For nine years, Alabama Launchpad has worked diligently to support innovative entrepreneurs and to help Alabama companies with the potential for high growth to start, stay and grow in the state.
While known for providing startup capital in its Alabama Launchpad Startup Competition, the non-profit organization added another program, the Alabama SBIR/STTR (Small Business Innovative Research/Small Business Technology Transfer) Assistance Program in 2014. That program’s goal is to assist Alabama small businesses statewide receive a share of $2 billion in grant funding awarded annually by federal agencies to transform high-technology ideas into commercial products and ultimately create jobs.
“We are excited to report an important milestone in our Phase 0 program, which assists SBIR applicants to strengthen their proposals,” said Greg Sheek, Alabama Launchpad programs director.
Alabama Launchpad awarded $5,000 for accounting compliance purposes to Archangel Systems Inc., a woman-owned, small business in Auburn started in 1992 that specializes in the development and sale of inertial systems for the military and aerospace industry.
Sheek said the Phase 0 Accounting Compliance Award to Archangel Systems is significant because it reinforces that Alabama Launchpad is helping Alabama companies access America’s largest seed fund, which is the SBIR program.
The Phase 0 award helps position Archangel for a greater chance of winning a Phase II award from the SBIR program, which is a significantly larger amount and means more stable funding, Sheek said.
Dr. Kitty Greene, Archangel’s president, said the company sells aerospace products but also is heavily involved in research and development. The company has been awarded 15 SBIR/STTR awards during the last 13 years, with two of the company’s current products initially developed during Phase I SBIR contracts.
As a SBIR winner, a company is required to be familiar with the content of thousands of pages of Defense Acquisition Regulation Supplement (DFARS) rules. If a time and materials or cost-plus contract is awarded, a winner will be audited by the Defense Contractor Audit Agency (DCAA), sometimes many years down the road, according to Greene.
That was the case for Archangel. The company had five audits in 2014 for its Incurred Cost Proposals and spent money for accounting assistance, which can be costly for a small business.
Archangel has 22 employees and was founded by Greene’s husband, Dr. Michael Greene, a private pilot, retired electrical engineering professor at Auburn University and chairman of the board. Archangel’s clients include Boeing, Lockheed Martin, Erickson Air-Crane and the Australian Defence Force. Among its most popular products is an Air Data Attitude Heading Reference System, she said.
Greene said as the winner of the first Phase 0 award, Archangel worked with Redstone Government Consulting. Redstone reviewed Archangel’s accounting system and provided the company an Accounting Adequacy Letter, which Archangel used recently in a large proposal.
She said Redstone reviewed the company’s chart of accounts, assisted in establishing provisional rates for 2015 and reviewed its current accounting policies and procedures.
Funding can be a big hurdle to commercialization for small companies. SBIR/STTR-funded projects are typically so early stage that entrepreneurs have a difficult time attracting private investment.
SBIR/STTR funding is non-dilutive, so entrepreneurs can prove their concept or do more research, testing and product development while preserving the firm’s ability to attract other funding.
But SBIR contracts are very competitive and the turnaround time to respond is short, while the submittal process is complex and differs across the various governmental agencies.
Greene knows this firsthand.
“While a company may have a good idea, it is extremely difficult to turn it into an award,” Greene said.
“Having this financial assistance from Alabama Launchpad will hopefully make Archangel more competitive in winning future SBIR/STTR awards,” Greene said.
Alabama Launchpad encourages Alabama-based, early stage technology companies and SBIR/STTR winners to apply for Phase 0 funding.
“We want to help small businesses grow and succeed,” Sheek said. “This funding is available to do just that. The implementation of this program is to turn research and development into new, cutting-edge jobs for economic development in Alabama.”
For more information on the Phase 0 program, please click here.