Tennessee may not be the first place that comes to mind when you think of technology and innovation, but Charlie Brock of Launch Tennessee aims to change that. In this article, he outlines big plans for the state and discusses how government grants are instrumental to the process.
Grants from the Small Business Innovation Research and Small Business Technology Transfer programs give early stage startups — especially those based on academic research — another vehicle through which to seek funding. In today’s competitive financing environment, these grants can help entrepreneurs who wouldn’t otherwise receive the money they need to start their businesses.
Launch Tennessee is in the second year of the Phase 0/00 Program, which was named for the Phase I and Phase II awards given to successful SBIR/STTR applicants. Launch Tennessee’s program is an application process that gives qualified candidates the best chance to be competitive. It is funded in part by a Federal and State Technology grant from the Small Business Administration.
So far in the program’s second year, Launch Tennessee Commercialization Director Jim Stefansic and Mark Henry, a nationally known SBIR/STTR expert and consultant, have screened and helped numerous companies with their applications. We’ve also held new events, including a workshop for academic research and development experts. At the workshop two weeks ago, Mark spoke about paid participation in research and development projects, ownership of funded small firms and leveraging academic preliminary data and intellectual property into the commercial marketplace.
The Phase 0/00 Program is part of the commercialization pillar of Launch Tennessee. Tennessee is home to many innovative research institutions, and there is huge potential for early stage startups to come from this research. To reach our ultimate goal of making Tennessee the No. 1 state in the Southeast for entrepreneurs to start and grow a company, we must capitalize on this research by commercializing it.
The Phase 0/00 Program is a step toward our ultimate goal, and commercializing research gives us another avenue to create high-growth companies. SBIR and STTR grant proposals are science-focused and typically take 100 to 200 hours to complete. This is an extensive commitment, but the potential end result can be well worth it for the applicant. Having the SBIR/STTR funds provides that much-needed runway to allow for further development, the achievement of which makes the company more attractive to other private capital sources, such as angel and venture capital investors.
We’ve already seen success through Phase 0/00. The initial version of Phase 0/00 — executed in the 2012 to 2013 period — helped two companies receive grants. One is East Tennessee-based Hubble Telemedical, which developed a device for detecting retinopathy. Based on advice received through our services, Hubble Telemedical applied for a grant from the USDA’s rural outreach program and won $500,000.
The other is Knoxville-based Inquiry Technologies, which has a video-based education product. Their grant application resulted in them receiving $170,000 in funding from the National Science Foundation.
Bringing more capital to Tennessee is always a good thing. We work with in-state and out-of-state venture capitalists and angel investors every day. These government grants are an excellent way to expand our resources and to give a different kind of startup a chance to receive funding. The government is interested in new science that is going to help our society, and government grants are perfect for high-risk ideas where the science needs more development time.
The USDA grant that Hubble won is a great example of the program’s value. Mark Henry has so much experience in this that he is able to identify better avenues to increase the chances of winning a grant. At the end of the program, all participants will have something meaningful for their business. Even if a company does not receive funding, it will have a better knowledge of future funding opportunities along with more clearly developed business concepts, goals and milestones.
Beyond helping startups receive capital, Launch Tennessee is focused on creating an environment that supports local entrepreneurs. This is accomplished through such efforts as the Phase 0/00 program. In turn, this will help the state’s economy and create jobs in Tennessee.
(This article was written by Charlie Brock, CEO of Launch Tennessee (www.launchtn.org), a public-private partnership focused on supporting the development of high-growth companies in Tennessee with the ultimate goal of making Tennessee the No. 1 place in the Southeast for entrepreneurs to start and grow a business.)