"Smart Answers" columnist Karen E. Klein talked to Hoffman about how his company landed the grants and about an SBIR conference coming up in Anaheim, Calif. What follows are excerpts of that interview:
Q: At "Smart Answers," we get a lot of questions about government grants for small business, and 99% of the "free money" that is touted on late-night infomercials and Web sites turns out to be nonexistent. What are the SBIR and STTR programs all about?
A: The SBIR and STTR are legitimate government programs that distribute more than $1 billion annually to researchers with innovative ideas. The are designed for small businesses that develop products or services that can be used by the 10 federal agencies that participate: Agriculture, Commerce, Defense, Energy, Education, Health & Human Services, Transportation, the EPA, NASA, and the National Science Foundation. Links for all the SBIR and STTR agencies are
located at: www.sbirworld.com/federalAgencyLinks.asp.
Q: What kinds of businesses are these grants aimed at? Is the local restaurant owner or dry cleaner going to have a shot at getting one?
A: No. The programs are heavily oriented towards research and development of new products that can benefit both government agencies and the public. The standards for the program are very high and you need to have qualified researchers involved in preparing your applications. It's an ideal opportunity for, say, entrepreneurial faculty members at universities who want to spin off businesses and need funding to develop their products and ideas.
Q: How did you learn about the grants and use them to fund your company?
A: Before I founded Danya International, I worked at a Washington, D.C. company that specialized in drug-treatment services and had gotten several SBIR grants for its narcotics abuse prevention programs. When I started Danya in 1996, I had no capital and no investors, but I knew how to apply for SBIR funding and I knew we could be successful if I could get money through it.
We eventually got some grants and got contracts with the NIH to do smoking-cessation curriculum for high school students, and after we got the funding, we were able to hire staff members and expand into other health-communications projects. Now we do $25 million in business annually and have an in-house multidisciplinary staff of 70 that includes health professionals, graphic designers, and Web and video producers.
Q: How difficult is it to secure the funding?
A: It's not easy. It's a typical government-application process that involves a lot of paperwork and takes a lot of time. It's also highly competitive. It can take anywhere from several months to a couple years before you get your first funding, but once you learn how to apply for these programs, they can be a very valuable asset to a growing company. Many companies hire consultants to advise them on their applications. I'd advise companies not to rely on the grants for their existence, but to consider them as an excellent source of supplemental funding.
Q: How do small R&D firms that might qualify for SBIR or STTR get more information about the programs?
A: They can visit several Web sites, starting with SBIR World, www.sbirworld.com, and the SBA's site. The federal agencies I mentioned all have their own Web pages on the programs, also. But the best way to learn the basics is to attend a conference and find out about grant writing, what kinds of opportunities are available, and meet reps from all the federal agencies involved.
Q: What's going on at the upcoming conference?
A: It's being held at the Hyatt Regency Orange County, in Anaheim, Calif., from March 11 to March 14. Our keynote speaker is Klein Gilhousen, PhD, a QUALCOMM founder and the inventor of technology that's now used in millions of wireless networks and handsets. He started with a great idea but no way to fund it, and the money he got from the SBIR program helped him on the way to major success. There are 25 speakers who will address participants at the conference, which is being sponsored by the National Science Foundation.
Q: Is it too late to attend? Are there other opportunities later in the year?
A: You can still register by contacting Sharon DelaBarre at 360 683-1828 or by e-mail at: firstname.lastname@example.org. And we also have conferences scheduled for June and October of this year. Check the schedule at SBIRWorld.com for times and dates. Have a question about running your business? Ask our small-business experts. Send us an e-mail at email@example.com, or write to Smart Answers, BW Online, 46th Floor, 1221 Avenue of the Americas, New York, NY 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.