Michigan Emerging Technologies Fund
Program Guidelines
Modified: April 2013
(Download PDF version of Guidelines here.)
The Michigan Small Business and Technology Development Center (MI-SBTDC) in partnership with the Michigan Economic Development Corporation (MEDC) has formed the Michigan Emerging Technologies Fund (ETF). The MI-SBTDC administers the ETF through a contractual agreement with the MEDC authorized by the Michigan Strategic Fund (MSF) Board. Funding for the program is provided through the Michigan 21st Century Jobs Fund. Since 2008, $7.28 million has been allocated to the Emerging Technologies Fund. ETF Funds will be awarded on a first come first serve basis.
A. Program Summary
The ETF was created to provide matching dollars to support commercialization of SBIR/STTR projects. The ETF will match 25% of phase I SBIR/STTR awards up to $25,000, and 25% of phase II SBIR/STTR awards up to $125,000. ETF awards will come in the form of grants and do not need to be paid back; however, ETF Funds must be used to help bring Michigan SBIR/STTR projects to commercialization in at least one of the Four Technology Sectors supported by the ETF. These sectors are:
- Advanced Automotive, Manufacturing, Materials, Information, and Agricultural Processing;
- Alternative Energy;
- Homeland Security and Defense; and
- Life Sciences
A Company must submit its ETF application prior to submitting its SBIR/STTR proposal to the federal government. ETF submissions received after the SBIR/STTR submission deadline will not be accepted. Companies must leverage Third Party Funding (Refer to Sections B and E) to be eligible for ETF Funds.
An ETF Award Recipient must be a Michigan company or have its principal place of business in Michigan. Applications will be accepted from companies located outside of Michigan, but a company must establish Michigan as its principal place of business prior to the disbursement of ETF funds.
B. Program Definitions
Applicant or Company: A technology-based small business concern submitting an application to the ETF.
ETF Funds: Funds awarded under the ETF.
SBIR/STTR Contract Date: The date any contract, grant, or cooperative agreement entered into between any federal agency and any small business concern for the performance of experimental, developmental, or research work funded in whole or in part by the federal Government.
Third Party Funding: A source of funding other than internal funds, federal funds, ETF funds or other State of Michigan funds. (Refer also to Section E)
ETF Award Recipient: A Company that has met all program criteria and is awarded matching funds from the ETF.
ETF Commitment Letter: A letter from the MI-SBTDC that commits ETF funds as match to an SBIR/STTR proposal.
C. ETF Eligibility Requirements
The Company must meet all federal SBIR/STTR requirements;
The Company must be a Michigan company or have its principal place of business in Michigan prior to the disbursement of funds;
The Company must submit SBIR/STTR proposals in at least one of the Four Competitive Sectors;
The Company must complete an ETF application prior to submitting an SBIR/STTR proposal.
The Company must submit an ETF application for each SBIR/STTR proposal. Filing an ETF application for a Phase I proposal will not cover a subsequent Phase II. A separate ETF application must be submitted for the Phase II proposal;
To receive an ETF Commitment Letter, the Company must request the Letter no later than 10 business days before the federal submission deadline;
The Company may not have more than two (2) SBIR/STTR Phase II federal grants within the previous five years. A Company may receive no more than two (2) ETF awards per twelve month period. Upon receipt of a second ETF award, all applications previously submitted to the ETF are void. The Company may begin filing new applications to the ETF; however, the company will not be eligible to receive ETF Funds until12 months after receipt of the second ETF award.
A Company may receive no more than six (6) ETF awards throughout its participation in the ETF program as follows: no more than two (2) ETF awards covering Phase II awards and no more than four (4) ETF awards covering Phase I awards.
ETF awards will only match the base Phase I and Phase II programs for each agency. SBIR/STTR supplemental programs including, but not limited to, Phase I Option, Phase II enhancement, Phase II PLUS, Commercialization Pilot Program (CPP), Technical Assistance Programs (TAP), Commercialization Assistance Program (CAP), Niche Assessment Program (NAP), Manufacturing Assistance Program (MAP), Cost Match Feature, and Phases IB, IIA, IIB, IIR, REU/RET/RAHSS, and IICC are not eligible for ETF Funds.
D. ETF Matching Awards
- If the SBIR/STTR award has been used to meet matching requirements of another program funded by the MEDC or the Michigan 21st Century Jobs Fund, only the non-committed amount of the SBIR/STTR award will be considered for an ETF award. Example: If $250,000 of a $500,000 phase II SBIR award is used to meet matching requirements for the Michigan Pre Seed Fund, only the $250,000 balance will be considered for an ETF award.
- The maximum matching grant for SBIR/STTR Phase I Applicant is 25% of the SBIR/STTR federal award with a maximum amount of $25,000. Third party match is required.
- The maximum matching grant for SBIR/STTR Phase II Applicant is 25% of the SBIR/STTR federal award with a maximum amount of $125,000. Third party match is required.
- The ETF matching awards for SBIR/STTR Phase II recipients will be distributed as follows:
- A first payment of up to $40,000 will be disbursed to the Company if it raises at least $5,000 in Third Party Funding; and
- A second payment will be disbursed such that the total ETF award amounts to the total third party match raised by the Company up to 25% of the federal award or $125,000, whichever is less. If the Company is unable raise additional Third Party Funding within twelve (12) months of the SBIR/STTR Contract Date with the federal agency, it will not be obligated to return the initial up to $40,000 disbursement. The Company must raise Third Party Funding within this time period to receive a second ETF payment.
E. Third Party Funding
ETF Funds must leverage Third Party Funding within twelve (12) months of the SBIR/STTR Contract Date with the federal agency. Third Party Funding cannot be cash from an officer or employee of the Company or from Company internal funds. Third Party Funding may be a loan from a bank, another company, or friend, although the lender may not be an officer, employee, or have a financial interest in the Company. The loan must not be collateralized by either the federal grant or ETF Funds. Furthermore, the loan cannot be repaid by proceeds from the federal grant or ETF Funds.
Third Party Funding may come from a family member with the exception of a spouse or any other individual who is listed on the tax return of any officer of the Company.
In addition to the ETF award, Third Party Funding must be used for commercialization of the technology sponsored under the SBIR/STTR grant. All Phase II ETF Award Recipients must acknowledge and may be asked to substantiate that their Third Party Funding (loan, available line of credit, receipt of investment) will be used to commercialize the sponsored technology.
F. ETF Application and Award Process
Companies interested in submitting an application to the ETF, must submit an electronic application through the Michigan Emerging Technologies Fund web site at www.mietf.org. A summary of the application and award process is as follows:
The Company must complete an ETF application prior to submitting an SBIR/STTR proposal.
To receive an ETF Commitment Letter, the Company must request the Letter no later than 10 business days before the federal submission deadline.
The MI-SBTDC will review the application to determine eligibility. A Company that meets the eligibility requirements and submits a complete application will receive an ETF Commitment Letter from the MI-SBTDC within five (5) business days of the ETF application.
Upon receiving a Commitment Letter from the MI-SBTDC, the Company may include the Letter in its SBIR/STTR proposal to the appropriate federal agency.
ETF submissions received after the federal SBIR/STTR submission deadline will not be accepted.
If a Company is successful in receiving an SBIR/STTR award, it must submit the following documents to the MI-SBTDC:
Proof in the form of an executed SBIR/STTR contract, grant, or cooperative agreement between the federal agency and the Company;
Proof of commitment/receipt of Third Party Funding. (Copy of closing documents, letter of commitment from third party, etc.); and
A one-page summary on the use of ETF Funds towards commercialization efforts.
Upon receiving the required documents from the Company, the MI-SBTDC will send an Emerging Technology Fund Award Agreement to the Company. Upon receipt of a signed Agreement, the MI-SBTDC will disburse the applicable amount of ETF Funds to the Company.
G. Use of ETF Funds
ETF Funds may only be used for commercialization purposes. Expenses used for commercialization purposes include, but are not limited to, purchase of equipment, legal costs (intellectual property protection, employee agreements, licensing agreements, etc.), sales and marketing costs (reasonable travel, trade shows, advertising, market studies, etc.), business planning costs, human resource development costs, and fundraising costs. For an STTR federal award, ETF Funds will only be provided to the Company and may not be shared with the research institute under any circumstances.
H. ETF Reporting Requirements
On an annual basis for five (5) years following the receipt of the ETF award, ETF Award Recipients will be required to provide the MI-SBTDC with a short summary report describing specific results of the work funded, documenting expenditures made with the matching award, and forecasting the next steps of the project. The report will include revenue, the number of jobs created, the number of patents submitted, and the number of patents issued resulting from the project. ETF Award Recipients are expected to accommodate reasonable requests by the MI-SBTDC staff for site visits. ETF Award Recipients must file timely reports to remain eligible to participate in the ETF program.
I. Multiple ETF Submissions
A Company is encouraged to re-apply to the ETF in the event it is not initially successful in receiving an SBIR/STTR award. If a federal agency permits resubmission of an SBIR/STTR proposal, a Company may utilize its original ETF application for that resubmission.
A Company must draw down all outstanding ETF Funds and “close-out” all ETF account(s) with the MI-SBTDC prior to receiving additional ETF awards. For example, a Company must draw down its second payment for a Phase II application prior to receiving future ETF awards.
J. Frequently Asked Questions
A Frequently Asked Questions (FAQ) section will be maintained and made available to ETF applicants and awardees to clarify issues within the Program Guidelines and/or address issues that were not anticipated prior to the release of the Program Guidelines. The FAQ should be considered an extension of the Program Guidelines and will be adhered to and enforced as such.
K. Continued Funding and Availability of Funds
All ETF awards are subject to continued funding of the ETF program and availability of funds. Final determination as to eligibility will be at the discretion of the MI-SBTDC. Requests will be processed on a first come first serve basis. Maximum amounts are considered up-to amounts and may be adjusted at the discretion of the MI-SBTDC. The MI-SBTDC and MEDC at their sole discretion shall have the right to alter or amend these guidelines.