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OpEd: Minority/Women Tech Entrepreneurs: Don't Overlook Federal R&D Grant Money


Michael Kurek is a partner at BBC Entrepreneurial Training and Consulting (BBCetc), a nationally known firm that trains technology entrepreneurs and provides one-on-one assistance as they prepare R&D funding proposals for the federal SBIR and STTR programs.  Michael specializes in commercialization planning and is BBCetc's lead consultant for clients applying to the National Science Foundation, USDA, the Department of Energy, and other entities.

Over his 30-year career, Michael has held marketing, sales, and business development positions at one multinational corporation and four early-stage technology companies in the medical devices, bioinformatics, and laboratory robotics industries. Three of the technology companies were VC-funded and two completed successful IPOs. Michael earned a Ph.D. in genetics from Florida State University and an M.B.A. from Boston University. He joined BBCetc in 2002.

Minority/Women Tech Entrepreneurs: Don't Overlook Federal R&D Grant Money

Let me introduce you to Laketa Dumas, founder of R U Ready 4 BIZness. A passionate African American educator in Warren, Mich., Laketa has developed a first-of-its-kind role-playing entrepreneurship curriculum for students ages 16-28. The curricular textbook she has devised is presented entirely in story/skit format, using real-world scenarios and hands-on activities to walk students through each step of starting and running a business. Laketa is driven to spread her own infectious enthusiasm for entrepreneurship to others, and she has been a poster child for our MI FASTconnect program.

BBC Entrepreneurial Training & Consulting LLC (BBCetc) initiated MI FASTconnect last year thanks to grants from the Small Business Administration's FAST Program and the Michigan Economic Development Corporation. That's a mouthful, so before I go on let me connect the dots. 

BBCetc manages the Michigan SBIR/STTR Assistance Program, which enables our seven-person team to train and consult with Michigan entrepreneurs and small businesses in developing competitive proposals for federal R&D funding for their novel products and technologies. The federally mandated SBIR and STTR programs make $2.6 billion available to such firms in the form of non-dilutive grants and contracts annually. They are a great way for technology-based companies to secure funding when there is significant technology risk, and in fact, are often the only source of accessible funds for companies in the pre-seed stage.

To complete the circle, the SBA's FAST (Federal and State Technology) partnership provides grants to state-based organizations for outreach and technical assistance to science- and tech-driven small businesses as a means of supporting U.S. competitiveness. The program places particular emphasis on helping socially and economically disadvantaged firms to compete in the SBIR/STTR programs. Thus, one of the key goals of the MI FASTconnect program, which was re-funded in 2013, has been to foster and encourage participation in the SBIR/STTR programs by women and ethnically diverse entrepreneurs.

Historically, women- and minority-owned businesses have been underrepresented in the SBIR/STTR programs. The percentage of Michigan SBIR/STTR awards made to companies owned by women or minorities is in line with the national average (see table). However, because the actual number of awards is so small, even a modest increase would improve this percentage significantly.

Michigan  SBIR/STTR  Awards  to  Woman-  or  Minority-Owned  Companies  

   2010 2011 2012
MI Total Awards 191 141 118
MI Minority Awards 31 25 16
MI % Minority 16% 18% 14%
U.S. % Minority 14% 16% 16%

Source:  www.sbir.gov  

Getting information about SBIR/STTR to these population segments is challenging because it involves:
  1.  Finding the right people. Clearly, SBIR/STTR is not for everyone. These programs are for small businesses doing high risk, high impact work on technology projects that meet the strategic goals of the participating federal agencies. In other words, entrepreneurs with new, highly nutritious muffin recipes or deodorizing shoe inserts (yes, these are real examples) are not appropriate and therefore need not apply.
  2.  Reaching outside traditional media outlets and partnering with organizations that specifically serve under-represented groups who are also SBIR/STTR candidates.
Professional organizations like Women in Defense and the National  Society  of  Black  Engineers have been a great help in this effort, as have universities like Wayne State, and Michigan SmartZones™, like TechTown. But the numbers are still too small.  

What we need is more Laketas; people who, as she did, attend an informational meeting, receive a scholarship from the MI FASTconnect program to attend our agency-specific proposal preparation training, sign up for our state-subsidized one-on-one consulting, and submit an SBIR or STTR proposal to one of the 11 agencies (in Laketa's case, the National Science Foundation). This is how it is supposed to work and how it can work.

So why the emphasis on improving outreach to these groups when connecting is so difficult? According to the U.S. Census Bureau, ethnic minority populations will exceed 50% of the total US population over the next 25 years. The global economy is evolving, and there is competition from other nations where previously there was little. The bottom line is that the U.S. cannot maintain a competitive edge if such a significant portion of its population is not equitably participating in our innovation initiatives. 

The outcome for Laketa? Her first proposal was not funded by NSF. That's not a huge surprise as it's a competitive process, and most first-time attempts go unfunded. Is Laketa deterred? Hardly; she continues her charge to "change the world through entrepreneurship" and plans to re-apply, with enhancements to her technology that answer reviewers' concerns. According to Laketa, ''No" just means "not yet." She will have our full support and assistance as she goes through the re-application process.

In the meantime, look for her evolving selection of apps like Serving Solver or the coming Entrepreneur GPS available through iBooks. We're sold on Laketa. We hope others will follow her path.
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