One of The best-kept secret in the world of capital is that the federal government has billions of dollars that it's dying to give to early-stage founders and inventors - and all you have to do is ask. Well, there is a file bit more than that, so here's a guide to stepping into the door of the massive innovation research program for small businesses.
First, as a backdrop: SBIR is a vast network of programs, spread across a dozen federal and military agencies, established some 40 years ago as a way to help any American with a great idea but with little access to capital.
Over time, it has grown to staggering proportions, with a total budget for the award in 2019 of nearly $ 3.3 billion. To be clear, this is money that is essentially intended to be donated to qualified recipients, and not as license fees, orders or shares; these cash prizes, ranging from hundreds of thousands to more than a million dollars, have a significantly reduced number of constraints.
That said, it's not like you just reach for the SBIR cookie jar and whip out a million dollars. As with anything involving the federal government, there is a process - and not a short or simple one. There are a number of official tutorials for later, but this article (informed by tips from program officials) should help you put yourself into practice.
It should be noted that this isn't the only technology-related government grant program by far, but it is is the largest, the widest, and probably the most accessible to small business owners and inventors like you - or will be once you read this guide. Be ready to do some work.
Step 1: Check it out for yourself
The first thing you should know is that the SBIR program operates with a specific type of entrepreneur in mind (although not uncommon): someone who needs money to develop and market a new technology or intellectual property, but it is not yet at the stage where they can attract traditional investments and the risk or cost is too high for an ordinary loan.
SBIR awards (some agencies offer "grants", others "contracts", but you can just say "awards") are basically money to take something from idea to marketing. They are not to pay down payments on production, repay previous loans or other miscellaneous operating costs.
If your company or invention needs help covering research and development to go from experiment to working prototype, or from prototype to commercialization, you could be a good solution. It doesn't matter if it's software or hardware, your first product or your tenth, as long as you are a small, own-owned, US-based business building new technology that needs money to get started.
A second lesser-known benefit of the program is that if you are selected, your company is eligible to skip the line for some public procurement processes that would otherwise require competitive bids. If you envision the US government as a potential customer down the road, this benefit alone might be worth it.
The program is generally divided into phases, which you will probably want to do in order.
Phase I. it's for people demonstrating proof of concept, anywhere on the line, from the whiteboard to the prototype. Awards range from tens of thousands to over $ 200,000, for a period of six to 12 months, depending on what's warranted for specific development costs.
Phase II it is for those who do more in-depth research and development on a proven concept and can be over a million dollars over a two year period; as you can see, this is a long-term game, not a quick cash grab.
Phase III This is where a project can switch to actually paid contracts and purchases, but you can worry about that when you get there.
In other words, while money has little catch once it is obtained, the program is not a free program for everyone. If it sounds like a match and you're willing to do some leg work, go ahead.
Step 2: figure out where to apply
Here's where it starts to get complicated. In reality there is not a single SBIR program, there are a dozen of them, distributed in as many federal agencies, from Defense and Energy to NASA and NOAA. Each has their own budget and application process, making it already complex enough that many grant seekers have quit (or closed this tab) right away. But don't worry, it's not as bad as it sounds. You have three things for you to do.
First, not all technologies or businesses are suitable for every agency.
This is actually a good thing. Think about who the "customer" for your technology is: your rocket engine won't be of much use to health and human services; a collision avoidance system for a drone could be useful for the Department of Defense, but it could also be useful for the Department of Energy in a different way. What particularly your technology is enabled and why it would be useful for the job of particularly Agency? This should help narrow the field considerably, but don't be afraid to think a little outside the box. You may be surprised at what some of these departments do.
Second, each agency has the specific things they are looking for, both now and perpetually.This means there isn't much in the way of guesswork. These many and varied "solicitations" range from areas of general interest to very detailed requests, are publicly listed (see links below) and can generally be searched or sorted by subject. Once you have decided that your technology might be useful to the EPA or NOAA, for example, look through their solicitations - they are updated regularly, although the schedule varies by agency - and see if one is already asking for what. you're bidding or using similar keywords. You can and should also search in previous years to see if they have requested something similar to your technology in the past.
Third, there are people whose job it is to help companies in this process.
Procurement Technical Assistance Centers, or PTACs, exist in every state, as well as DC, Guam, and Puerto Rico. These are equipped with people whose job it is to help small businesses overcome the complexities of state grant programs. You can find your local office by selecting it from the list here.
However, PTACs are more contract-focused, and for these awards you may want to seek out your local Small Business Development Center instead. These SBA-funded organizations are here to help too, and there are several in most cities and nearby (select them in the dropdown here and hit search).
While each program has its own requirements and solicitations, they are all public. Here are the agencies with active SBIR programs, starting with the largest, with links to their starting pages for SBIR candidates. The second link is to their solicitations page (although it may use different terminology), which it should list or link itself to current topics of interest.
The current stresses are also listed centrally here in a different format. Please note that these addresses may at any time be made obsolete, as the government does not have a standard format for these programs or websites. Even the promotional material that was given to me directly by the SBIR officials was already out of date. But a little bit of hunting around should get you to the right place. (And feel free to tell us in the comments if something is wrong.)
Some programs are more similar than others, but there are a couple of notable exceptions. The NSF, for example, has more open solicitations for basic research rather than development. But NASA and Defense are certainly the most complicated.
NASA's SBIR program is split between its various research centers - Ames, Goddard, etc. - each of which specializes in different technologies. Although the specs are too many and varied to list here, a good way to start is to look at a list of recent awards for technologies similar or related to yours and find which center is the main one for it - for example robotic sampling is led by JPL, but the propulsion of small satellites is at Glenn. Then you can contact the SBIR contact for that center.
NASA also has a particularly robust Phase II program, with extended and expanded options for space work that necessarily takes more time or costs more.
The defense has numerous grant programs under different umbrellas, including every branch of the military. To be honest, it's kind of a mess, but they're working to simplify and speed up the process. The current DoD SBIR program, however, overlaps the others more and as such should be considered alongside them. You could rely on your PTAC or SBA representative to lead the way.
Others will have their own idiosyncrasies, but starting seems similar for all of them.
Step 3: documents
Once you have decided to apply, we recommend that you register on SBIR.gov first - you must first log into the system in order to participate in the process.
SBIR officials I spoke to pointed out that while understanding the program and finding the right agency or agencies to undergo are important steps, it all falls apart if you phone in the actual application - something they have seen over and over again, a apparently.
Applications differ from agency to agency and different topics require different information, of course. But in all of them you should be ready to articulate at least the following:
- Detailed but concise explanation of the technology you are developing
- Corporate budget, financial data and investors
- Commercial applications and plan to make them happen
While the questions may only contain a dozen pages, companies should budget at least 80 full-time hours to complete them. For companies with little experience with this sort of thing, hiring a professional scholarship writer is a perfectly viable option, but it's not in demand at all. This is also something PTAC and SBDC can help with.
It's important, officials said, not to focus only on selling the technology or the science itself - it also needs to show that there is a viable path for the team and the company that government funding will allow. They might not want much in return, but they would like some security that they aren't throwing money down a well.
There's nothing stopping you from applying to multiple programs, although keep in mind that you probably won't be able to copy and paste your application from one to another. You can also apply year after year or quarter after quarter, if you wish, or for multiple solicitations within the same agency. It is not uncommon for a company to be accepted only after multiple attempts.
Finally, if you have any questions about this, find and contact the SBIR representative of the agency you are applying for. These people are there to collaborate and connect you with the right resources, so please don't hesitate to contact us. Just don't try to launch them directly - it won't work.
As you can see, applying for SBIR is not a simple process, but if you know the basic steps and resources, you can anticipate the hard work while your project is still at an early stage. And while it may seem like a lot of screening is being done, remember that there really is a lot of money in these programs and the whole point is to support small American businesses. It is you!
