Israeli-New Jersey R&D Collaborations Receive Cash Support from BIRD Foundation

If you have an R&D project that you’re trying to commercialize, and that could benefit from an addition of Israeli technology, there’s funding available for that.

In fact, many New Jersey tech companies have been successful in their R&D collaborations with Israeli tech companies, having secured financial support from the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation. The Tel Aviv-based BIRD Foundation, which has staff in New Jersey and California, was established in 1977 by the governments of the United States and Israel to promote mutually beneficial industrial R&D.

Last month, TiE New Jersey (Edison) partnered with the Philadelphia-Israel Chamber of Commerce and the BIRD Foundation, for a program in a virtual series on alternative ways to finance a startup. The complete video of the discussion can be found online here.

BIRD Foundation

According to one of the speakers, Andrea Yonah, a West Windsor resident who is director of business development for the BIRD Foundation on the East Coast, the organization promotes collaboration between U.S. and Israeli companies in various technological fields for the purpose of joint product development.  In addition to providing conditional grants of up to $1 million for approved projects, the Foundation assists by working with the companies to identify potential strategic partners and facilitate introductions.

Projects submitted to the BIRD Foundation are reviewed by evaluators appointed by the National Institute of Standards and Technology (NIST), of the U.S. Department of Commerce, and the Israel Innovation Authority.

Yonah noted that the partnership between BIRD and the selected companies is a risk-sharing mechanism. BIRD puts up 50 percent of the combined budget of the U.S. and Israeli companies, up to $1 million per project. The funding requires a dollar-to-dollar match. The companies must pay back the amount funded “if and only if the project is successful.  We call this a ‘recoverable grant’ or ‘conditional grant,’ and if the project does not succeed — and we are interested in risky projects — the companies don’t have to pay back the grant,” she said.

If a project is successful and is commercialized, the grant does not dilute the value of the companies, and the BIRD Foundation does not retain any equity or intellectual property (IP). “It’s a royalty-based repayment mechanism,” she said. “We are not just investing in R&D, but we are investing in the ability to take that, bring it to the market and commercialize it.”

Igolgi’s Story

The TiE group had invited Kumar Ramaswamy, president and cofounder of igolgi (Barrington, Ill., and Princeton), who discussed his company’s experience as a recipient of BIRD funding.  The company had teamed up with Israel-based NovelSat to introduce FUSION, an all-in-one solution offering high levels of satellite transmission efficiency so that broadcasters can drive down operational costs.

NovelSat, a leader in satellite-transmission technology, and igolgi, a provider of video processing, delivery and analytics software and solutions, worked together to integrate high-efficiency multistream video encoding and satellite modulation into a single transmit unit, and satellite demodulation and multichannel video transcoding into a single receive unit.

Ramaswamy said that he had been meeting people from NovelSat at conferences, so he knew that they “make some very interesting technology for the satellite broadcast market.” Both companies understood that there are changes coming up in this market because of the 5G allocation for cellular phones, which will have unintended impacts on satellite companies, he noted.

Ramaswamy had been talking with NovelSat about the technology gap that needed to be overcome to mitigate the impact of the coming changes, but both companies believed that the risk involved in addressing the problem would be too big for the two companies to handle alone. They found the BIRD Foundation to help mitigate the risk.

Once 5G is implemented, satellite companies will lose at least half of their spectrums, Ramaswamy stated. For this reason, they’ll needed a solution that’s twice as efficient as their current solutions to continue operating at peak efficiency. “So, we came up with a solution that combines some of our technology, and some of the modulation technology that NovelSat has in the modulation-satellite-coordination space. And, together, we are able to achieve what is needed for the next-generation satellite system.”

A Successful Proposal

He then took the audience through the various phases of getting the funding. The partners had to come up with an executive summary, and then a proposal, which took about two months to develop based on weekly meetings. Ramaswamy called the BIRD proposal template, which created a document for them that topped out at 60 pages, very comprehensive and easy to get through, similar to what someone would use for a VC pitch. They also had an in-person meeting to finish it up.

Next, the partners hired an external reviewer to look at the proposal. Getting a third-party critique of the proposal was a “useful thing to do,” Ramaswamy said. The feedback was invaluable and was incorporated into the final document. They also got feedback from Yonah and from the Israel Innovation Authority, who were very helpful in sharpening the proposal. After it was submitted, they answered several follow-up questions from the evaluators. The project was approved in 2019, and the partners got started on it right away.

Asked what helped his proposal win one of the grants, Ramaswamy said, “Number one, we identified a fairly large market opportunity. I think, in this particular case, we saw a total addressable market for our equipment for about a billion dollars.”

Also, they clearly identified the disruption happening in the satellite broadcast market, and what equipment would be needed over the next five to seven years. “Our companies had complementary technology, so that helped.” Both companies had been in the market for more than 10 years, so they were clearly reliable and here to stay, a fact that strengthened their application.

During the TiE meeting’s question-and-answer period, members of the audience asked how they could be introduced to Israeli high-tech companies to collaborate with. Both speakers agreed that the firms should know all the companies doing high-tech research in their areas, and should be making those connections as a matter of course. Then, if an opportunity to partner comes up, they will already have the network to do so.  But Yonah added that the BIRD Foundation also does a fair amount of matchmaking.

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