech Team delivered a 2-half day training session that focused on NIH SBIR/STTR proposal development and commercialization strategies. This year’s NIH session was hosted in collaboration with UNC-Chapel Hill and Duke University. Over 230 registrants from NC and 35 other states learned from our team and a dozen other panelists and speakers. We appreciate the efforts made by the U.S. Small Business Administration and our state partners across the country to broadly promote the event.

For those NC small businesses that are planning to submit a SBIR/STTR proposal to NIH for the January or April deadlines, you are invited to reach out to our team to discuss your strategies around SBIR/STTR and proposal development. Following an initial meeting with us, recorded materials from the event will be made available on request.  

A recent SBIR/STTR policy directive enables federal agencies to help small businesses by funding vendors to support commercializing their innovations or by providing additional funding directly to small businesses so they can contract their own vendors and consultants for commercialization purposes. The directive allows for up to $6,500 in Phase I and up to $50,000 in Phase II. Agencies have discretion in determining if the funding provided for TABA support for Phase II awards will be included as part of the recipient’s award or be in addition to the amount of the recipient’s award. The agencies’ solicitation notices should describe how they are handling this decision. 

More information about the program guidance is available at: https://www.sbir.gov/node/2088581.

NIH offers a detailed overview of allowable and unallowable uses of TABA funding at https://seed.nih.gov/support-for-small-businesses/technical-business-assistance-program/taba-funding. 

Allowable uses can include but are not limited to:

• Assistance with product sales
• Intellectual property protections
• Market research and/or validation
• Development of regulatory plans
• Development of manufacturing plans
• Access to technical and business literature available through online databases

DOE Opens SBIR/STTR Phase I Applications

The Department of Energy has released two of its SBIR/STTR topics for FY22. The full funding opportunity will be issued on December 13. Letters of intent will be due on January 3. Full applications are due February 22, 2022.

Visit the DOE SBIR/STTR solicitations here.

Phase I awards of up to $200K over nine months fund projects that concentrate on research that will contribute to proving scientific or technical feasibility of the concept but may involve the development of a working prototype.

The Angel Capital Association (ACA) is the largest angel investing professional development organization in the world and includes membership of over 250 angel groups and over 14,000 individual accredited investors. Over the past three years, they have been surveying their membership annually, aggregating the data, and publishing the key findings in the ACA Angel Funder’s Report. The report provides a deep dive into angel investing trends and is a useful resource for both investors and entrepreneurs.  

Why it matters

Understanding the funding landscape and current investing trends helps entrepreneurs position their companies for successful capital raises. Viewing investors as customers of equity and understanding their perspective will put companies in a better position to discuss deal terms leading to more fruitful negotiations. The Angel Funder's Report is an amazing resource that provides transparency on critical topics like:

• Company profiles and investment timing
• Typical deal profiles
• Company valuations
• Exit strategies
• Diversity in angel investing

We aggregated some of the key findings from the 2021 ACA Angel Funder's Report below and discuss what it could mean for NC entrepreneurs. You can access the full report and figures here.

NC IDEA recently announced its Fall cycle of SEED grant awards were made to nine small early-stage startup businesses across North Carolina. The awards are $50,000 non-dilutive grants designed to enable more rapid growth. Since 2006, NC IDEA has awarded more than $8 million in grants to 178 companies. 

We are pleased that seven of the nine grant recipients are clients of the SBTDC. The SBTDC provides no-cost, confidential business counseling services to small businesses across North Carolina. 

A full press release, including overviews of the awardees, is available at:

https://www.wraltechwire.com/2021/11/12/nine-startups-land-50000-grants-from-nc-idea-heres-a-look-at-the-winners/.

Striking Similarities: Tech Commercialization and Parenting

Akin to raising a child, building a business around a commercializable technology from birth is a long, stressful, although mostly exhilarating process. The day your business is born may be one of your most memorable experiences. The horizon appears limitless and your dreams abound. However, challenges arise. The first ear infection, the crying and sleepless nights. The first money into the business, often SBIR/STTR Phase I, acts to soothe the business and get it on track to direct the technology to the point where it can start to crawl and then walk. Often the first submission of a Phase I proposal does not lead to funding. The crying nights continue, until after two or three resubmissions, the project is finally funded.  

The results of the Phase I research prove that your baby, once just a glimmer in your eye, has great potential. The next major challenge becomes potty training. You try over and over and over. Sometimes it works and sometimes not, until one day the diapers are just a memory. Developing a Phase II proposal, which includes a detailed commercialization plan is a similarly cumbersome and time consuming task. A commercialization plan requires countless hours of interviewing potential customers, follow-on investors, and researching competitors. Most people you reach out to do not respond and you begin to think that raising a technology is more than you bargained for. But, perseverance and patience reign. You stick with it and after several months, you have the information you need to wrap a compelling business case around your technology. 

The first day of kindergarten arrives and you wonder where all the time has gone. Your child is now in a diverse environment where he/she can blossom and thrive. As your Phase II SBIR/STTR is funded and work commences, over the next two years, your technology blooms. Your research is for the most part is complete and development ensues. The technology is field tested, re-worked, and field tested again. There are numerous bumps in the road. You receive a letter from your son’s grade school teacher explaining that he is not turning in his homework and is receiving a D in math. You are perplexed and wonder what is going on. You work out the complex technical kinks in the technology, over many sleepless nights, and the finally the Phase II work is completed. Your team is extremely proud that the solution you had originally hoped to create in your technology is now a reality. It seems like the most difficult part is behind you now.  

MORE SBTDC TARGETED SERVICES

SELLING TO THE GOVERNMENT

The SBTDC's Government Contracting Assistance Program educates business associates on how to obtain contracts by providing comprehensive assistance in selling products and services to local, state, and federal government agencies.

Learn more >>

INTERNATIONAL BUSINESS DEVELOPMENT

The SBTDC's International Business Development Counselors assist small and mid-sized businesses with export planning and exporting.

Learn more >>

The Technology Commercialization Services team provides one-on-one business counseling and advice to: small business owners, university researchers, and entrepreneurs looking to advance their innovations to the marketplace.

For more information, click here.

NICOLE SCHWERBROCK

Director, Technology Development & Commercialization

Statewide

RACHEL BURTON

Technology Commercialization Counselor

Eastern NC

MIKE CARNES

Technology Commercialization Counselor

Eastern NC

BRYAN DENNSTEDT

Technology Commercialization Counselor

Western NC

JOHN UJVARI

SBIR/STTR Specialist & Newsletter Editor

Statewide

CHRIS VEAL

Technology Commercialization Counselor

North Central NC



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