Some phenomenal questions and feedback filtered out from last week’s Open Topic Proposal Tips. Most of them surrounded the money. So, let’s talk about matching funds. 

If you watched our webinar, Hot Tips for a successful TACFI/STRATFI, you heard me talk about the importance of likelihood of transition in the evaluation process. For those that didn’t watch, I’ll recap. 

The success of SBIR/STTR programs is measured by a number of metrics. The three that I’ll argue are most dominant are (1) Transition Rate, (2) Mission Impact, and (3) Economic Impact.  I’ll make the case that your likelihood of transition actually affects all three of these, and is the number one thing evaluators have on their minds when evaluating, whether they are conscientious about it or not.

As with any industry, money talks. While having solid signatories is a step in the right direction, when an organization is willing to invest their own funding into your technology, it sends a much louder message. On the commercial side, this may include letters of intent from potential customers. On the federal side, it comes in the form of matching funds. 

Federal funding can come in two forms. This first is a promise of follow-on funding. Anyone with an understanding of federal funding processes knows these types of promises can’t be guaranteed. Promises of follow-on funding are much stronger if they come with a prioritization action. A promise to prioritize your technology sells a great story, whether it’s in the form of POM inputs at the highest level, requirements modifications, or on a lower level priority list tied to funding that a signatory or stakeholder has authority over.

Even better, can they put money on it, NOW? This indicates an organization has a high level of interest and willingness to take the risk of development.

The TACFI and STRATFI programs were designed to support transition of commercial technology into operational use for the Air Force or Department of Defense. The objective is to move high impact solutions forward while priorities and dedicated funding can concurrently be aligned. The ideal “win” is to pull from technologies that are going to thrive in the commercial market, anyway, which is where the push for commercial funds matching comes in. The hope of the TACFI/STRATFI program is that this helps drive the overmatched commercial R&D spending towards national security. It also serves to further buy down the Air Force’s investment risk. 

So in this case, your ideal argument will include both promises of follow-on activity to catch the solution on the other side of the TACFI or STRATFI, and matched federal funding. If you’re leveraging TACFI exclusively with commercial 3rd party matching, I’d recommend ensuring your government partners have made some promises for phase III execution, such as product procurement or licensing. The more clarity they can put on the funds they have identified for this purpose, the better. 

This whole process can be frustrating for many reasons. From a funding perspective, the team you have traction with may not have spare funding available, which is, perhaps, a shortcoming of the program. Having a customer with discretionary or fallout funding gives you a leg up. If an organization can’t access these funds, and you need to identify and justify funding from elsewhere, it can be an expensive undertaking for your team. 

You can take action to make your odds of funding alignment and matching much higher. 

Write it 

This pertains to the promises of future funding, though it may influence action towards matching funds alignment. Odds are, you’re writing the Customer Memorandum. Make sure your draft details the prioritization processes and funding identification appropriate for your successful transition. Your government customer will review and can revise as they see fit, but there’s a good chance the argument will remain in place. I recommend pushing a strong customer memo forward for your Phase II proposals - it may be the catalyst that triggers the right actions from your stakeholders to set you up for that TACFI or STRATFI follow-on.

Help them help you

Your government customer is likely working with you as an additional duty or on their own time. Even if you have the best and most passionate advocate, there’s a good chance they’re burning nights and weekends to get your tech funded and fielded. If they’re less enthusiastic and just  not doing the work, this equally applies. Help them help you.  

What does that mean? Build them products and tools they can use to sell the argument upstream. When reasonable, send them powerpoint format products they can reuse. Provide them with technical documentation and data. ASK your customer what would be helpful in making that argument. The more you can give them, the stronger the argument they can make! 

Identify funding opportunities 

There are numerous funding opportunities out there to support innovation and research programs across the DOD. Keep your ears to the ground or do some digging, and prepare your customer for these. Just because it’s a government program doesn’t mean your government customer knows about it. 

Bring the Federal Funding 

Congressional inserts/adds. This can be a timely and expensive process, but it can be done with high payoff. Whether you hire a lobbyist, or you have your own relationships with congressional, pushing year-of funding to your customers program element via congressional inserts can be a way to win. 

Getting congressional inserts can be  a delicate game to play. Inserts cannot exclusively point to a particular company, and the government entity who receives them does have some discretion. It’s also a delicate conversation to have, as government employees are not allowed to influence congressional insert decisions and are meant to be left out of these conversations - often they won’t want to talk about it until the money has been appropriated. That means you’ll want to make sure you have strong relationships in place before you expend resources to align funding this way. 

Align the right Stakeholders

Align your stakeholders. Find the right stakeholders. Engage them early, and support them in as many ways as you can with the tips above. Everything you do to align funding requires you to be working with the right team. Connecting to them and connecting them to each other early increases your odds of success. It’s by working together and aligning timelines and resources that they can truly advocate for transition. It’s a rare case that a technology will make it to procurement with only one close customer relationship in the stakeholder chain.

If you’re not sure who your stakeholders are, join Auxo’s Stakeholder Identification Workshop, Friday, 31 May 2024 9-11PST/12-2EST.  Sign-up details, coming soon! 

Any specific questions on this topic, or any other topics you’d like us to cover? Please share in the comments! 

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