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Program looks to boost grant funding for university start-ups in flyover states

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When it comes to SBIR and STTR grants, most of the awards go to universities located in urban areas, shortchanging those in more rural areas. There are many reasons for this discrepancy. Universities in more rural areas may not have a proactive Office of Technology and Commercialization, or there may not be a medical school on campus. Or, there may be confusion about eligibility and procedures for obtaining these grants.

A program funded by its own STTR grant is stepping into that void, helping universities in flyover country educate themselves and their potential entrepreneurs about not only federal grant funding opportunities, but also the broader challenges surrounding start-up creation.

While most universities in rural areas do have initiatives designed to assist entrepreneurs, few have a full suite of programs to assist early stage life science companies. The regions facing these barriers are targeted for help in the National Institute of General Medical Sciences’ (NIGMS) Institutional Development Award (IDeA) program, which is specifically designed to help states underrepresented in NIH funding to advance medical innovations through start-up creation.

In 2014, NIGMS — part of the National Institutes of Health — convened a workshop to more clearly understand the challenges the IDeA states experience in applying for and winning SBIR and STTR grants. As a result of that workshop, NIGMS requested applications to fund accelerator hubs in each of four IDeA regions. The Sustainable Heartland Accelerator Regional Partnership (SHARPhub) won the designation as the accelerator hub in the Central IDeA region, which includes Kansas, Oklahoma, Nebraska, South Dakota and North Dakota.

The hubs are funded by an STTR grant, which requires lead applicants from both a small business and from an academic institution. In SHARPhub’s case, the University of Kansas Medical Center (KUMC) is the academic partner, while BBC Entrepreneurial Training and Consulting LLC (BBCetc) — a firm that works with technology entrepreneurs through training and coaching to win non-dilutive funding — is the business partner. Douglas E. Wright, PhD, professor and vice chair of the Department of Anatomy and Cell Biology at KUMC, and Becky Aistrup, MBA, managing partner and co-owner of BBCetc, are the principal investigators.

The SHARPhub (sharpideahub.com) initiative launched in September 2018 and is currently in Phase I of the project, studying feasibility and working towards NIH milestones. They are setting up the infrastructure, establishing the relationships with universities across each region, and completing assessments of strengths and weaknesses of tech transfer organizations in each of the states.

Focus on culture change, education

Cultural change and education are major elements of the NIH mandate for the acceleration hubs, and SHARPhub is attacking those issues head on. “We have to build a pipeline,” says Wright. “One of our goals is to reach and educate at earlier stages, so that undergraduate and graduate students have an idea about the potential for entrepreneurship. If I’m a scientist, in addition to writing papers and getting grants, I should also be looking for potential opportunities to take that technology out of the laboratory and move it to my own start-up company or to work with a group that passes that technology on. So, there’s a huge educational component that still is lacking, particularly in (IDeA) regions.”

Wright’s early impression is that there are pockets of strength in each of the central region’s states, but that the entire pipeline is not there. “There are dead zones where people really struggle,” he said. His team is helping universities in the region by identifying management talent, identifying venture capital, and helping with customer discovery.

The program’s central component is an educational platform that is being delivered by BBCetc. (See Figure 1.) “During this first year, we’ve rolled out a fairly large curriculum that covers everything from ‘I have an idea, how do I find the tech transfer office?’ to ‘how do I submit?’ to ‘how do I manage my STTR grant or SBIR grant once I’ve received it?’ So, it runs the whole gamut. We’ll roll this out in Kansas this first eight months and then, if we get to Phase II, we’ll roll it out to the other five states, based on what’s the best fit for that particular state.”

SHARPhub has completed their fourth training module and are training a cohort of nine SHARPhub companies in Kansas. They are now working with the cohort on the items at the end of the training cycle, which includes one-on-one proposal assistance, identifying mentors, submitting micro grant applications, and preparing to do market research.

“We’ve been successful in getting all the way through the training cycle, and it’s exciting because we weren’t sure how many cohorts we would get,” Wright notes. “We have at least nine groups that are moving forward. It’s been exciting to ‘shake the tree’ a little bit and actually see what’s there and how can we help those groups. And they have been very excited to have that community.”

Pilot funding required

NIH requires each hub to provide pilot funding for their start-up companies. “That’s a huge challenge in terms of changing the culture of the university to sort of identify, if they have funds to support start-ups, what’s the framework in which they do that,” says Wright.

SHARPhub has developed pilot funding in the form of a microgrant program for its start-up companies. The program provides $5,000 that can be used for company start-up costs, legal fees for incorporation, or other early company expenses. It can also be used for equipment, for identity development, and for websites, logos, names, and other marketing materials. In addition, the companies can use the funds to develop preliminary data in support of their technology, fees for equipment or services, consultant or subcontractor costs, or statistical analysis. “We give that flexibility because each [company] that we’re working with is at different stages and they need different things,” Wright explains.

“As we roll this out in the other states, we’re going to have to go out and find those funds, which weren’t built into the grant from NIH,” he adds. “And that could be from economic development agencies or offices, or maybe their state government. Or if their university already has funds, we can help direct and get to the right people that need that sort of support early on.”

While it’s still in the early stages, the SHARPhub is tackling the major obstacles to SBIR/STTR funding and other barriers that entrepreneurs face in more rural areas — and could be a useful model for TTOs in flyover regions to consider. “A lot of SHARPhub’s Phase I is learning how to avoid the failures and to take the important steps early on,” says Wright. “We’re getting out into the streets to provide resources to the folks who may not be at the major institutions.”

Contact Wright at dwright@kumc.edu.


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