When biotechnology entrepreneur Dr. Jason Shih made the unexpected discovery in 2001 that a bacterial enzyme he discovered could improve the nutritional value of chicken feed, he had an inkling that this observation might someday have commercial value for the multi-billion-dollar poultry industry. Thus, Dr. Shih, NCSU professor and co-founder of Raleigh-based biotechnology company BioResource International, Inc. (BRI), decided to apply for an SBIR Phase I grant from the US Department of Agriculture to study the feasibility of using this enzyme (commercial name Versazyme™) as a nutritional supplement for poultry (think "chicken vitamins").

In 2002, BRI was awarded a Phase I grant in the amount of $71,200 to study the nutritional applications of Versazyme™ in poultry diets.  This grant enabled BRI to hire a full-time poultry nutritionist and conduct feeding trials with the Versazyme™ product in collaboration with NCSU.  Lessons learned in Phase I: focus the Phase I study on a straightforward feasibility study with measurable endpoints consistent with industry standards.  Also, read the proposal instructions carefully(!) and obtain sample grant proposals from others to ensure appropriate formatting and content.

With a staff of five scientists based on the Centennial Campus of NC State University, three-year-old BRI is climbing the steps of technology commercialization. Last year, with SBIR Phase I grant in hand, BRI was able to secure seed funding from private investors and begin discussions with various potential partners and end-users.  Lesson learned post-award: while technology companies cannot rely solely on SBIR grant funding to subsist, SBIR grants do lend credibility and can be leveraged into other funding opportunities.

Encouraged by the positive results gained from the feeding trials conducted last year with Phase I funds, the BRI research team decided to apply for a follow-on USDA Phase II SBIR application in February of this year.  Lessons learned in Phase II: talk with potential end-users in your target market and, if possible, obtain letters of support from them. While a detailed commercial plan is not required in most Phase II proposals, agencies are focusing more and more on how you plan to commercialize your product or technology in Phase II.  Also, it is helpful to meet face-to-face with SBIR Program Directors in the various agencies, who for the most part, are very approachable and helpful. Don't forget the resources available at your local SBTDC office!

In some respects, building an entrepreneurial business is like driving a car, and cash is your fuel.  As entrepreneurs, our job is to drive that car in the quickest and most efficient way to the next gas station.  In this current economic climate where gas stations are far apart and "fuel" is expensive (i.e., companies getting crammed down on valuations), the SBIR grant program remains a viable option for entrepreneurs to fill their tanks and extend their drive for more fuel.  Good Luck and Happy Motoring!