By John Ujvari, SBIR Program Specialist, NC SBTDC
An often underutilized approach to build instant credibility with SBIR / STTR proposal reviewers is to include relevant letters of support. NIH, for example, offers proposers the opportunity to submit up to three letters of support with your application package. Below, we discuss who these letters should come from and the appropriate content.
Given that you can submit up to three letters, let’s think about three different letter writers that will help to build a strong case for your business and the technology you are proposing. You have a few options. Getting these letters can take time, so start this process early.
Buyer / Customer: Let’s think about a sample technology, perhaps a pharmaceutical for the novel treatment of strokes. A letter from a potential buyer / customer demonstrates that, at the end of the long road of development, there will be someone, theoretically, that is willing to pay for your product. In this example, the end product may be a pill that reduces the occurrence of stroke. If you are a small business (really any pharma company smaller than Glaxo or Pfizer), your business is not likely going to be the company that sells the medication to the end user (the patient). Your customer will be the Glaxo’s and Pfizer’s of the world, the big companies that have the sales and marketing might to take the technology to doctors and patients. In this case, requesting a letter of support from a large pharmaceutical company would be perfect. Getting a letter from a large pharma company may be a tall order unless you have a great connection. So perhaps you can identify a retired executive from large pharma. Be creative in how you can get such a letter from a large corporation.
Users / Advocacy Groups: In this letter, you will be demonstrating that the marketplace understands the importance of your technology. Does this mean that you ask your 79 year old neighbor who has had two strokes to write a letter for you? No – think harder. How about the American Heart Association or another well regarded advocacy group that exists on behalf of the end user. A letter from such a group demonstrates that you have connected with an important proponent and they have reiterated the need in the marketplace for a novel technology to solve the problem that they care about.
Follow-on Funders: Following the end of a Phase 2 SBIR/STTR, your business is going to continue to incur R&D, marketing / sales, general operations and patent expenses. None of this is free, so how will your business cover these expenses? The reviewers want to know! One common method is to raise funds from outside entities who will in turn take a stake in your business, also known as equity. Equity funders can be an individual or group of angel investors, venture capital groups or a company that wants to partner with you. The goal of the letter from a follow-on funder is to demonstrate that you have thought about the need for post SBIR/STTR funding and have identified a strong lead for the source of said funding.
One important point, that may sound counter intuitive, is that you should draft the letters. In other words, take the opportunity to tell the person you are asking to provide a letter, exactly what you need the letter to say. Provide the person or entity a draft for them to tweak as necessary, ask them to place it on their organization’s letter head and send it back you.
A final point – be sure you let the letter providers know that the goal of the letter is not to get a commitment to buy or use or fund your product. If it was, no one would ever sign such a letter. The goal of the letters is to show support of your technology from three different standpoints: users, buyers and funders.