Small Business Innovation Research grants provided the stepping stones for two Santa Fe companies, Woodruff Scientific and Mesa Photonics, to convert their once-fledgling startups into profitable businesses.
Both received multiple SBIR grants over the years, including two new awards from the U.S. Department of Energy in late July.
The grants, managed by the Small Business Administration, provide up to $1.2 million in funding from the DOE and other federal agencies to help small businesses with new, innovative technologies transform their ideas into marketable products and services.
Mesa Photonics won a new $1.1 million grant to add more capability to the high-tech instruments it’s created for measuring pulses of light emitted by ultra-fast lasers, which are used in everything from high-precision machining to eye surgery. That brings Mesa’s SBIR funding to about $10 million since 2008, allowing it to grow its laser-measurement company into a profitable business with about $500,000 in annual revenue and 10 employees.
Woodruff Scientific received a new $1 million grant, its fourth award since 2005 for a total of $4.6 million in SBIR assistance to date. That company builds components like magnets, power supplies and sensors used in fusion energy systems. Its latest SBIR award will help Woodruff build a new system that allows researchers to view complex data in a 3D virtual reality environment that can be shared among multiple users.
Woodruff now employs seven people in Seattle, and nine at its headquarters at the Santa Fe Business Incubator. It averages up to $1.5 million in annual revenue with its current products, and expects to start marketing the new 3D data virtualization system over the next year, said company co-founder and CEO Simon Woodruff.
“SBIR funding has been instrumental to our success,” Woodruff said. “It’s provided the seed investments we needed to do what we do…It’s not an end in itself, but a stimulus to keep innovating and developing our products.”
For Mesa Photonics, SBIR assistance has been a lifesaver, said founder and CEO Daniel Kane.
“We wouldn’t exist without it,” Kane said. “We never would have developed or sold these products without the SBIR program.”
Like Mesa and Woodruff, hundreds of New Mexico companies have accessed SBIR grants over the years to gain the seed funding they need to navigate the early stages of building and proving new technologies before taking them to market.
The program can provide a critical bridge for startups to transverse the infamous “Valley of Death” – the gap between a great idea proven in a lab and its development into a proven prototype that can attract the private equity and market interest needed to move forward.
But it’s hard to win grants through either the SBIR or the Small Business Technology Transfer program, a related initiative that also provides funding for companies working with federally backed research institutions to commercialize new technologies.
Awards are approved through a competitive process with thousands of companies applying nationally every year. The programs provide more than $3 billion annually through the DOE and 10 other federal agencies, such as the National Science Foundation, the Department of Defense and the National Institutes of Health.
The agencies award two types of grants, including “phase I,” six-month awards of up to $150,000 to prove a technology’s viability, followed by up to $1 million more for two-year, “phase II” grants to build a working prototype that companies can begin commercializing.
Companies must wade through a complex application process that matches their technology innovation with real needs at the funding agencies, following strict guidelines and requirements when applying. It’s often a difficult, cumbersome process for resource-strapped small businesses.
To help more local startups gain access, the SBA organizes a national “road tour” every year, through which representatives from all the SBIR and STTR funding agencies meet directly with businesspeople at events in select states.
This year, the road tour is coming to New Mexico for the first time, with a one-day conference taking place at the Albuquerque Convention Center on Wednesday, Aug. 14. The event will include panel discussions and presentations for participants to learn more about the programs, how to access them, and the kinds of technology innovation agencies are seeking. It will also provide one-on-one consultations to connect businesspeople directly with program managers from all the federal agencies, said Dana Catron, director for the Federal and State Technology (FAST) Partnership Program managed by New Mexico State University’s Arrowhead Center.
“It’s really rare for the program managers from all the SBIR agencies to be at one place at one time outside of national conferences,” Catron said. “This is a real opportunity for small businesses in New Mexico to get direct face time with them.”
NM SBA District Director John Garcia said he pushed for the road tour to visit New Mexico giving the state’s budding startup ecosystem.
“There’s such entrepreneurial enthusiasm here to develop research and innovation in science and technology,” Garcia said. “The tour will bring all the information companies need to secure SBIR contracts.”
Participants can also learn about local resources to assist them in applying for federal grants. That includes the FAST program at NMSU, which has received $125,000 annually since 2015 from the SBA to help businesses across the state. NMSU has provided assistance to some 120 companies to date to develop, write and submit proposals, Catron said.
The state’s Economic Development Department also offers matching grants for companies that win SBIR or STTR awards, providing $25,000 for businesses that achieve a federal phase I grant and up to $100,000 for phase II recipients. To date, the state has pumped $825,000 into 15 startups to further leverage the money those companies received from the federal agencies, said EDD spokesman Bruce Krasnow.
Conference participation costs $45. Individuals can pre-register at http://bit.ly/SBIR-ABQRoadTour, or just show up at the event, which runs from 8 a.m. to 5 p.m.
Startups can meet one-on-one with funding agency managers