Please note, these FAQ’s serve as clarification and updates to the COE solicitation and are to be considered as part of the solicitation for 2008-09
Question: If we receive a contract that has a phased performance requirement (such as an SBIR with a required project timeline), but the lump sum of the payments arrives BEFORE the time frame for matching funds, can any of the funds be counted as a match to the COE grant?
Under a project with phased performance requirements, such as an SBIR with a required project timeline, (example, 6 or 12 months), if the funding is received in a lump sum at the beginning of the project, and if that date is BEFORE the matching funds eligibility date, a portion of the contract can be counted as matching funds, as long as it is approved in advance by the Director. To be counted as matching funds, the full contract amount is pro-rated over the duration of the contract, and the number of months which fall within the matching funds period (April '08 to Jun 30 '09) can be counted as matching funds for the COE grant. The Director may require any documentation to establish this, and this may include the SBIR proposal and contract, bank statements and reports to the SBIR program providing the SBIR contract.
UPDATE – concerning compensation for Significant Founders.
In short, this permits the maximum compensation for founders to be calculated based on the sum of the COE Grant plus the 1:1 matching funds. This is relevant for situations, such as an SBIR grant, where one of the founders is required to take at least a minimum from the matching funds. Changed text is in “blue” in the paragraphs below, which can be found on page 9 of the updated solicitation.
A Significant Founder is defined for the purposed of the COE grant program as any individual who received 10% or more of the founding shares of the company or who holds 10% or more of the shares of the company after the execution of the license with the university. An amount equal to not more than 25% of the sum of COE funding + 1:1 Required Matching funding, may be used for compensation for a significant founder who is wholly committed to the proposing Company (meaning that they do not have other regular employment of more than 49% time, just under 20 hours per week - similar to SBIR requirements). Significant Founders who are not wholly committed to the proposing Company (meaning that they DO have other regular employment of more than 49% time) may not receive any compensation from COE funding or Required Matching funds. Additional funding over and above this COE Funding + Required Match may be used for reasonable additional founder compensation.
If there are two significant founders, it may be permitted by the Council and/or the Director for as much as 50% of the sum of COE funding + 1:1Required Matchingfunding, to be used for significant founder compensation for TWO founders, as long as both are wholly committed to the proposing Company and generally only when there is a mix of skills between the two significant founders that is required for the success of the company (such as business skills in one significant founder and technical skills in another significant founder).
Question: If we are a new Licensee of a technology that has previously been supported by a college or university-based Center in the COE program, what is our limit for funding?
When a former Center at a college or university has a Licensee which is applying for the first time for a Licensee grant, the Licensee is eligible to apply for the amount of funds remaining under the cap. This is calculated by taking $500,000 (the cap for each technology) and subtracting all previous grants to the Center. If the Center, for example, had received $250,000 in previous grants, then the Licensee is eligible to apply for up to $250,000 to accelerate the commercialization of the technology.
UPDATE – Concerning Startup companies which want to contract back a portion of their COE grant to the university.
Please see the UPDATED Solicitation. This includes a change on page 8 of the document, concerning Startups which are choosing to contract back a portion of their COE grant to the university. This update clarifies that the company may request no more than 50% of the grant to be contracted back to the university. This update is consistent with the language applied to “Existing Businesses”.
Question: If we have questions for the Director, how should we contact her?
1) Please read ALL of the documentation for the new solication, including the detailed proposal TEMPLATE and including these FAQ's as many questions are answered in documentation.
2) If your specific question isn’t answered, please email the Director with the specific questions you have regarding your proposal.
3) The Director will respond by email to answer questions. If she is unable to answer your questions by email, then the Director will request a conference call with you.
The Director wants to ensure that everyone is treated fairly and consistently. With the large volume of potential applicants, the Director cannot respond individually to every call or voicemail due to time constraints. Please, EMAIL the Director for assistance after reading all of the online documentation.
Question: If we are a company which has received an initial Licensee Grant in 2007-08, where should we report on or progress for the 2007-08 fiscal year?
Answer: Please review your progress towards your 2007-08 objectives, progress made and any issues encountered, in the proposal section “4 Summary of Business Plan” Please create a new Section entitled “Progress Against Proposed Plan 2007-08” You can add it into the business plan at any point that makes sense, please just make sure it is clearly titled so that our reviewers can identify it.
Question: Is a non profit (or not-for profit) entity eligible to apply for a COE Licensee grant?
Answer: Not in General. A for-profit company whose only shareholder is a not-for-profit IS eligible to apply for COE grant funding, but the not-for-profit itself is NOT eligible. The reason for this is that the purpose of the COE Licensee Grant program is to foster and accelerate Economic Development in the State of Utah and with job creation as the specific mechanism. A for-profit entity is designed to take a technology and convert it into economic gain, which (generally) includes job creation. However a not-for-profit entity generally is supported by other sources of funding, which usually limits the growth of staffing, contrary to the interests of the State and the COE program in particular. Specific instances that are an exception to this can be registered with the Director after the close of this year’s solicitation (March 10th, 2008), and will then be considered in advance of next year’s solicitation.
Question I have a product that parts of it are being developed by technology and plastics school at a local university. Will that qualify?:
Answer: If the work that the university is doing requires a LICENSE because it is technology that has been developed using outside funding (usually Federal funding), then it is eligible.m Generally a license is a long term relationship that involves an equity or royalty provision.
If, however, you are paying them as a vendor doing "work for hire", and they have no long term ownership of what they've done for you, then it would not qualify.
Question: Will the Current University Centers which have received their first year of funding in 207-08, and which are eligible to apply for one additional year of funding, also have a $25,000 allocation for “business team support”? How should this be included in the proposal.
Answer: Yes, those Centers which are applying for second year support are eligible for business team support in the amount of $25,000. On the cover sheet, under the amount requested, the team should include two lines – the first is the amount request for their team inside the university, and the second should read “$25,000 for business team support.”
Question: How can university teams receive funding for advancing their technologies from the COE program after the new changes to the program?
There are two ways for university teams which have developed technologies with strong commercial potential to receive money through the COE program.
- The company (licensee) can include in their proposal to the COE program that they want to contract back to the University team for further development, along with the purpose and milestones of this work. Under this option, the COE program will write the contract directly with the university and no overhead will be charged to the company as Utah’s colleges and universities which participate in the COE program agree not to charge overhead to the program. This method will require that the university team have appropriate matching funds for their portion of the grant (2:1 matching for PhD granting schools, 1:1 matching at others) The company will NOT be required to having matching funds for the portion of the grant that goes directly to the university.
- Alternately – the company can apply for and receive the entire COE grant directly, and then contract back to the university team directly. Under these conditions, no matching funds are required at the university, but the company will be required to have a 1:1 match for their entire grant amount. When the licensee contracts back with the university, they will be required to pay any overhead that is required by the college or university, but NO COE funds NOR any of the 1:1 matching funds may be used to pay that overhead. However, the company may use other funds to pay appropriate overhead.
Question: How will the COE program, under these new guidelines, encourage Licensees to work closely with university inventors?
Answer: There are a number of ways that inventors and companies can build strong collaborative relationships. As described above, direct contracting back to the university team is an important mechanism that the program will enable. In addition, some companies and inventors may find other good collaborative methods including recruiting graduate students at the recommendation of professors, professor sabbaticals to support the technology transition, or long term research funding. Currently the program sees these types of relationships between inventor teams and Licensees and others will likely emerge as well.
Question: When will the COE 2008-09 RFP be available?
Answer: The RFP is expected shortly after the start of 2008 with a deadline expected in late February.
Question: If I am the Director of a current Center of Excellence which is currently receiving at least its second year of funding in 2007-08, am I eligible to apply for additional funding to the university team?
Answer: No, only Centers which were newly funded in 2007-08 are eligible for additional funding as a traditional “Center” through the university. Any Center which is in its second (or later) year of funding should be well on the path to developing a strong Licensee relationship and the Licensee should apply for funding for 2008-09.
Question: If we are a Licensee of a technology that was a former Center of Excellence in past years, are we eligible for a Licensee Grant under this new program? If so, how much can we apply for?
Answer: It will depend upon the amount of funding that was provided to the Center in previous years. The cap on funding is up to $500,000 per technology. If the former Center received a full $500,000, then the Licensee will not be eligible for funding. If the Center received less than the maximum, they will be eligible to apply for a grant for up to the difference. For example, if the Center at the university had received $350,000 over 3 years, then the Licensee would be eligible to apply for grants totaling $150,000. Of course it is important to remember that the program continues to be competitive and there is no guarantee of funding.
Question: Will there still be a “Centers of Excellence” designation for university teams?
Answer: We are still fine tuning this policy. However, there will be a mechanism for university teams whose technology is licensed and the Licensee receives a COE grant, to use the Center of Excellence designation. More details will be forthcoming.
Question: There were 8 teams for 2007-09 which received a “Business Team Grant”. Are these teams also eligible for funding as a University Center, or only as a Licensee for 2008-09?
Answer: Those teams which receive Business Team Grants this year are NOT eligible for Center funding through their University next year, but will be eligible for a Licensee Grant for 2008-09. Only the four (4) University Centers which received their first full year of funding in 07-08 are eligible to apply for a second year of funding. However, the Director expects 2008-09 to be a competitive year and university teams will be competing against licensees for funding, so all teams are encouraged to find an industry partner, either startup or existing company, with a seasoned, credible management team, to apply for a Licensee Grant.
When applying for a COE grant to support the commercialization of a specific technology, must the technology licensed from a university to be eligible for a grant, or is ownership (by the company) suitable?
Answer: The technology MUST be “newly licensed” from one of Utah’s colleges or universities. This program is not intended for technology developed solely by a company, nor for technologies that were previously licensed from a university and have already been taken to market. This program is intended to support the transition of technologies out of the university lab and into the marketplace.
Question: Will there be multiple solicitations during the year?
Answer: No. Because the COE selection process depends so much on our volunteer Advisory Council members, who are all senior executives from industry, we are currently planning only one solicitation each year. We are aware that this is not optimal for some licensees, but our volunteers devote significant time to this process and the quality of the decision process depends upon their expertise.
Question: When, following proposal submission date, will successful grant
applications be funded?
Answer: Funding is available at the beginning of the Fiscal year, July 1st. However, the contract process sometimes takes longer than anticipated, and funding cannot be disbursed until all contract signatures are obtained. This may be a 6-8 week process in some cases due to state purchasing and contracting requirements in order to ensure appropriate care for taxpayer funds.
Question: The program requires a 1:1 matching funds, what are appropriate sources of matching funds.
Answer: This is complex as it depends upon the maturity of the company. Details will be provided in the RFP, however, in general, funds can be industry or Federal funds that are coming directly to the company for the licensee grants. This can include sales, contracts, Federal grants/contracts, including SBIR/STTR, or equity infusions (investments, not loans).