SBIR: startup funding and sustained growth

1
SBIR start-up funding and sustained growth

• A case study for
• No Money Down Raising Capital From
  Unconventional Sources

2
Early Stage Funding

• No business plan, no VC funding
• Credit card increased limits
• SBIR Phase I contract 50K
• SBIR Phase II contract 437K
• Home office
• University as development partner
• Founders equity with minimum cash

3
SBIR funds initial development

• Prove feasibility of innovation in Phase I
• Fund prototype development in Phase II
• Phase III requires non-SBIR funding
• Government programs
• Private equity
• Industrial partnerships

4
Converting Liabilities to Profit

• We had no marketing or sales resources
• Engineers lacked marketing experience
• No independent quality assurance program
• Large company missed a product opportunity
• ? ? There was a match, so a deal was made
• Prepaid royalty in exchange for 3-year exclusive
• 30 royalty for our part of OEM sales
• We retained rights to design translator products
• Renewed OEM contract without exclusive clause

5
Parlayed SBIR Opportunities

• Low power challenge exceeded scope of single
  agency SBIR Phase I and II awards
• 3 agencies awarded 4 SBIR contracts
• Needed capital to complete development
• Did not match VC investment guidelines
• Banks increased credit lines in stages
• Applied power synthesis concepts to radiation
  hardening architecture for more SBIR awards

6
Crossroads To Opportunity

• Sell technology rights
• Test insertion
• ALF library compiler
• Organize by product
• Design Translation
• Radiation hardening by design
• Block level library characterization
• Form new company for Low Power