Cary company uses federal grants and research to improve lives

vbridges@newsobserver.comMarch 10, 2014 

  • Resources

    The Small Business Innovation Research program is a competitive program that seeks to help U.S. small businesses take on federal research and development projects in identified areas and create products and services for commercialization. Go to for more.

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    Online video

    Go to to watch Melissa DeRosier talk about how research companies can get their products to the marketplace.

— Year by year, lesson by lesson, Melissa DeRosier has transformed a company founded in her attic into a 75-member team that develops better ways to deliver social solutions to the masses.

“She’s changing families’ lives,” said Lynn Douthett, the U.S. Small Business Administration’s North Carolina District director. “She’s changing health care professionals’ lives all across the country.”

DeRosier founded 3C Institute in 2001 and initially developed and sold research-driven social skills assessment and improvement programs to teachers and parents.

Nearly 13 years later, 3C has garnered more than $25 million in mostly federal grants and is preparing to move yet again to a 22,000-square-foot space in Research Triangle Park. An outpatient mental health clinic for children and families will remain in Cary.

The new space will house the company’s research projects and a pipeline of workers who can customize digital information delivery systems, including intelligent games, e-training platforms and web-based assessments, for 3C Institute and other companies.

On Friday, DeRosier was the first to be recognized by the SBA’s North Carolina District with an Award of Excellence for Innovation and Social Entrepreneurship, which highlights entrepreneurs who find unique and novel solutions to social problems, Douthett said.

Humble beginnings

DeRosier, a licensed clinical psychologist, received her doctorate from UNC-Chapel Hill in 1992 and completed a two-year fellowship at Duke University Medical Center.

She then worked on a five-year federal grant examining bullying and violence prevention in Wake County schools. In the fourth year of the grant, DeRosier started contemplating her career path.

She wanted to address a “research to practice” gap. Teachers and schools were using unproven programs to improve social skills and emotional health, and not research-based programs.

So DeRosier founded her company, worked in her attic office and sought Small Business Innovative Research grants.

SBIR program funding is given through a competitive process to small companies to explore the feasibility of an idea or technology, expand federal research and, ultimately, bring the innovation to the marketplace, said John Ujvari, an SBIR program specialist for the N.C. Small Business & Technology Development Center.

Eleven federal agencies award SBIR grants or contracts to businesses with less than 500 employees. North Carolina companies collect about $60 million of the $2.5 billion SBIR and Small Business Technology Transfer funds, which seeks to promote technological innovation, Ujvari said.

“You have to have, first, an innovative idea, a novel idea that fits with one of the 11 participating agencies’ missions,” Ujvari said. “No. 2, they do look at very carefully who the team is that is going to be carrying out the research and development that is funded.”

The funding is generally broken into two phases.

Phase one allows grantees to carry out a proof-of-concept study with funding of generally up to $150,000 for six months.

After a report is submitted, the federal agency then decides whether to fund the second phase of the project with funds that generally do not exceed $1 million for two years.

“That funding is to build on what you do in phase one, but the end goal of the phase two is to have a finished product,” that is ready to sell, Ujvari said.

In phase three, which isn’t funded, the company is expected to pursue commercialization, through options such as in-house sales, licensing or distribution arrangements. Many technologies, such as pharmaceuticals, are often not able to be fully developed just through SBIR funding.

“That’s where equity funding often comes in,” he said.

SBIR awardees’ likelihood of successfully attracting additional funding is about 1 in 9,he said.

“It’s a great leveraging tool,” he said.

Developing a product

DeRosier received phase one funding from the National Institute of Mental Health for three proposals. The proposals included researching options for parent training in social skills development, a social skills program for children with high-functioning autism, and social skills assessment software that could be used in schools.

DeRosier moved into a small office space and hired four part-time employees. They developed the initial prototypes, submitted the reports and waited for months.

She eventually learned the parent training program and the autism social skills programs would receive funding for phase two, which generally takes three to five years, she said. They developed the curriculum and completed a clinical trial.

Over time, the company got into a groove of applying for and obtaining grants and established a set of products dubbed S.S. Grin that help improve social skills in children ages 3 to 16.

“Then what happens is you start releasing products and you start building your commercialization side of the company,” she said.

DeRosier sold S.S. Grin kits to schools, teachers and parents. The kits included a one-time training session and related curriculum. After monitoring the program’s use in Chapel Hill schools, DeRosier noticed various barriers to extensive and consistent use that included price, teacher turnover and lack of access to ongoing training and support, she said.

“Technology to me was and is the answer,” she said.

The company started to incorporate online manuals, quick tips, and ongoing support through email and other options.

That discovery and implementation lead to 3C Institute establishing three different virtual information delivery systems that the company can customize and sell to other businesses facing similar challenges.

“So we have devoted the last eight years or more to developing different technologies so that we can implement or scale up these programs so more kids can benefit,” she said. “We are really a technology solutions company now.”

Bridges: 919-829-8917; Twitter: @virginiabridges

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