In a significant win for Louisiana’s innovation ecosystem, the state legislature passed a trio of measures in 2022 aimed at supporting innovative small businesses with vital funds.
Collectively, the new laws establish three new funds for innovators and entrepreneurs to access as they grow their small businesses in Louisiana. The newly enacted funds will provide financial assistance to certain Louisiana businesses applying for and leveraging Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) federal research grants. SBIR funding represents a partnership between an SBIR-participating federal agency and a small business, while STTR grants are federal research grants set aside for small businesses working with a nonprofit research partner, typically with a university.
Small Business Innovation Fund
The Small Business Innovation Fund establishes a mechanism for the state to directly support entrepreneurs in completing and submitting competitive SBIR and STTR applications. This fund provides up to $150,000 to be distributed annually, from which:
- Up to $60,000 will be awarded in grant form to aid in the completion of Phase 1 SBIR or STTR grant applications. (up to $5,000 per applicant).
- Up to $60,000 will be awarded as grants for applicants aiming to complete Phase 2 of SBIR or STTR applications. (up to $10,000 per applicant.)
- $30,000 is allocated to the Louisiana Technology Transfer Office (LTTO) for their technical assistance, programs, and promotions.
Small Business Innovation Retention Fund
The Small Business Innovation Retention Fund equips the state to support Louisiana innovators as they leverage federal grants in growing their businesses. This fund provides up to $1,105,000 annually, from which:
- Up to $500,000 will be allocated for Phase I SBIR or STTR federal grant recipients.
- Grantees will receive an amount equal to 25% of the Phase I SBIR or STTR federal grants, up to $50,000 per applicant.
- Up to $500,000 for Phase II SBIR or STTR federal grant recipients.
- Grantees will receive an amount equal to 20% of Phase II SBIR or STTR grants, up to $100,000 per applicant.
- Up to $105,000 is allocated to Louisiana Economic Development for technical support and administration.
Each grant will be divided into two equal amounts and will be distributed to the selected applicant over a period of two consecutive years.
Small Business Innovation Recruitment Fund
The Small Business Innovation Recruitment Fund provides Louisiana with a new tool to effectively recruit out-of-state Phase 2 SBIR/STTR award recipients to locate their operations in Louisiana. In the form of grants from Louisiana Economic Development, eligible companies can receive up to $100,000 divided and distributed equally over three consecutive years. This fund provides up to $500,000 annually. . To qualify for this grant; applicants must meet the following criteria:
- Received Phase II SBIR or STTR grant funding within the two years immediately preceding application submission.
- Generated sales and revenue with documentation.
- Produced commercial products or conducted commercial services with documentation.
The Louisiana Legislative Fiscal Office anticipates support through these funds to be available as early as Summer 2023.
Benefits of SBIR and STTR Grants
The benefits of SBIR and STTR grants are that these types of funding are stable, predictable, and come in the form of grants, not loans. The capital is non-dilutive, and small businesses can retain intellectual property rights on their research and products they prototype. Additionally, they provide recognition, validation, and visibility to companies in their early stages and can help attract future funding.
This new law will allow Louisiana innovators to bring their ideas to life and further bioinnovation. The New Orleans BioInnovation Center supports entrepreneurship and is dedicated to developing bioscience throughout the state. We are proud to work with entrepreneurs and researchers to commercialize new technologies and have seen 60+ SBIR/STTR applications supported by commercialization staff.
“The NIH’s SBIR/STTR Program is pivotal for young biotech,” South Rampart Pharma CEO and Co-Founder Hernan Bazan said. “Besides providing non-dilutive funding, it offers access to unique industry reports and business development expertise. And tax incentives can be used for further R&D capital.”
For anyone interested in applying for SBIR or STTR grants or seeking access to customized commercialization services, premier facilities, and a comprehensive support network, contact us today.
“The SBIR program is important because, in high-tech, high-payoff technology plays, it gives entrepreneurs the initial funding to do the actual proof-of-principal for their products and accelerate their development,” Chosen Diagnostics CEO Sunyoung Kim said. “Being a woman-owned and women-led startup, it is wonderful to see the state invest in high-tech R&D businesses [and it] increases the likelihood that Louisiana-based companies will be able to successfully develop products and services in our backyard. Real efforts to retain our best and brightest, as well as to encourage talent outside our state to come here, is an exciting step forward.”
How NOBIC Can Help
NOBIC works to accelerate the growth of Louisiana’s biotech ecosystem, supporting innovators and companies as Louisiana becomes a leader in biotech innovation and commercialization. In order to achieve this goal, we’ve partnered with various businesses that align with our values of empowering entrepreneurs, connecting innovators with a broad network, and promoting opportunities for underrepresented groups. Some of our partners include state and federal government agencies, including Louisiana Economic Development (LED), the U.S. Department of Commerce, Biomedical Advanced Research and Development Authority (BARDA), the U.S. Small Business Administration, and the Delta Regional Authority. We also proudly partner with Tulane University, LSU Health New Orleans, Xavier University of Louisiana, and The University of New Orleans.
NOBIC also offers the New Orleans BioFund to support small businesses in the region that are looking to grow, create jobs, and contribute to New Orleans’s revitalization but may not qualify for traditional financing.
To learn more about NOBIC, our values, past startups we’ve worked with, our facilities, and more, visit our website at neworleansbio.com.