SBIR and STTR Guidance
The federally-funded Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs encourage small businesses to engage in research and development that could lead to technology commercialization. Small businesses collaborate with a research institution, such as Virginia Tech, in Phases I and II through the issuance of a subaward to the research institution.
Virginia Tech supports faculty participation in SBIR/STTR programs as this can facilitate rapid progress towards commercialization of important inventions. However, when a member of the Virginia Tech research team has a financial interest in the small business applicant and they will also conduct Virginia Tech research funded by the small business, this creates a financial conflict of interest (FCOI) for that individual. Importantly, due to state law considerations, the situation could still be an FCOI and require next steps even if the person isn’t involved in the Virginia Tech research.
An FCOI assessment is based on the factual context of the situation and is not based on any implied judgment about the character or intent of the individual. However, SBIR/STTR programs have a unique potential for conflicts of interest, which could lead to a:
- Concern that the individual may be using Virginia Tech laboratories, students, colleagues, funds, or other university resources to support the small business, which could jeopardize academic research and degree progression;
- Concern that research objectivity has been compromised; and
- Blurring of the boundary between the university and the for-profit small business.
Due to the unique potential for conflicts of interest, the following guidelines have been developed to guide faculty as they prepare SBIR and STTR proposals and manage grant subawards.
Please note that the principles that govern Virginia Tech research and the potential concerns identified above remain the same regardless of the type of funding; therefore, although the federal rules for FCOI exempt Phase I SBIR projects from FCOI requirements, Virginia Tech policy does not exempt these relationships from review and management.
Guidelines for Faculty Participation in SBIR and STTR Programs
Outside activities and certain financial interests must be disclosed to Virginia Tech in the Disclosure and Management System, as described on the Disclosure Guidance page. The module you use depends on your relationship with the small business applicant. After the disclosure is submitted, the Research COI Program will reach out to coordinate next steps, if any.
If you want to consult or work for the entity:
- You must use the Outside Activity module if you want to participate in an outside activity (i.e., consulting or outside employment) with the small business because it requires your department head/supervisor’s prior approval. This is a faculty-initiated disclosure that must be submitted in the Disclosure and Management System initially, renewed annually, and updated within 30 days of any changes (e.g., when financial interests change). Please note that the financial interest portion of your outside activity disclosure must be updated within 30 days when changes occur (e.g., after receiving remuneration from the entity).
If you have a financial interest in the small business that exceeds certain thresholds, you must disclose the financial interest to Virginia Tech.
- If you want to consult or work for the entity, you would disclose in the Outside Activity module as described above.
- If you’re a sponsored researcher, the Research COI Program will prompt you to submit the Research Financial Interest Disclosure initially/annually. If you've disclosed all your financial interests in the context of your outside activity disclosures, you'll be prompted to annually certify there are no changes to your financial interests. Please remember you must independently update your disclosure within 30 days of changes.
- If your financial interest is related to university contracting, you must disclose in the Financial Interest in a Business module. This is an employee-initiated disclosure. If you already disclosed your financial interest in another module and your financial interest is related to sponsored research contracting, you do not need to disclose again via this module. If your financial interest relates to purchasing, real estate, or non-research sponsored projects, you must disclose again in this module. It is recommended that you contact firstname.lastname@example.org prior to using this module.
* A financial interest held by you (or your spouse/dependent children) that a) is related to Virginia Tech contracting and b) exceeds 3% equity in or $5,000 in annual payments from the business/vendor.
Please note that the information on this website pertains to disclosing to Virginia Tech. Your disclosures, as described throughout these pages and recorded in the Disclosure and Management System, do not alleviate your obligation to disclose to federal sponsors (via the proposal being submitted by OSP). If you have questions about what should be disclosed via the proposal to the sponsor, please review the guidance on OSP’s website or contact email@example.com.
Due to the primary employment requirement for SBIR programs and some NSF STTR programs, full-time Virginia Tech faculty cannot serve as PI for the small business. Faculty who plan to serve as the small business PI on SBIR or NSF STTR programs must reduce their employment at the university or take a leave of absence/research leave in order to serve in this role.
In the case of research sponsored by a business in which the Investigator holds >3% of the total equity of the business, an Investigator may not serve as the PI on both sides of the project (i.e., as the small business PI and the university subaward PI). Any exceptions must be approved by the Management Plan Advisory Committee as described by Policy 13010, Conflict of Interest.
Faculty may serve as the PI for either the small business or the subaward to Virginia Tech. If you or any member of the study team have disclosed a financial interest in the small business issuing the subaward that exceeds certain thresholds, a management plan will be put into place to mitigate the FCOI, promote research objectivity, and provide academic protection for graduate students and postdoctoral scholars. See the FCOI Review section below for more information.
If you or any member of the study team have disclosed a financial interest in the small business issuing the subaward that exceeds certain thresholds, the Research COI Program will develop a plan for managing the FCOI. The management plan is designed to mitigate the conflict, promote research objectivity, and provide academic and professional protection of graduate students and postdoctoral scholars, respectively. The Management Plan Advisory Committee (MPAC), a standing committee of the university, will make recommendations to the program director regarding how the financial conflict of interest should be managed to ensure that sponsored research will be objective and free from bias, to the extent possible. The management plan must be adopted prior to the start of the research and will be based on state and federal requirements and input from MPAC and the Investigator with an FCOI, as needed.
- It is critical to note that financial interests related to the small business must be submitted and reviewed by the Research COI Program before the university enters into a contract with the small business. Disclosures must be updated within 30 days of any changes (e.g., when financial interests change).
The elements of the management plan will depend on the nature of the financial interest and the proposed research, but will include, at a minimum, disclosure of the financial interest to the study team, including students and post-docs, and in presentations/publications. Management plan terms are formalized and accepted in the Disclosure and Management System.
Use of university resources on behalf of a small business is not permitted unless Virginia Tech is performing the scope of work authorized through the subaward from the small business to Virginia Tech and that subaward is fully executed before work begins. Only the documented subawarded work is authorized to be performed using Virginia Tech resources.
The University Facilities Usage and Events policy (No. 5000) allows you to use university resources if you pay the rate determined by the Controller's Office and the use is approved by your department/college in the context of your outside activity disclosure, which documents the use of university resources. This only applies in the context of approved consulting activities, and the proposed use cannot interfere with or have priority over anticipated university use of the equipment or facilities.
Note that rights to intellectual property cannot generally be assigned to an entity other than Virginia Tech except as permitted pursuant to Policy 13000, Policy on Intellectual Property.
University personnel cannot support the small business funding application whatsoever, including developing a budget or proposal on behalf of the small business. The involvement of the university in such activities occurs only to the extent that Virginia Tech is an intended subawardee in the research, in which case typical involvement of Virginia Tech researchers and research administrators is permissible. University personnel cannot provide any pre- or post-award support to the small business or make arrangements/handle reimbursements for small business travel.
Graduate students and post-docs might be involved in research sponsored by a faculty-owned business. In developing the management plan for sponsored research involving an FCOI, the Research COI Program will consider putting academic or professional protections in place for graduate students or postdoctoral scholars, respectively. When the faculty-owner serves as the graduate student’s sole advisor or the post-doc’s supervisor, the faculty-owner’s department head/supervisor will be appointed as oversight so they can monitor (to the extent they deem responsible) their academic or professional progress in the context of their involvement in the sponsored research under the management plan.
Graduate students (in certain limited circumstances) must disclose additional employment outside of the Disclosure and Management System. See the Additional Employment for Students Holding a Graduate Assistantship section of the Graduate Catalog. Contact the Graduate School with any questions.
Post-docs should refer to the Disclosure section above.