I might be the most popular guy in Idaho right now. That's what happens when you have money to give away.

The Idaho Legislature gave me a pot of money to help Idaho's small businesses apply for federal research and development grants. Tuesday marked the beginning of the state fiscal year, which is when the money became available. I have one year to give it all away, or the funding reverts back to the state's general fund.

Why did the Legislature set up this $150,000 fund? Why is attracting federal research money so important?

First, innovation injects millions of dollars into Idaho's economy each year by creating new companies and expanding existing ones. Idaho companies are developing technologies to convert cattle waste into methane, to create robotic bulldozers to safely create fire breaks and to convert biomass into alternative fuels.

Second, applying for a federal R&D grant is not an easy task. Just ask any company that has done it, especially for the first first time, and it'll tell you that it takes a lot of time and effort. Before you begin, you must have a truly innovative idea worthy of R&D dollars. Because it is research, you need to have a principal researcher, preferably with the right credentials. You also need to write a 20-25 page proposal.

Third, applying for a federal grant is very competitive, and winning an award is far from assured. Nationally, about 1-in-10 small-business grant proposals are funded.

This is where my pot of money - the Idaho Grant Proposal Incentive Fund - comes in. I administer this fund to help small businesses apply for federal R&D grants. Companies that apply can receive a state grant of up to $3,000 to pay for things like grant writers, proposal reviews or a grant coach to help them through the proposal process. A previous program like this - which had funding during the 2007 fiscal year - had great success. Businesses that used the state's help were able to increase the odds of getting federal funding from 1-in-10 to less than 1-in-4.

Idaho companies that received federal grants are creating things such as a flashlight that never needs batteries and recharges in less than two minutes, a computer that is hacker proof, and a cell phone battery that recharges itself as you walk.

The process of applying for federal funding is complicated and doesn't always fit into a company's timeline, but the rewards can be significant:

• A federal grant can range from $100,000 to several million dollars.

• Grants are not loans. You do not have to pay back the money.

• Most grants do not require matching funds or equity.

• The intellectual property rights remain with your business.

• You retain ownership of your business.

• A federal grant award provides verification for your business and idea.

• A federal grant award can be a leveraging tool to attract venture capital.

If you're thinking about applying for a federal R&D grant, there are three questions you need to ask:

• Do you have an innovative research idea? To qualify for federal R&D grants, your idea must be truly innovative. R&D grants are not for starting a dry-cleaning business or remodeling a day care.

• Do the federal grant timelines fit your needs? It can take six to 12 months between applying for a grant and receiving the funds.

• Do you want to commercialize your idea? The goal of federal R&D grants for small businesses is to commercialize technology, grow the companies and stimulate the economy through job creation. To get funded, businesses must clearly show how they will commercialize their product.

If you answered yes to all three questions, a federal R&D grant may be right for your company.

You can apply for state help online by going to the Department of Commerce Web site at www.technology.idaho.gov/federal-funding. Click on the link that says Apply for Assistance.

Mark Strait administrates the Idaho Grant Proposal Incentive Fund for the Idaho Department of Commerce. Contact him at mark.strait@commerce.idaho.gov.

Starting Up is a series published on Thursdays. The columns grew from discussions between the Statesman and local tech and entrepreneurial leaders and are coordinated by Julie Howard, a specialist for the Idaho Office of Science and Technology. Reach her at julie.howard@commerce.idaho.gov.

Article By Mark Strait - Special to the Idaho Statesman

Edition Date: 07/03/08