Funding for Innovation: The Small Business Innovation Research Program
We all know there’s no such things as free government grants (we can dream), but for startups and for-profit small businesses looking for funds to research a new technology, Small Business Innovation Research Grants are a dreamy runner-up—and worth a serious peek.
So what is the Small Business Innovation Research (SBIR) program?
Let's start with some definitions.
Many organizations seek funding to prove their idea and produce a prototype. The federal government has instituted a program, the SBIR program, to assist with these funds.
The SBIR program is a highly competitive, set-aside program that helps small businesses engage in federal R&D. Its big goals:
- increase private-sector commercialization of innovations derived from federal research and development funding
- stimulate technological innovation
- foster and encourage participation in innovation and entrepreneurship by socially and economically disadvantaged persons
Twelve federal agencies provide more than $100 million to assist in private-sector commercialization of innovations that will meet federal R&D needs. Funds are granted in phases and phase I must be successfully completed to receive phase II funding:
- Phase I provides up to $150,000 in proof-of-concepts funds for six months.
- Phase II provides up to $750,000 in R&D toward prototype development for two years.
Why should your small business consider an SBIR grant?
Through a competitive awards-based program, SBIR enables small businesses to explore their technological potential and provides the incentive to profit from its commercialization. By including qualified small businesses in the nation's R&D arena, high-tech innovation is stimulated and the United States gains entrepreneurial spirit as it meets its specific research and development needs.
To date, SBIR programs have awarded over $40 billion to research-intensive American small businesses.
How does it work?
Each agency is different, and each releases its own solicitations with varying registration requirements and funding amounts.
Once solicitations are released, a business needs to determine if they want to apply for the award. Solicitations are a one-way street: you either have an idea that will work, or you don’t. So ask yourself some basic questions:
- Is the solicitation in your area of expertise?
- Does the topic fit your business goals?
- Is this a hot area for R&D and business growth?
- What has the agency funded in the past?
Once you determine if a solicitation is right for you, make sure you study and adhere to the requirements. Overall, proposals should be 20 – 25 pages and include:
- Technical content including graphs and photos
- Cover pages
- Previous work
- Letters of support/collaboration
What do you need to do before you submit your SBIR proposal?
Some of the openings are very brief, so there are some items that need to be taken care of before searching for or beginning to prepare a proposal for solicitations. You will need to register with relevant agencies (grants.gov, sam.gov, eRA, etc.) and know your numbers (Duns, Tax ID, NAICS, etc.).
You will need to plan for 60 – 100 hours of actual writing time to prepare the proposal, depending on formal writing experience. Submit your proposal at least 25 hours before the deadline (five days in advance is better).
Selection criteria is based on several areas:
- Quality of the ideas – innovativeness, significance of the technology and ability for commercialization
- Ability to carry out the projects – qualifications of personnel, adequacy of facility and equipment and work plan
- Impact and significance – economic benefits, likelihood of marketable product
There are several advantages to the SBIR program: no loan repayment, no equity dilution, company retains IP, proven technologies are likely to have government buyers, etc. Bad news: the process is tedious and detailed. Good news: Small Business and Technology Development Center (SBTDC) at UMKC can help!
The UMKC SBTDC can assist determining if your idea is eligible, provide guidance through the process, review proposals and help connect you with key individuals.
Help, and funds, are waiting for your technology idea!
We'd never leave you without a little inspiration to get you started on the SBIR road. Mary Kay O’Connor received an SBIR grant for her startup PatientsVoices and leveraged it into further funding. Read her story—and other stories of funding—in our Entrepreneurs in Action.
Flickr image by Japanexperterna.se