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Tutorial 12: NSF

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Every SBIR or STTR program takes on the unique characteristics of the Agency in which it resides. The National Science Foundation, or NSF, SBIR and STTR programs are no exception. NSF supports fundamental research and education across all fields of science and engineering.

With an annual budget of approximately $8.1 billion, the National Science Foundation is the funding source for approximately 27% of all federally-supported basic research conducted by America’s colleges and universities. The NSF SBIR and STTR programs reside within the Division of Industrial Innovation and Partnerships, or IIP. Its vision is to drive the expansion of the nation’s innovation capacity by stimulating partnerships. It looks to enhance economic competitiveness by catalyzing the transformation of discovery into societal benefits. This vision shapes the implementation of the NSF SBIR/STTR programs which fund game-changing, disruptive technologies. NSF’s SBIR and STTR solicitations are extremely broad. You identify the problem or opportunity. You propose the technological solution and devise your business strategy. One of the hallmarks of NSF’s SBIR and STTR programs is its emphasis on commercialization. NSF was, after all, the first Agency to have an SBIR program and an emphasis on commercialization has always been its cornerstone.

With an annual budget of approximately $200 million, the NSF SBIR and STTR programs fund roughly 400 projects a year. The Agency’s sweet spot is early-stage, high-risk technology at the pre-seed level. The goal is to conduct research and development that overcomes significant technical hurdles in order to prove the feasibility of a new product, process, or service. Applicants are expected to think deeply about commercialization and develop solutions that could create significant commercial success and/or societal impact.

NSF provides grants, not contracts. Phase I awards are up to $225,000 to test feasibility and conduct proof-of-concept research over a 6-12 month period. Phase II awards are up to $750,000 and last 24 months. During Phase II the company is expected to engage in prototype development, scale up, and testing. Phase II applicants, by the way, must have received a Phase I NSF SBIR/STTR award.

The NSF program is unique in many ways. The Program Directors have deep technical and business expertise and directly provide guidance and mentorship to small businesses. The program funds highly technical R&D in broad technology areas. This list provides an overview of the technology areas of interest to the NSF SBIR and STTR programs. However, it’s important to keep in mind that NSF encourages proposals in all areas of science and engineering and an exact fit with one of these topic areas is not required.

NSF is start-up friendly as evidenced by the theme on its website “America’s Seed fund – powered by NSF.” In 2017, of the 293 companies that were awarded a Phase I grant, the median number of employees was three. Sixty-four percent of the awardee companies had been in business for less than three years. In FY17, the average selection or award rate was 12% for Phase I and 43% for Phase II.

In trying to determine if the NSF SBIR/STTR programs provide a good opportunity for you and your company – it is recommended that you consider two things: (1) Is this a genuine innovation – an approach that is highly disruptive and technically risky? That is what NSF is looking for – not evolutionary technologies, but those that are revolutionary in nature; (2) The second thing to consider is if you are organized to aggressively validate a market need and pursue commercialization. Again, that is expected at NSF.

Starting with the March 4, 2019 solicitation , all potential proposers must first submit a “Project Pitch” via the NSF SBIR/STTR Phase I Project Pitch online form. The cognizant Program Director will use the Project Pitch to determine whether or not the proposed project is a good fit with the objectives of the NSF SBIR or STTR program. If the Program Director concludes that there is a good fit, the small business will receive an official invitation via email from the cognizant NSF SBIR/STTR Program Director. You need this official invitation, in order to submit a proposal. More details on the new application process are clearly described in the March 4th solicitation. All interested parties are encouraged to read the Project Pitch guidelines carefully.

NSF believes strongly in the benefits of connecting with others and facilitates that connection via a number of supplements designed to encourage partnerships and commercialization. At the Phase II level, there is a Phase IIB supplement. At this stage of development NSF will provide a 1:2 match up to $500K – meaning that if you secure a $1M investment, NSF will provide an additional $500K. Another Phase II supplement is referred to as the TECP, which stands for Technology Enhancement for Commercial Partnerships. This program provides a supplement of up to $150,000 to SBIR or STTR awardees in order to pave the way for partnerships between strategic corporate partners and investors. The intent of this supplement is to provide funding for additional research that goes beyond the Phase II project’s objectives to meet the technical specifications or additional proof-of-concept requirements of the potential commercialization partner.

Apart from these supplements designed to encourage commercialization, there are others aimed at supplementing your team. These include educational partnerships with high school students, teachers, undergraduate students, and U.S. veterans, as well as institutional partnerships. Be sure to explore these.

Another program developed by the National Science Foundation is the I-Corps program, originally designed to capitalize on previously NSF-funded basic research and to nurture a national innovation ecosystem by helping discoveries from fundamental research to become new technologies that can benefit society. NSF also provides NSF SBIR/STTR awardees with I-Corps Boot Camp.

To find out more about the NSF SBIR/STTR programs be sure to visit the Agency’s website and listen to the tutorial regarding the NSF solicitation process.

NSF Success Stories

Course 2 Tutorial 12:


(1) NSF’s annual SBIR/STTR budget is approximately:

(2) The NSF SBIR/STTR Program Directors …

(3) True or False? NSF is looking for revolutionary technologies that are technically risky.

(4) The size of an NSF Phase I SBIR/STTR award is up to ...

(5) True or False: Most of the NSF supplements support SBIR/STTR Phase I awards.

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