R&D Funding Through The U.S. Government

R&D Funding

This article originally appeared in the December 2018 issue of Wire Journal International.

This feature highlights a funding opportunity available through the U.S. government. If you have an innovative concept but are leery of costly R&D, the federal government may be able to help.

The riskier the premise, the better your chances of receiving funding. There are internal costs, but the process does work; wire and cable awards have been issued. Further, it may be feasible to access outside technology, opening up future markets.

Types of Federal Funding Available to Small U.S. Companies

Paul Wagner discusses Minnesota Wire’s journey and the road to winning U.S. government R&D awards.

Each year, 11 federal departments and agencies are required to reserve a portion of their R&D funds for awards to small business. These include the departments of Agriculture; Commerce; Defense; Education, Energy, Health and Human Services (HHS), Homeland Security, Transportation, the EPA, NASA and the National Science Foundation (NSF). Each body’s websites explain their programs.

The federal government provides R&D funding primarily through two programs, both of which come under the U.S. Small Business Administration (SBA) Office of Technology. A proposal for either program must be submitted in response to an “open” research topic listed online.

The Small Business Innovation Research (SBIR) program. Candidates are limited to 500 employees, must be American-owned and independently operated, and for-profit, with the principal researcher employed by the business. A Principal Investigator (PI) must be named.

For 2018, Phase I, the start-up phase, provides awards of up to $150,000 for approximately six months for further exploring the merit or feasibility of an idea or technology. Phase II awards, up to $1,000,0000, for as many as two years, can be used to expand Phase I results.

During this time, the R&D work is performed and the developer evaluates commercialization potential. Only Phase I award winners are considered for Phase II. Phase III, commercialization, is not funded, but significant Phase III dollars are sometimes available from the government using a different contract vehicle, other than SBIR/STTR.

The Small Business Technology Transfer (STTR) program. This program, which expands funding in the federal innovation R&D arena via five agencies, is similar to SBIR, but it expands the public/private sector partnership to include JV opportunities for small business and nonprofit research institutions. It does require a candidate to collaborate with a research institution in Phase I and Phase II. Unlike SBIR, the PI need not be an employee.

Each year, the departments of Defense, Energy, HHS, NASA and the NSF are required by STTR to reserve a portion of their R&D funds for award to small business/nonprofit research institution partnerships. The agencies make STTR awards based on small business/nonprofit research institution qualification, degree of innovation, and future market potential. The STTR program is generally similar to that of SBIR, other than for Phase I award period is longer, approximately one year. As with SBIR, Phase III does not get funding. More details, including the full qualifications, can be found at www.sbir.gov.

While carbon nanotubes and high-temp superconductors account for many projects, past funded proposals have included tow wires for a submarine, lightweight wire and cable for aircraft, tungsten 3% rhenium wire, wire coatings, graphene wire, dimensionally stable composite cables, and more.

SBIR/STTR: Noteworthy Aspects

SBIR was created by Roland Tibbetts at the National Science Foundation and signed into law in 1982 by President Ronald Reagan.

Awards are offered by the SBIR (11 agencies), and STTR (five agencies).

Each year, more than $2 billion in awards are issued.

The success rate for applicants for Phase I is 15 to 20%, and for Phase II it is 30 to 50%.

To date, some 160,000 awards have been issued, and more than 70,000 patents issued.

To date, SBIR programs have awarded over $43 billion to American small businesses.

Some 450,000 engineers and scientists have taken part, one of the largest STEM talent concentrations in the world.

Lack of a Ph.D. is Not an Excuse

A manufacturer without a Ph.D. can still prepare a successful proposal, declares Chip Laingen, an executive for Logistic Specialties, Inc. (LSI), which last year bought the Minnesota Defense Alliance. Below, he explains why.

Many manufacturers are better than they think they are. Be bold about the inventiveness of your engineering team. An essence may either exist or be able to be bolstered to where, for some goals, it equals the intellectual capital of any academic research institution.

Do not avoid R&D funding paths that either explicitly or implicitly require one to partner with a Ph.D. and/or an academic institution, a testing facility or federal lab. You, as a manufacturer, can offer a real-world commercialization path, prototyping and full scale production as well as disciplined project management timelines. You need to fill in the gaps, so seek out partners that can provide that, including academia.

In a perfect world, a candidate would have both university research credentials and honed manufacturing processes, but those don’t have to be mutually exclusive. Assemble a team to the table that can do both, and you have the essence needed to secure R&D contracts.

Minnesota Wire's R&D Story: From the Kitchen Table to Satellites

Founded in 1968, Minnesota Wire evolved from a bulk cable manufacturer to be a technology leader in fields such as medical and defense. That success was fueled by taking advantage of federal funding for R&D (16 awards over 12 years). Below, company Chairman/CEO Paul Wagner explains how the metamorphosis came to be for a family business that was created at the kitchen table.

At Minnesota Wire, we believe we are unique compared to every other wire company, and frankly, most small manufacturing firms. We decided back in the 1990s that innovation was essential to survive and thrive in a fast-paced economy. We were not going to be dictated to by the market. Instead, we reached pretty aggressively for a different future, and it was a risky stretch, to re-invent how we made electrical conductors and shields for our target markets of medical and defense technologies. We saw that these sectors were going to need vastly different electrical interconnect systems, not just variations of what had been done the same way for a century or more. In this journey, we faced, and embraced, three big challenges.

1. Predicting market demand. This was the first challenge, and at the time the future was not so crystal clear. Internally, we felt comfortable in our assessment that conductors had to be lighter, more robust and offer even more added value, like built-in “smart” diagnostics, radar-absorbent components and assemblies that would not corrode over time. Further, we saw that wire had always been an afterthought for devices in these target markets. We concluded that making them central to the application design was the way to go. We were convinced that the market was ready for us if we could deliver.

2. The technology. The second challenge was how to get there from a technology perspective. We found much of the answer largely through our ground-breaking work with carbon nanotube (CNT) material. These connectivity products were lighter, non-corrosive and largely unknown to the wire and cable industry, yet they represented a unique way to match future designs for high tech products. They could also be more than just conductors, as they could serve as shielding for the interconnect assemblies. It was exciting to be driving the technology for our own products, rather than reacting to it.

3. Funding. Finally, our vision was admittedly ambitious for a small, family-owned wire company in the Midwest. We knew that self-funding the R&D was problematic, especially as there were no guarantees that the market would buy into our concept. So, we went to the greatest venture capitalist in the world: the U.S. Federal Government. The opportunity provided through the Small Business Innovation Research (SBIR) program allowed investigation and development of our CNT products. These programs are designed to engage small business innovation for national technology needs, particularly in defense. And from what we saw, very little of it was being applied to re-invent legacy wire. We had found our dream investor. At the same time, it was also a way to give back, as our innovations, commercialized, could keep soldiers safer and make them more effective.

At that point, it was a wild ride. We hired a really smart MIT grad to start writing our proposals to win research projects for the Pentagon. It was all about systematic bidding on relevant topics and “suggesting” topics to government program managers so we could bid on contracts we had helped design. This got us on a path to where we are now. We have bid on, and won, more than $6.6 million in federal R&D contracts. With those funds, we were able to develop the capability to design, process and establish performance relative to commercial wire products. Very quickly, we learned how small business can advance via the federal marketplace. The subject matter is broad and success depends on overall performance results that are acceptable by the customer.

R&D Funding 1

A Minnesota Wire CNT cable.

With our community-based values as a guide, we decided to share those lessons, and in 2004 we started a regional defense industry network called the Defense Alliance. Within a few years, the entity grew to over 800 corporate members in 34 states, eventually earning federal funds for its own operations from the U.S. Small Business Administration (SBA).

The Defense Alliance was designated an Advanced Defense Technologies cluster with the Department of Defense (DoD)’s endorsement, and has since contributed to its member companies gaining over $250 million in federal and commercial contracts, as well as the creation of over 2,200 high tech jobs. The company, which won the SBA’s Veteran Small Business Champion of the Year Award in 2007 and the 2014 Progress Minnesota Award, was sold last year to Logistic Specialties, Inc., and continues to assist small businesses in the Midwest.

All that energy and exposure led to other attention and opportunities, including a very competitive $2.3 million Rapid Innovation Fund (RIF) award to commercialize space wire for a three-letter agency and large prime defense contractors, and winning the national Tibbets Award for technology commercialization excellence. The RIF is designed to transition innovative technologies that resolve the Pentagon’s near-term (within two years) operational challenges.

We have continued development work on both our CNT and copper space wires, creating more than 4,000 cable variations to date. In 2016, we began receiving qualified orders and our products headed to space. We continue to sell finished product as well as R&D advancements to the country’s top five satellite manufacturers, which know full well that removing 20–50% of weight with CNT is critical to dropping launch costs. During our 14 years of R&D, we discovered ways to make our CNT cables offer greater strength and a longer flex life, radio translucence, inflammability and heat dissipation as well as corrosion resistance.

In summary, Minnesota Wire is an example of how commercialization of a vision—which at points, especially the early stages, may seem quite daunting—can be accomplished. We were able to re-invent how electrical interconnections are done for high-technology applications. We currently hold six patents for CNT, elastomeric conductors and shield fault protection capabilities. If we had not stretched beyond the comfort zone of our niche to take those first steps, our story would undoubtedly be far different. This was not an easy journey, but it was one that reflects the potential and possibilities that exist for those who are willing to embrace it.

R&D Funding 2

Paul Wagner with CNT sample.

Robust, Lightweight Wiring for Space Applications

Phase I

Company: Minnesota Wire
Agency: Department of Defense
Branch: Air Force
Amount: $149,935
Program: SBIR Year: 2012

Abstract: Phase I technical objectives are to: develop a requirements analysis for EMI shielding for Space Wires; develop prototype CNT shielded wires that are ECSS-E-ST-50-12C compliant; conduct validation testing of CNT shielded wires to make an initial assessment of robustness of cables; investigate termination strategies for the ECSS-EST-50-12C compliant CNT shielded wires.

Benefit: The potential benefits of this innovation could include military development for future ground, air or space systems that have stringent weight requirements, including launch vehicles, UAVs, portable communications, small satellites, etc.

Phase II

Company: Minnesota Wire
Agency: Department of Defense
Branch: Air Force
Program: SBIR Year: 2014

Abstract: Using a Phase I SBIR grant, Minnesota Defense and the University of Minnesota used carbon nanotubes (CNT) to create coax and ethernet cables that weigh 23.2% and 42%, respectively, less than commercial off-the-shelf cables. This Phase II grant will fund the optimization of the cables, validation of the physical performance of the wires, and perform aging tests to ensure fulllife-cycle performance.

Benefit: Reducing the weight of coax and ethernet cables using CNTs has the potential to provide significant cost savings, reduce maintenance and improve reliability of satellites. These would be impactful for government and commercial satellite applications.

Further Thoughts From Paul Wagner on Federal Funding

What do you consider your greatest R&D success that directly stems from the awards you won?

For Minnesota Wire, the success stories are commercializing copper and carbon nanotube (CNT) wires for space and satellites. We were able to win R&D funding to create rugged iSTRETCH® cables to improve soldiers’ monitoring and communications, then we drove that technology into medical wearable patient monitoring systems – a true “Life Saving Connection.”

I also want to highlight the considerable success of the entity we founded in 2005, the Defense Alliance of Minnesota, which serves as a regional business alliance for the defense industry, and now has member companies in 34 states. In three years, it won $250 million in Department of Defense (DOD) grants for small businesses. As a footnote, we are proud to note that we had a federal R&D proposal success rate of 80% versus the industry average of 13%.

Did you have a high success rate from the start?

Not always, and that actually turned out to be a bit of a blessing. Our original proposals for iSTRETCH cables were initially turned down. We contacted the topic author to ask why, and he gave us some good advice. We rewrote the proposal and planned to resend it for review. He told us not to bother as the program was closed, but we wanted to demonstrate that we were serious. We submitted the revised proposal within 30 days. He was very impressed with the extra effort and overall idea, and passed it off to another topic author, who eventually led to our approval for funding our iSTRETCH cable research.

How long did it take for you to develop and commercialize iSTRETCH as well as your carbon nanotube (CNT) cables?

Overall, we spent 12 to 14 years developing and commercializing iSTRETCH and CNT cables, with us getting about $6.5 million in awards from the DoD. For individual awards, the bidding and approval process takes 90 days, and with most SBIRs, you have nine months to complete the work. If you can plan properly, a company has a chance at getting another award in the same budget year for Phase II development.

Having developed multiple proposals, is it fair to say that you have proposal writing down to a science?

We did come a long way, to the point where our Defense Alliance taught classes on the process of bidding DoD grants to other small business owners. Part of the secret sauce is to prepare a proposal while keeping trade secrets and processes from full view to protect the company. One definitely should speak with the topic author during the 30-day verbal communication open window. They are required to talk to bidders and will answer any questions you might have. That interaction also helps them get them used to hearing your company’s name. After receiving the award, it’s essential to meet face-to-face with the topic author. Ensure timely monthly reporting. You may see more flexibility and willingness to change the obligation and scope of the work.

Has applying for grants over the years helped your company as a whole elsewhere?

We have a long list of lessons learned.

Stay in your lane! Complement and advance your best competitive advantages.

Be careful of distractions and learn when to say “no.” We once accepted an award to create a 65-lb connector, which is not a staple product for us. We did it, but our resources could have been better used elsewhere.

Innovate new products to help deter margin erosion and build unique competitiveness.

Recognize the value in expanding one’s technology footprint, gross margins and one’s supply chain.

Never stop looking for awards to supplement your R&D budget. Through our development work, to date, we have won six patents on our new technologies.

Are you surprised more companies do not do this?

I believe that a lot of companies still do not  realize that 3% of the DoD budget is allocated for companies with under 500 employees. The ability to capture significant R&D awards that allows you to pursue state-of-the-art technology represents a competitive advantage.

I think it also helps if you can combine the art of communication/sales with great scientific people. Our director of R&D, Tom Kukowski leads product development and helps us understand emerging technology markets while I’m the visionary/entrepreneur. That combination gives us a healthy holistic view. A company should approach opportunities from both a technical as well as a sales position. At Minnesota Wire, we plan to continue doing that.

Contact Minnesota Wire to learn more about our capabilities or to discuss your project.


R&D Funding 3
R&D Funding 4
R&D Funding 5

Minnesota Wire

1835 Energy Park Drive

St. Paul, MN 55108



Minnesota Wire

2515 Prospect Drive

Eau Claire, WI 54703








IPC E-Textiles 2020 Virtual Summit, October 1-2, will consist of three educational workshops and virtual demonstrations by the University of Minnesota Wearable Technology Lab.


IPC E-Textiles 2020 Virtual Summit, October 1-2, will consist of three educational workshops and virtual demonstrations by the University of Minnesota Wearable Technology Lab.

iSTRETCH in Defense

5 Conductor, 26 Gauge with PV Jacket coil Assembly

Minnesota Wire has begun manufacturing 8,568 specialty coil assemblies utilizing our patented iSTRETCH wire for a defense contractor. Each of the assemblies contains a sixteen-foot, six-lead cable. The sale represents the largest single sale of iSTRETCH in the company's history!

A Revolution in Possibilities

As Seen at CES 2019


Think—boundless. Wrap a flex circuit around Minnesota Wire’s patented iSTRETCH, attach mCube’s MEMS-based motion sensors and experience a complete revolution.


iSTRETCH and The Greenland Ice Sheet

An ambitious research program involving the Greenland ice sheet will utilize Minnesota Wire’s iSTRETCH cable. The project endeavors to understand how climate is affecting the flow of the Greenland ice sheet, the second largest ice mass on the planet and the primary cause of global sea-level rise.


MN Wire is proud to announce we have received the Minnesota Family Business Award from the Twin Cities Business Magazine!


MN Wire has been featured in the May 2020 edition of the National Defense Magazine.


Lee Eisenbraun began working at Minnesota Wire in 2008 as a Process Technician. Lee’s natural talent and intelligence were immediately apparent, and he was promoted to Process Technician II.

R&D Funding Through the U.S. Government

 If you have an innovative concept but are leery of costly R&D, the federal government may be able to help.

Critical Steps for Developing a Successful Medical Device Interconnect Cable

Don't miss this article written by our very own Steve Pape. Steve is Minnesota Wire's Design Engineering Manager. The article first appeared in the Medical Design Briefs, January, 2016 issue. The article is loaded with solid information.


SOLIDshot is a new wearable basketball shot improvement system that utilizes Minnesota Wire's iSTRETCH. SOLIDshot tracks and records a player's arm movement. A digital readout displays information that highlights changes the shooter needs to make—improving the form and consistency of a player's shots.

Select the link and check out the video—high scores for technology!


Each year Minnesota Wire honors local veterans. This year we created a special video, click the link below to watch it.