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 unding
business expansion in a post-Dot Com world isn't
the easiest thing to do. Venture capital firms are
cautious, as are individual investors. Credit is
tight. So, where does a small business turn?
"Federal
government grants" is probably not the first answer
that comes to mind. But, that's just how my electronic
media firm, Take Aim Media Inc., was able finance
R&D on our children's health video series for preschoolers.
Here's how.
Adapting
the Business Plan
Located
just outside the nation's capital, Take Aim has
been well positioned to create our main product:
customized educational, marketing and advocacy videos
for government agencies, associations and nonprofits.
But,
by the mid-1990s, our industry landscape had changed
dramatically, in part due to advances in digital
computer and camera technology that let individual
operators and even our own clients compete with
us. That's when we decided to adapt the business
plan from a "work for hire" model to one including
intellectual property.
Our
strategy was to leverage the company's expertise
in non-fiction production to develop content for
license to broadcast, cable, home video, and educational
markets. In addition to adding to production revenues,
licensing would bring an all-important "back end"
to our revenue stream.
It
was a tall order for a three-employee firm with
just a half million dollars in revenues. But, we
soon launched a joint venture to develop a children's
pro-health video series to "edutain" five- to seven-year-olds.
The show, "Dynamotion: Kids Gotta MoveŽ" was based
upon areas in which we had strong expertise: entertaining,
educational content; lively, original music; and
animated and live-action characters.
Using
revenue from our work-for-hire business, we put
significant capital into researching the concept
and producing and testing pilot segments with the
market. After two years of work with our partners
in Dynamotion Enterprises LLC, we knew we had a
winner. But, we didn't have enough capital to fully
develop the product, and we hadn't been able to
garner investors, who at the time were focused on
those now infamous Internet ventures.
The
Federal SBIR Program
That's
when we turned to the federal Small Business Innovation
Research program (SBIR).
The
SBIR is currently available through 10 federal agencies
(see sidebar) and is a set-aside program that supports
domestic small business concerns that engage in
research/research and development (R/R&D) that has
the potential for commercialization. It is one of
very few grants available to for-profit enterprises.
There
are two phases of an SBIR: Phase I, which generally
lasts for six months and up to $100,000, is a "proof
of concept" phase to test your idea and prove your
company's quality of performance. In Phase II, the
small business continues R&D work to fully evaluate
commercialization potential.
Only
Phase I award winners are considered for Phase II.
Phase II support is normally provided for two years
and up to $750,000. You must have a strong Phase
III commercialization plan in order to win the first
two grants. But, you're on your own for the final
phase.
Of
course, with a strong concept and research to back
it up, you should have a better chance in the marketplace.
You can even patent your end product, if it is an
invention. (There are guidelines that I won't get
into here.)
But,
Uncle Sam does ask for a few things in return: Grantees
are expected to be audited; you must make the results
and accomplishments of your activities available
to the research community and to the public at large;
and you must make any copyrightable material available
for federal use royalty-free.
The
Application Process
SBIR applications are peer-reviewed based upon
a number of criteria, including: significance; approach;
milestones and proof of principle; innovation (remember
the name?); investigator (that's the principal investigator,
or project leader); and environment (i.e., resources
and facilities).
Consideration
also is given to the adequacy of protections (during
testing) for humans, animals and/or the environment,
as well as the inclusion of both genders and all
racial and ethnic groups. Of course, the all-important
budget must be well justified - it's our
taxpayer money, after all.
Once
Take Aim identified that the SBIR program was appropriate
for our product idea, we needed to determine which
federal agency to pursue.
The
key to successful grant writing is making sure your
project fits within that institution's overall mission
and current program priorities. With a key part
of its mission to "advance significantly the nation's
capacity to protect and improve health," we felt
the National Institutes of Health (NIH) was a good
fit.
Plus,
our topic was timely. At the height of media attention
on growing obesity and poor nutrition in children,
our show was designed to make children more aware
of their bodies, more inclined to be physically
active (both while watching the show and afterwards),
and more likely to make good fitness and nutrition
choices.
Writing
the Application
But, finding the right grant-making agency was
only half our battle. Next came the application.
As
part of our business plan, we developed relationships
with other companies that had won grants. This helped
us get to know the process and the administrative
issues. Since we are professional writers, we chose
to write the application ourselves. But, we knew
that grantwriters can be helpful, particularly if
they have special expertise in the type of grant
or the grant-making institution.
So,
for this invaluable input, we turned to a colleague
with experience in educational research and media
for children. He understood the application from
the perspective of its readers. This is critical
and often the main obstacle to unsuccessful proposals
- whether for grants or contracts. Applicants
often write from the perspective of what they know,
rather than what the reviewer already knows and
needs to know about your subject. Writing clearly,
concisely, and without jargon is a must.
Thankfully,
the federal government has been an early adopter
of the Internet. All agencies post extensive information
to guide you through the application process. There
are also annual SBIR conferences at which you can
meet program officers, administrators, and other
grantees. These are invaluable face-to-face events.
Results
for Business and Government
Two years ago, Take Aim won its first Phase
I SBIR grant from the NIH Heart, Lung and Blood
Institute, part of the U.S. Department of Health
and Human Services.
Under
the grant, we completed a short pilot video and
tested its effects on the pro-health knowledge and
attitudes of more than 200 elementary-aged children.
The research results, published this October in
the Journal of Community and Family Health, showed
some noteworthy results.
We
recently were awarded a Phase II grant for this
project, which will help us produce additional videos
and test them with a larger population of more than
900 children. In the meantime, we have had significant
interest in the product from broadcasters and international
distributors, which has always been our ultimate
goal for commercialization.
Since
first launching our funding plan, Take Aim has grown
in size and our ability to deliver a wider range
of content to our customers.
While
I've gained a few gray hairs learning the administrative
rules of federal grant funding, I am eternally grateful
to Uncle Sam for helping us develop a series that
we think will do for children's understanding of
health what "Sesame Street" did for their understanding
of letters and numbers.
Resources
to Check Out
AMY
DeLOUISE is founder and CEO of Take Aim Media Inc.
(www.takeaimedia.com) in Silver Spring, MD. She
can be contacted at 301-588-1500 (e-mail: info@takeaimedia.com).
More information about Dynamotion can be found at
www.dynamotion.com.
(This
article is reprinted from the Fall 2003 edition
of Enterprising Women magazine. Copyright
2003, Enterprising Women Inc. Reproduction in whole
or part is prohibited, except by permission of the
publisher.)
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