Entrepreneur and President/Founder of Mainstream Engineering Robert Scaringe was provided more than $61 million in venture capital over the last 25 years. This investment allowed him to develop and manufacture approximately 26 products and launch three other companies.
Who is the venture capitalist that allowed Scaringe to start and grow businesses and create jobs? It’s Uncle Sam—the federal government—and financing is made possible through the Small Business Innovation Research (SBIR) program. Scaringe is one of south Florida’s most successful business owners among thousands nationwide who have taken advantage of the 30-year-old federal program.
“The U.S. government is a great venture capitalist,” said Scaringe. “They provide you with capital and they don’t want any control of your company. They help you develop a product if your product will help the government.”
The SBIR program encourages small businesses to handle federal research and development with an eye for commercializing the work into a product that can be manufactured and sold. The competitive awards-based program coordinated by the Small Business Administration (SBA), allows small businesses like Mainstream Engineering in Rockledge, Fla., to profit from the commercialization of research and development needs of federal agencies. In FY 2013 alone, SBA’s SBIR programs accounted for more than $2.5 billion in federal research and development funds.
“I’ve been involved with the SBIR program since I founded Mainstream Engineering in 1986,” recalled Scaringe. “It was much harder to get a product from a SBIR award back then because the government was looking for high-risk high-payoff R&D projects, but today’s SBIR program is more focused on dual-use commercialization.”
The SBIR program goals are to stimulate technological innovation, answer federal research and development needs, foster and encourage small business participation in innovation and entrepreneurship, and increase the commercialization of innovations derived from SBIR funding.
“I like to think of the government as a microcosm of the world. What the government wants done in research and development is probably something somebody else wants and needs,” said Scaringe. “Our company looks at every SBIR R&D topic and we ask ourselves if there is an innovative new product we can make from this work. Everything we do goes toward developing a useful product to address someone’s needs—that’s what R&D engineering is all about, using advancing technology to develop solutions. As our slogan says, Solutions Through Advanced Technology®.”
Eleven federal agencies use the SBIR program for their research and development needs. The program is structured in three phases. During the first phase, a small business can apply and receive an award not to exceed $150,000. In this first phase, the small businesses must establish the technical merit, feasibility and commercial potential of their proposed R&D efforts.
“As a company, we’ve been successful receiving Phase I contracts because we match federal money with our own money. The government sees our commitment to a product and therefore we are less risky,” said Scaringe.
If a small business achieves the R&D efforts proposed in its Phase I SBIR proposal application, the company can qualify for a second phase grant that can be as much as $1 million over two years.
Mainstream Engineering has benefitted and grown because of its participation in the SBIR program, but the company’s sustained growth and success is due to the commercialization of the SBIR innovations. The company manufactures thermal control and energy conversion equipment, including the design and manufacture of the government’s Improved Environmental Control Units (IECUs) and TriCon Refrigerated Container Systems (TRCS), Modular Environmental Control Units (MECU), advanced diesel engines and engine components, compact fuel cells for portable power, advanced electrical energy management systems, and advanced heating and cooling products. Its commercial line of QwikProducts are used worldwide by commercial air conditioning and refrigeration technicians.
With more than 100 employees on staff at Mainstream Engineering, Scaringe’s entrepreneurial success led to the spin-off and creation of other companies including Rivian Automotive and Mainstream Bioenergy.
At last count, Mainstream Engineering received 247 Phase I and Phase II SBIR grants for nearly $61.4 million. The company’s most recent award was a Phase II contract from the U.S. Army to continue R&D for a lightweight material that could be used in a self-contained breathing apparatus to replace compressed-oxygen cylinders. Naturally, first responders and other commercial entities that use similar self-contained breathing devices in their professions would be interested in lighter, more reliable equipment.
Because of the critical role Mainstream Engineering plays in the federal R&D arena, Scaringe was one of 25 small business owners honored with SBA’s Tibbetts Award in June. Mainstream had been recognized with an earlier Tibbetts Award for Commercialization, along with SBA’s Prime Contractor of the Year for the Southeastern U.S., SBA’s Administrator’s Award for Excellence, State of Florida Governor’s New Product Award, several Blue Chip Enterprise Initiative Awards, state and city awards for job creation; 50 Florida Companies to Watch Award; and the 2013 Florida Excellence Award by the Small Business Institute for Excellence in Commerce.
“Mainstream Engineering does not exist for the narrow purpose of making a profit, but rather to create and develop technology and product innovations that benefit mankind. Mainstream exists to provide a meaningful contribution by performing the best research and engineering in the world,” said Scaringe this year after receiving his second Tibbetts Award.