The federal agencies that spend $3 billion each year in research grants are visiting Vermont for the first time next month to introduce themselves to local entrepreneurs.
Program managers from 11 large agencies including the Department of Energy, Department of Defense and the National Institutes of Health will sit down individually with Vermont entrepreneurs at a University of Vermont event to hear about their work and help them assess whether they are candidates for grants that could help them turn their ideas into businesses.
In the past, these Small Business Innovation Research, or SBIR, grants have helped Vermont companies move from an idea to commercialization. David Bradbury, executive director of Vermont Center for Emerging Technologies, or VCET, estimated that businesses associated with VCET have won $7 million or $8 million in SBIR grants over the last several years. Many more Vermont companies could apply for the 5,000 annual awards, he said.
“If you think about the breadth of what the federal government wants to solve around climate, health care, defense, food systems, virtually any company that isn’t a pure retail operation may find relevance there,” said Bradbury, who will speak on a panel discussion after the event.
Creative Microsystems Corp., which makes augmented reality displays, has won between $8 million and $10 million in SBIR grants over the years, said co-founder Bill Parker. The Waitsfield company, which has 26 employees, has long worked with the Navy and other federal agencies, and is now getting ready to commercialize its technology for the first responder market.
Creative Microsystems received its first SBIR grant in the 1990s; it has won about 15 of the grants since, said Parker. The money enabled the company to continue doing research.
“It was critical, because it gave us the freedom to step outside of our commercial work and do things that were interesting where we didn’t have a product yet, and didn’t have a way to generate revenue,” Parker said. “It allowed us to come up with a proposal of how we would provide it to the government as a customer, and that’s a leverage piece that’s very important. The time that it takes to do this work costs money.”
Other Vermont companies that have won SBIR funding include BioTek Instruments Inc. in Winooski, Green Mountain Semiconductor and Packetized Energy in Burlington, GreenSea Systems Inc. in Richmond, and Benchmark Space Systems in South Burlington. SBIR publishes a full list of the awardees on its website, and it includes companies outside of Chittenden County, such as Healthy Design Ltd. Co. in Rutland County and Concepts NREC in White River Junction.
The Sept. 16 SBIR Road Tour is a rare opportunity for people in Vermont to speak directly with the program managers. Normally the SBIR tour visits large cities; it has never visited Vermont, said Darcy Carter, director of the U.S. Small Business Administration’s Vermont office — and that’s reflected in the relatively low number of SBIR grants to Vermont companies.
“Vermont is a small state, but we would kind of be at the back of the line a bit in terms of how many awards we’ve gotten,” said Carter. “There is more opportunity out there.”
In a face-to-face meeting, Carter said, entrepreneurs can find out more about what the federal agencies need.
“You can be someone who doesn’t even have a business yet, but you have an idea,” she said. “Based on your skill set and what interests you, you can do some match-making with these agencies and what they are looking for.”
The SBA’s Small Business Development Center is working with the multitude of local entities that exist to help entrepreneurs commercialize their ideas, including UVM Innovations, the state Agency of Commerce and Community Development, Vermont Technology Council, VCET, the Vermont Technology Alliance, Generator Makerspace, Vermont EPSCoR, LaunchVT and others.
“Everyone is trying to refer people to the best resources to get to the next step,” Carter said. “There have been plenty of awards given in Vermont, but there’s a lot more opportunity out there.”
In 2016 – the last year that SBIR posted its annual report online – 11 federal agencies awarded $2.6 billion to small businesses through SBIR and STTR, the federal government’s small business technology transfer program. The grants are known as non-dilutive capital, meaning they aren’t a loan, and the grantors do not take an equity position in the company.
SBIR grants are awarded in two phases, with the first phase a smaller amount, usually about $150,000, and the second phase from $750,000 to $1 million.
For Creative Microsystems, the first $75,000 grant in the mid-1990s enabled Parker and his wife Julie Parker, who is the co-founder, to develop an early idea.
“We already had a pretty good idea of what we needed to do; we just didn’t have the freedom or the funds to do it on our own,” said Parker. “We put together a prototype, and it got picked up by the technical press, and that led to additional support from NASA, and that went on to put us into visibility.”
Creative Microsystems has since won contracts with the U.S. Army, Navy, Marines, Air Force, U.S. Special Operations Command and NASA.
SBIR grants are competitive, and the application process is long and complex; Parker said it takes his company about a month to write a Phase II proposal. And applicants might wait nine months or more to find out if they were awarded a grant. The state, the feds, and various local partners used to pay for a commercialization adviser that helped companies apply for SBIR grants, but the position was eliminated, said Bradbury. He’d like to see the position restored.
“It takes some skill and nuance to know how to speak with a program manager and learn some of the specifics of the application,” he said. “It really isn’t easy for a generalist or a first-time entrepreneur to understand and be really competitive with their application.”
That said, Bradbury sees the Sept. 16 event as a valuable opportunity for Vermont entrepreneurs.
“We’re recommending it to all of our contacts, and we worked with 259 companies last year,” he said.
This year’s Northeast SBIR tour, which was held at the University of New Hampshire last year, is also aimed at entrepreneurs in Maine, New Hampshire, New York and Massachusetts. It runs from 7 a.m. to 3 p.m. Sept. 16 at the University of Vermont’s Dudley H. Davis Center.
“They’re very approachable,” said Carter of the program managers. “They are really making that effort to make sure women-owned businesses, minority-owned businesses are going after these opportunities. That’s their mission: To pay attention to small businesses. A lot of innovation starts with the smallest businesses.”
