One of The best kept secrets in the world of capital are that the federal government has billions of dollars that it is dying to give away to early stage founders and inventors – and all you have to do is ask. Well, there's a little more to it than that. Here is a guide on how to get started on the extensive small business innovation research program.
As a background first, SBIR is a large network of programs spread across a dozen federal agencies and the military that was set up about 40 years ago to help any American with a great idea but little access to capital.
Over time, it has grown to impressive proportions, with a total budget of nearly $ 3.3 billion in 2019. To be clear, it is money that is essentially meant to be given away to qualified recipients rather than as Royalty, purchase orders, or equity. These cash prizes, which range from hundreds of thousands to over a million dollars, come with remarkably few conditions.
That said, it's not like you just reach into the SBIR cookie jar and pull out a million dollars. As with anything concerning the federal government, there is a process – and not a short or simple one. There are extensive official tutorials for later, but this article (informed by tips from officials in the program) is designed to help you get started.
It should be noted that this is nowhere near the only government funding program related to technology, but it is the largest, most comprehensive, and arguably the most accessible to small business owners and inventors like you – or it will be once you read this . Just be ready to do a little work.
Step 1: check yourself out
The first thing you should know is that the SBIR program is aimed at a specific (if not uncommon) type of entrepreneur: someone who needs money to develop and commercialize a new technology or intellectual property, but is not yet at the stage to attract traditional investments and the risk or cost is too high for an ordinary loan.
SBIR rewards (some agencies offer “grants”, others “contracts” but you can just say “rewards”) are basically cash to take something from idea to commercialization. They are not used to make down payments for the production, the repayment of previous loans or other other operating costs.
If your business or invention needs help covering R&D to go from experiment to working prototype or from prototype to commercialization, you might be a good choice. It doesn't matter if it's software or hardware, your first product or your 10th product – as long as you own a US-based small business and are developing new technology that will take some money to get started.
A second, lesser-known benefit of the program is that once selected, your company will be eligible to skip the line for some public procurement processes that would otherwise require competitive bids. If you think of the US government as a potential customer, this benefit alone might be worth your while.
The program is generally divided into phases that you will likely want to complete in the correct order.
Phase I. is for people who demonstrate proof of concept – everywhere on the line from whiteboards to prototypes. Prices range from tens of thousands to over $ 200,000 over a six to twelve month period, depending on what is warranted for the specific development costs.
Phase II is for those who are deeply involved in research and development based on a proven concept and who can make more than a million dollars over a period of two years; As you can see this is a long term game, not a quick cash robbery.
Phase III This is where a project can move on to actual paid contracts and purchases – but you can worry about that when you get there.
In other words, while the money has few catches once you receive it, the program isn't free for everyone. If it sounds like a match and you're ready to put in a little footwork, go ahead.
Step 2: find out where to apply
This is where things get complicated. There's not just one SBIR program, there's a dozen spread across so many federal agencies, from Defense and Energy to NASA and NOAA. Each has its own budget and application process. This is already so complex that many grant seekers immediately bounced off it (or closed this tab). But don't worry, it's not as bad as it sounds. You have three things in front of you.
First, not every technology or company is a good fit for every agency.
This is actually a good thing. Consider who the "customer" is for your technology: your rocket engine will not be of much use to Health and Human Services. A collision avoidance system for a drone could be good for the Department of Defense, but it could also be helpful for the Department of Energy in other ways. What exactly does your technology enable and why would it be useful for a particular agency? That should help narrow it down a lot – but don't be afraid to think a little outside the box. You will be surprised what some of these departments are up to.
Second, every agency has certain things they are looking for, both now and in the long term.
This means that there isn't much to get in the way of the guesswork. These numerous and varied “queries” range from general areas of interest to very detailed queries, are listed publicly (see the links below) and can usually be browsed or sorted by subject. Once you've decided that your technology could be useful to the EPA or NOAA, for example, review their requests for example – they are updated regularly, although the schedule differs depending on the agency – and see if you're already doing your job ask. & # 39; Offer or use similar keywords. You can and should check in the past few years to see if they have requested anything like your technology in the past.
Third, there are people whose job it is to support companies in this process.
Procurement Technical Assistance Centers (PTACs) exist in all states as well as in DC, Guam, and Puerto Rico. These are staffed with people whose job it is to help small businesses cope with the complexities of government grant programs. You can find your local office by selecting it from the list here.
However, PTACs focus more on contracts. For these awards, you may want to look up your local Small Business Development Center instead. These SBA-funded organizations are also here to help, and there are several in and around most cities (select them from the drop-down menu here and hit search).
While each program has its own requirements and requests, they are all public. Here are the agencies with active SBIR programs, starting with the largest, with links to their home pages for SBIR applicants. The second link leads to their promotional page (although different terminology may be used), where current topics of interest should be listed or linked yourself.
Current inquiries are also listed centrally in a different format. Please note that these addresses may be out of date at any time as the government does not have a standard format for these programs or websites. Even the promotional materials I received direct from SBIR officials were already out of date. But a little chasing around should get you to the right place. (And don't hesitate to let us know in the comments if anything is wrong.)
Some of the programs are more similar than others, but there are a few notable exceptions. For example, the NSF has more open inquiries for basic research than for development. But NASA and defense are definitely the most complicated.
NASA's SBIR program is divided into different research centers – Ames, Goddard, etc. – each specializing in different technologies. While the details are too numerous and varied to list here, it's a good way to read a list of recent awards for technology similar or related to yours and see which center is a leader – for example, robotic sampling is operated by JPL led, but small satellite drive is at Glenn. Then you can contact the SBIR contact for this center.
NASA also has a particularly robust Phase II program with expanded and expanded options for space-based operations that necessarily take longer or cost more money.
The defense has numerous multi-umbrella grant programs, including every branch of the military. It's kind of a mess to be honest, but they are working to make the process easier and faster. However, the actual DoD SBIR program overlaps the most with the others and should be viewed as such alongside them. You may want to rely on your PTAC or SBA representative to guide the way.
Others have their own quirks, but the first steps look similar for everyone.
Step 3: paperwork
As soon as you have decided to apply, you first want to register with SBIR.gov. You must first be included in the system in order to participate in the process.
The SBIR officials I spoke to stressed that understanding the program and finding the right agency or agencies to submit it to are important steps, but it all breaks down when you call in the actual application – something they seem to have seen over and over again.
The applications differ from agency to agency, and different topics naturally require different information. 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, finance and investors
- Commercial applications and plan to achieve them
Although applications may only be around 10 pages long, companies should allow at least 80 full-time hours to fill them out. For companies with little experience with such things, hiring a professional fellow is a perfectly valid option, but it is by no means required. This is also something that PTACs and SBDCs can help with.
According to official sources, it's important not just to focus on selling the technology or the science itself. They also need to show that there is a workable path for the team and the company to get through government funding. You may not want a lot in return, but you want peace of mind that you are not throwing money down a well.
Nothing prevents you from applying to multiple programs. Note, however, that you are unlikely to 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 inquiries within the same agency. It's not uncommon for a company to take several tries to get accepted.
If you have any questions about this, find the SBIR representative of the agency you are applying to. These people are there to contact you and connect you to the right resources. So do not hesitate to contact us. Just don't try to place them directly – it won't work.
As you can see, applying to SBIR is not an easy process. However, if you know the basic steps and resources, you can pre-download the hard work while your project is still in the early stages. And while it sounds like a lot is being won, remember that there is really a lot of money going into these programs, and the whole point is to help American small businesses. You are that!