Corrections or additions?
This article by Kathleen McGinn Spring was prepared for the October 30, 2002 edition of U.S. 1 Newspaper. All rights reserved.
Uncle Sam’s Money Can Attract VCs
You have a hot new hightech idea and you want to know
if you can get government money to help develop it. Go to www.sbirworld.com,
a site for the Small Business Innovation Research Program (SBIR) that
is funded by the National Science Foundation. Conduct a “key word”
search on two levels. Search on your core competencies for funding
that the government is offering now, and also for grants that were
made in the past, says Randy Harmon of the Technology Commercialization
Center. “The past is often a predictor of the future. So if an
agency once had a topic in the entrepreneur’s area, the odds are very
good the government will ask for that topic again.”
SBIR funding is definitely the best source of risk capital available
to help fund the development of promising new technologies, says Harmon,
and often it leads to equity financing. Harmon has organized the second
annual SBIR conference set for Tuesday and Wednesday, November 5 and
6, at Rutgers Cook College. At the conference, entrepreneurs can get
information that can help them compete more effectively for SBIR grants
and contracts. Cost: $150 at the door for two days, $90 for Tuesday,
and $60 for Wednesday. Call 800-432-1832.
Sessions on November 5 are open to companies that are new to this
program as well as to those with some experience. It would also be
good for attorneys, accountants, and others consulting to the technology-based
businesses. Gail and Jim Greenwood of the Greenwood Consulting
Group will lead the workshops. Speakers include John Tesoriero,
executive director of the New Jersey Commission on Science and Technology,
and Michael Conti of the New Jersey Economic Development Authority,
who will discuss the state’s seed capital program. Raymond Sasso
will cover the Rutgers Interfunctional Team Consulting Program.
The agenda will include a four-step process for writing a Phase 1
program for the SBIR grants or for another program, the Small Business
Technology Transfer (SBTT) grants. Rick Weiss, president of
Witherspoon-Street-based VioCare Technologies, will present a case
study showing how his business was able to leverage SBIR funds.
The SBIR Cost Proposal program is the topic for November 6, and Patrick
Alia of Amper Politziner & Mattia is among the speakers. SBIR and
similar projects have certain cost proposal and government accounting
requirements. “If you are not well versed in these areas, you
risk losing money on your SBIR grant or contract, perhaps by being
penalized for charging the government too much, or being unable to
justify certain expenses,” says Harmon. Included in this workshop
will be information on indirect costs, audits, and record keeping
requirements.
The good news is that you have a one in eight chance of landing an
SBIR Phase 1 grant. Once you get through Phase 1 you can apply for
Phase 2 and those odds are better — two in five. By that time,
you would have piqued the interest of equity investors. “Typically
the entrepreneurs focus on the technology and then on marketing and
business issues,” says Harmon. “But if they also address market
and business development risk during phase 2 they can get on the radar
screens of venture capitalists and angel investors.”
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