B. Commercialization Plan (Cannot exceed 15 pages, EXCLUDING letters of support.) The Commercialization Plan is a critical section of the proposal.  It is the primary opportunity to describe the strategy that your organization will employ to generate revenue from the proposed innovation research.  The plan must concisely convey the business opportunity enabled by the innovation, clearly articulate a compelling value proposition for your intended customer and should cover the key points of a plan appropriate for your company’s stage of development.  The Commercialization Plan should convey the status of the effort to date and map out a strategy for your enterprise moving forward.  It should describe the current as well as the anticipated landscape and the resources required to address the opportunity enabled by your innovation.  Finally, the Commercialization Plan should convey your vision for the enterprise and how the proposed innovation fits into the future market.  The outline below describes the points that should be covered in a well-developed commercialization plan. 

There are four sections required for an NSF Commercialization Plan: Market Opportunity, Company/Team, Product/Technology and Competition, Finance and Revenue Model.  Each section should be developed with careful analysis of your company’s position within the industry and the market opportunity that is enabled by the proposed innovation.  The key points required for each section are also shown below.  Note, this outline represents a standard NSF Commercialization Plan.  Your particular strategy may include additional components that are not represented below; please include these elements as appropriate.

The National Science Foundation recognizes that each innovation requires a varied strategy to generate returns on invested capital and that no two businesses are exactly alike.  Therefore, NSF supports a broad array of commercialization strategies.  Each strategy requires varied emphasis on the parts of the plan depending on your innovation and the market landscape.  For instance, the strategy and mechanisms for leveraging and protecting IP vary according to industry and innovation. 

The Commercialization Plan is your roadmap for the future and should convey how you plan to generate profits from your innovation.  It should represent a compelling vision that describes a unique business opportunity that could be addressed with continued support from Phase II funding.  The depth and quality of the analysis within the Commercialization Plan is a critical element of the NSF SBIR/STTR proposal review.  Assumptions within the plan should be clearly stated and evidence of validation should be provided. 

1.       Market Opportunity. 

a.       Describe succinctly what product or service you are planning to deliver based on your innovation.

b.       What customer needs will be addressed with your product or service.

c.       Describe who your target customer is, providing generally-known examples may be helpful. 

d.       How does the target customer currently meet that need that you are addressing or convincingly describe how there is a significant problem that is not yet being addressed?

e.       What is the business model you plan to adopt to generate revenue from your innovation?

f.         How do you plan to “exit” the investment?

g.       Is the target market domestic, international or both?

h.       Describe the channels you would employ to reach the targeted customer? 

i.         What is the current size of the broad market you plan to enter and the “niche” market opportunity you are addressing? 

j.         What are the growth trends for the market and the key trends in the industry that you are planning to target? 

k.       What are the barriers to enter this market? 

l.         Describe the technology/development objectives and critical milestones that must be met to address the market opportunity. 

m.     If there are potential societal, educational or scientific benefits beyond commercial considerations they should be included here and explained in sufficient detail to convey the significance of the effort.


2.       Company/Team.

a.       Provide a short description of the origins of the company. 

b.       What type of corporate structure is in place?

c.       What is the current capitalization?  

d.       What is the current employee count? 

e.       What is the revenue history for the past three years?

f.         What are the sources of operating capital or revenue: product sales, consulting/services, license revenues, R&D grants/contracts and others? 

g.       Give a brief description of the experience and credentials of the personnel responsible for taking the innovation to market. 

h.       What specific experience does the team lack and how will this be addressed during the Phase II effort and beyond? 

i.         How does the background and experience of the team enhance the credibility of the commercialization plan; have they previously taken similar products/services to market?

j.         From what additional resources do you have commitment e.g., Board of Directors, Board of Advisors, Technical Advisors, Legal Counsel; provide details on names, affiliations and expertise of these resources? 


3.       Product/Technology and Competition. 

a.       What are the critical needs (“pain points”) that your product or service is fulfilling for your customer? 

b.       What features of your technology will allow you to provide a compelling value proposition?  How have you validated the significance of these features? 

c.       What is your customer willing to pay for your product or service?  How have you validated this assumption?

d.       What are your costs to produce the product or service? What are the assumptions that underlie your cost model(s)? 

e.       How does your technology/innovation allow your team to compete and win in the marketplace? 

f.         How does your product or service match up to that of the competition?

g.       What do you anticipate the competitive landscape to look like when you get to market? 

h.       Describe the intellectual property landscape. 

i.         Do you have “freedom to operate?”

j.         How do you plan to protect the intellectual property associated with your technology? 

k.       What other sources of intellectual property will you need to access in order to address the market opportunity described above? 


4.       Finance and Revenue Model. 

a.       Describe an appropriate staged finance plan given the market opportunity described above; enumerate the level of funding required for each stage along the path to commercialization?

b.       How will you access the appropriate funds? Provide specific contacts, leads, previous relationships and agreements already in place.

c.       What commitments do you have for follow-on funding?

d.       Describe the revenue streams (licensing, product sales or other) associated with your commercialization plan?  What are the adoption rates?

e.       When do you anticipate “first revenues” from each stream?

f.         When do you expect to reach “break even”?

g.       Provide annual pro formas for the next five years (2 years of the Phase II effort + 3 years post Phase II). Income Statements are required.  Cash Flow and Balance Sheets may be included if they are considered critical for your strategy.  If not included, Cash Flow and Balance Sheets should be available upon request from NSF?

h.       What are the assumptions made when developing your models?  How have you validated these assumptions?

N.B., Small businesses with NSF SBIR/STTR Phase I awards should actively pursue follow on funding commitments. If a Phase I award leads to a successful NSF Phase II award, an incentive to the Phase II awardees to pursue non-NSF third party funding is offered in the form of supplemental Phase IIB funding. In order to qualify for the Phase IIB competition, the Phase II awardee must secure and receive third party (private or non-SBIR government) funding during Phase II.  The main objective of the Phase IIB Supplement is to extend the R&D efforts beyond the Phase II grant to meet the requirements of a third party investor, to accelerate the Phase II project to the commercialization stage, and/or to enhance the overall strength of the commercial potential of the Phase II project. For more information, please refer to the Phase IIB web page. (http://www.nsf.gov/eng/iip/sbir/phase_iib.jsp)