Suchi Acharya never had to worry about funding her research while working for big pharmaceutical companies, including Alcon and Novartis, for about 13 years. She had corporate credit cards to support her work.
That changed when she left to start Fort Worth-based biotech startup AyuVis Research, which is working to develop an immunotherapy to fight infections and inflammation. One factor stood in her way: funding.
“You have this great idea, expertise, you can make a team,” Acharya said. “But you have to pay them, you have to do the study, things like that.”
To kick-start her research, Acharya turned to federal grants.
Acharya received a Small Business Innovation Research grant from the National Institute of Allergy and Infectious Diseases in 2017, which helped the company to hire staff, rent a lab and conduct research. Since then, the company recently received another $1.8 million from the National Institutes of Health’s small business innovation research grant.
Fort Worth companies received $4.4 million in Small Business Innovation Research grants between 2017 to 2021, according to data analyzed by Sparkyard. This number is far less than other major Texas cities like Dallas and Houston. Entrepreneurs and advocates say the city needs more resources to spread awareness of the grants.
Tarrant County recently gave $2 million to HSC Next to help with awareness of the small business innovation research grant program, according to Fort Worth Report coverage.
Acharya’s company went through a rigorous review and vetting process. By applying and receiving the grant, her research ideas are given legitimacy, which helps reassure potential investors.
Since receiving the federal grant, investors have poured $4.6 million into the company so far.
Small businesses that want to innovate need money to research and develop products. Fort Worth lags behind major Texas cities in investment in early stage companies, according to past Fort Worth Report coverage.
Small businesses like Acharya’s use Small Business Innovation Research grants and Small Business Technology Transfer grants to research and develop their products, with the possibility of commercializing the products later down the line.
Cortney Gumbleton, assistant director of the tech startup accelerator program Tech Fort Worth, said the grant program is like freelancing for the government, which incentivizes innovation. The government wants innovation, but there’s obstacles, Gumbleton said.
“You can’t do that with bureaucracy,” Gumbleton said. “There’s too much red tape. So what do you do? You hire a freelancer. You hire a consultant. You pay them to do the work, and then it’s shared for everybody.”
The grant program was created in 1982. Since then, the program is used by 11 different national agencies such as the Department of Agriculture, National Institutes of Health and Department of Defense to distribute as they see fit.
The grants have a big impact on the economy. Grants distributed by the Air Force, for example, created $14.7 billion in sales of new products, which includes $4.4 billion in military sales according to a 2018 economic impact report. The National Cancer Institute’s program created 107,918 new jobs across the country.
According to data collected by Gumbleton, 61 Tech Fort Worth current or alumni members have received a grant from the program between the start of the program and 2021– including AyuVis Research.
Because of the large numbers of entrepreneurs and researchers seeking financial support and rigorous application, the grants aren’t easy to get, Gumbleton said.
Dylan Jones is the founder and CEO of Animal Cloud, a company that is making an app to track animal health. The business started at the Texas Christian University Entrepreneurship and Innovation office, testing out a technology licensing out of the U.S. Department of Defense that could triage soldiers in the battlefield using bluetooth sensors and stream it to an Android device.
Jones wrote a plan to commercialize the technology and apply it for animal use cases. It can be used by pet owners and for military purposes, he said.
“If a dog gets hurt in the line of duty, you can begin triaging it, tracking all the information in a digital file,” Jones said. “And then give it to the next care provider so they kind of understand what’s going on.”
The company received a small business innovation research grant from U.S. Department of Defense which allowed them to contract with the U.S. Air Force. Jones said the grant programs are similar to venture funding, but without equity.
“These contracts are basically them saying you find a problem in our Air Force,” Jones said. “And we’ll give you research and development dollars to build this solution. But this solution needs to have a broader use case than just our use case.”
Jones and his team went to Lackland Air Force Base in San Antonio, where the Air Force trains military working dogs, to do interviews to understand the workflow and how they collect data on the dogs. He said they found that the Air Force would be open to a solution. Now, they are working on applying for a second grant to research and develop the product further.
Then, they have to compete with hundreds of other companies vying for money. The Air Force funds grants based on top priorities. Animal Cloud was placed on the non-funded list, and Jones’ team plans to resubmit a proposal.
The Small Business Innovation Research grant program is currently pending an extension by Congress before Sept. 30 when the program ends. Rob McClain, associate vice president of HSC Next at The University of North Texas Health Science Center at Fort Worth, isn’t worried about the reauthorization of the program, because it happens every five years.
“It may not be reauthorized until, you know, December,” McClain said. “And that’ll end up putting a pause on certain programs for a couple of months.”
But McClain is concerned by a lack of awareness about the small business innovation research grants and said the Health Science Center is trying to address that issue. He’s having more discussions with faculty about how research can build a company.
“We’re finding ourselves in discussions about is this something that we can build a company around, and how do we help jumpstart that company?” McClain said. “And so in these conversations we’ve been having more and more recently, (small business innovation research grants) is becoming an important part of that conversation.”
Business owners like Jones believe that more resources like incubators are needed to help guide them and to create a better entrepreneurial ecosystem. Jones attended a workshop in Oklahoma to write competitive grant proposals.
“You just need a lot of things when you’re an entrepreneur … because you’re like a baby, you don’t know anything,” Jones said. “You’re just lost and you’re just trying to win, but it’s competitive out there.”
Seth Bodine is a business and economic development reporter for the Fort Worth Report. Contact him at email@example.com and follow on Twitter at @sbodine120.