What is START?
START is a program funded by the Commonwealth of Massachusetts to assist Massachusetts companies that have previously secured SBIR Phase II funding in turning their technologies into promising commercialized solutions. The program was created to assist high-growth companies that will grow employment opportunities, promote manufacturing and commercialization, and stimulate innovation across the Commonwealth. The primary objective of the program is to provide funding to commercialization-ready technology companies that have received at least the equivalent of a Phase II Small Business Innovation Research (“SBIR”) or Small Business Technology Transfer (“STTR”) grant from federal agencies such as the Department of Defense or the National Science Foundation, to name two.
Who is managing this program?
The START program is managed by MassVentures. The program is overseen by the President of MassVentures and is managed by a Program Manager, John Fitzpatrick.
Who is eligible?
Any Massachusetts applicant whose application to the program is not based on a life sciences or energy/clean/green-tech technology and has received a Phase II SBIR within the last four years (or, alternatively, has either gained ‘meaningful commercial traction” as defined below, within the past four years or the technology otherwise remains commercially viable today). It is expected that the qualifying Phase II SBIR would have been awarded by the Department of Defense or a federal agency other than the National Institutes of Health or the Department of Energy. A “Massachusetts company” is one that conducts its research, development, manufacturing and commercialization primarily in the Commonwealth of Massachusetts, and for the purposes of this program commits to continuing to do so. It is expected that START funds will be spent primarily in Massachusetts. MassVentures reserves the right to amend eligibility criteria in its discretion.
What if a company moves out of Massachusetts after receiving START funds?
The program requires that each recipient company be committed to remaining in Massachusetts at the time it receives START funds. Its plans must show that the proceeds from START shall be substantially spent within Massachusetts, using Massachusetts’ service providers. A company that does not comply with this provision will be ineligible for subsequent stages.
How much funding is available?
In 2012, the pilot program was allocated up to $6M for START Stages I, II and III over three years. Additional funds may become available to permit the program to continue its overall goal of making 10 new Stage I grants every year.
How much can my company receive?
A company may receive a Stage I grant of up to $100,000 for each successful application and, based upon progress demonstrated over the first year, an additional Stage II grant of up to $200,000.
If the company is then selected in Stage III, up to an additional $500,000 in the form of an equity or “equity-like” investment by MassVentures in the company or its SBIR-based spinout. Therefore, the most successful START applicants may thereby receive a total of up to $800,000. If a company is not selected for Stage II or Stage III, it is under no further obligation to MassVentures and may seek alternative funding. However, if selected for Stage III, the company will be obligated to either include MassVentures as a seed stage equity investor in the SBIR-based entity under terms and conditions acceptable to the company and all participating investors, or reach another form of arm’s-length commercial deal with MassVentures.
What is an “equity like” investment?
An “equity-like” investment in Stage III will be one designed to produce a commercial return on MassVentures’ invested risk capital. Possible structures for such an investment include, for example, a purchase of common or preferred stock, a loan with warrants to purchase stock, or royalties on products that include technology supported by MassVentures’ investment. An equity investment from a syndicate that includes MassVentures is another desirable outcome.
Can I apply directly for Stage II funds?
No. START will make all initial awards as Stage I grants. However, if a company achieves all of its Stage I goals in less than a year from the date of the Stage I grant, it may use any remaining funds to begin Stage II, thereby increasing its chances of being selected for a Stage II award. If Stage I or Stage II goals are achieved in less than a year from the applicable grant, MassVentures may in its discretion seek to accelerate funding for Stage III or “promote” a company directly from Stage I to Stage III, but will be under no obligation to do so.
What does MassVentures receive in return?
At the end of Stage I or Stage II, the company owes MassVentures nothing. If not selected for Stage II or Stage III, the company may seek alternative funding or license or sell its technology to others. Only if selected for Stage III is the company obligated to negotiate in good faith an “equity-like” investment by MassVentures in the SBIR-based venture on terms designed to provide MassVentures with a commercial return. The specific terms of such a commercial arrangement, should it occur, will be determined at the time of the negotiation.
How do I apply?
First, check the application process page for program updates. You can sign up for email notifications of program updates. On that site you will be able to access a formal request for proposals. At that time, you will have sufficient opportunity to contact the START program with any additional questions before the deadline for submitting your application. If you have had more than one SBIR Phase II that you believe should be considered, please submit a separate application for each. The application will consist of basic information about the company and its officers, the name of the proposed project manager, and the proposed uses of funds. A two page Executive Summary and accompanying Quad Chart (see next question for a description) must be submitted. No more than two pages plus the Quad Chart will be read, so do not submit additional information, brochures or other material for review.
What is a Quad Chart?
The basic format of a Quad Chart for this program is as follows:
|Upper Left Quadrant
||Graphical depiction of the product or service in its ultimate, commercial form.
|Upper Right Quadrant
||What is the market need for this product and why is this technology the enabling innovation?
|Lower Left Quadrant
||What is the current status of the technology and product development under or since Phase II?
|Lower Right Quadrant
||What are the milestones to be achieved in the next 12 months and how will START funding be used?
More details can be found here.
What are my chances for a Stage I grant?
Typically, over 200 SBIR Phase IIs are awarded each year to Massachusetts companies. Assuming at least half of these deal with technologies that are eligible for START funding, the past four years of SBIR Phase II recipients should yield approximately 400 candidate technologies. However, only those technologies that have real commercial potential will be considered for START, so the realistic universe of applicants will be somewhat smaller.
How will the winning companies be selected?
The evaluation factors will be published in the request for proposal. All START applications will be reviewed and scored by approximately 5 experts. 15-20 applicants will be selected for a 15 minute presentation, using their Quad Charts and other materials, to the judging panel. Stage I awards will be made by this panel with the concurrence of MassVentures. It is anticipated that 10 applications will be initially selected, along with two or three alternates.
What happens next?
Once selected for a START Stage I, each company will be entered into an agreement with MassVentures that will describe the commercialization goals of the Stage I effort and metrics for evaluation of the company’s progress in meeting these goals. While MassVentures will not direct the company to any specific vendor, it reserves the right to approve the vendor choices made by the company.
What are qualifying expenses?
Qualifying expenses are those expenses directly related to the commercialization of the technology that are pre-approved by MassVentures. Such expenses will include but are not limited to:
- Patent expenses incurred with approved law firms;
- Expenses relating to prototyping or product development with approved engineering firms;
- Expenses related to business plan creation with approved consulting companies;
- Costs of market research incurred with approved firms; and
- Other approved expenses related to commercialization of the technology.
We received our SBIR Phase II award more than four years ago. However, we have received our most recent SBIR funding for that technology within last four years. Are we eligible for the START program?
In order to be eligible for the START program, the first SBIR Phase II funding for the technology that is the subject of the START application must have been received after March 1, 2011.
Alternatively, if the first SBIR Phase II funding for the technology was received before March 1, 2010, the technology is still eligible for the START program if it has either (A) attained “meaningful commercial traction” within the last four years or (B) otherwise remains commercially viable today.
What constitutes “meaningful commercial traction or continuing commercial viability” will be determined by MassVentures on a case-by-case basis in its discretion. Examples of events that might constitute “meaningful commercial traction” include, but are not necessarily limited to:
- Significant sales of the technology (either to the federal government or to non-government commercial customers);
- Commercial contracts (for example, technology licenses or production/manufacturing contracts) or recent written communications from potential commercial partners, suggesting that sales are likely to be forthcoming; or
- Joint ventures, strategic alliances or other significant commercial collaborations.
START applicants whose technology received an initial SBIR Phase II funding prior to March 1, 2010 should specifically note this fact in the application and describe the “meaningful commercial traction” that has occurred more recently or the reasons for its continuing commercial viability.
We received our SBIR Phase II award from the National Institutes of Health, but our technology is not a life sciences technology. (Rather, for example, it is a health care information technology). Are we eligible for the START program?
If the commercial product based on the technology requires FDA approval to be sold to consumers, that technology is not eligible for the START program. Programs supporting such technologies are available through the Massachusetts Life Sciences Center. If you received your SBIR Phase II award from NIH, but the commercial product based on that technology does not require FDA approval, you are eligible for the START program.
If we are not interested in a START Stage III “equity-like” investment from MassVentures, are we still eligible to apply for Stage I grant?
Yes, applying for and receiving a START Stage I grant does not obligate a recipient to apply for later stages of the START program.
Would such a stated lack of interest in Stage III put us at a disadvantage for Stage I and II applications?
The START program is interested in creating high-growth commercial companies that will have a significant impact on the Massachusetts economy. Provided that an applicant has a well-designed plan to achieve this goal without a START Stage III funding, a lack of interest in such a funding would not necessarily disadvantage the applicant in Stages I and II.
My company received a qualifying SBIR Phase II funding but more recently my company was acquired. As a result of the acquisition, the new company is no longer eligible for the SBIR program. However, we would otherwise qualify for the START program. Are we eligible?
Yes, provided the technology would otherwise qualify for the START program and so continue to have the requisite potential to have a positive impact on the Massachusetts economy, the fact that the company was since acquired does not disqualify the applicant.
Can we see the proposed START Stage I agreement before submitting an application?
No. The proposed agreement will be issued after the application deadline. However, like the START application process itself, the agreement will be designed to be as simple and “user-friendly” as possible. Submitting an application for the START program does not obligate a company to enter into an agreement with MassVentures.
We have a proposal that is ITAR-restricted? Do you have a process to cover that?
Not specifically. Applications to the START program will be reviewed by external, independent reviewers. Also, MassVentures is unable to enter into confidentiality agreements with applicants. If the terms of your SBIR award would not allow you to submit a START application under these circumstances, please do not do so.
Only expenses with pre-approved MassVentures firms are allowed. Is there a process for having our preferred service providers approved by MassVentures?
Yes. The policy of requiring that START funds be spent with MassVentures-approved firms is designed to ensure that START funds are spent appropriately consistent with program goals. If a successful applicant desires to spend START funds on particular service providers, MassVentures will consider such requests.
Can we use START funds to do a piece of work in-house? If so, are overheads, reimbursable?
Yes. As indicated above, MassVentures is concerned with ensuring that START funds are spent appropriately consistent with program goals. If an applicant feels that a particular piece of work (for example, product prototyping) is most appropriately done in-house, MassVentures will consider such requests. The START program policy for reimbursement of overheads will be consistent with the SBIR policy on that subject.
My company received a qualifying SBIR Phase II funding within but the company is no longer a “small business,” so it is no longer eligible for new grants from the SBIR program. However, the technology that previously received SBIR funding would otherwise qualify for the START program. Are we eligible?
Yes, provided the technology would otherwise qualify for the START program and so continue to have the requisite potential to have a positive impact on the Massachusetts economy, the fact that the company is no longer a “small business” does not disqualify the applicant.
We received our SBIR Phase II award from the Department of Energy, but our technology is not related to power generation, energy storage, or other “clean tech/alternative energy.” Are we eligible for the START program?
If you received your SBIR Phase II award from the Department of Energy, but the technology is not related to power generation, energy storage, or other “clean tech/alternative energy,” you are eligible for the START program.
We understand that MassVentures cannot enter into non-disclosure agreements with START applicants. How should we handle our trade secrets under these circumstances?
Because the START program is focused on commercialization, your application should cover only what is necessary for the external reviewers to understand the commercial potential of the technology. You should not disclose any trade secrets or valuable proprietary processes in your application.
If a proposal is ITAR-restricted, do we still need to submit the full SBIR Phase II contract to MassVentures?
If you are selected to make a presentation to the START review board, you will need to submit to us your full SBIR Phase II contract. If the terms of your SBIR award would not allow you to submit a START application under the processes MassVentures has outlined, please do not do so.
To what extent are overheads reimbursable for a piece of commercialization work that is done in-house?
Overheads will be reimbursable at standard SBIR rates for in-house projects.
We received our first SBIR Phase I award more than four years ago, but we received our first SBIR Phase II award within the last four years. Are we eligible for the START program?
Yes. In order to be eligible for the START program, the first SBIR Phase II funding for the technology that is the subject of the START application must have been received after March 1, 2011 or, alternatively, the technology must have attained “meaningful commercial traction” within the past four year or otherwise remains commercially viable today.
Are there any particular technologies that MassVentures has an interest in funding under the START program?
No. The START program is focused on creating high-growth commercial companies that will have a significant impact on the Massachusetts economy. If the technology has the potential to fulfill that goal and it is otherwise eligible under the criteria for the program, it is a good candidate for this program.
Our SBIR Phase II is based on an advanced battery technology. Are we eligible for the START program?
Yes. Because battery technologies typically have a commercial impact beyond the energy sector (for example, in the consumer electronics or defense industries), they are eligible for START program consideration.