One of the best kept secrets in the world of capital is that the federal government has billions of dollars it’s dying to give away to early stage founders and inventors — and all you have to do is ask. Well, there’s a bit more to it than that, so here’s a guide to getting in the door of the massive Small Business Innovation Research program.
First, as a bit of background: SBIR is a large network of programs, spread across a dozen federal agencies and the military, established some 40 years ago as a way to help out any American with a great idea but little access to capital. Over time it has grown to impressive proportions, with a total award budget in 2019 of nearly $3.3 billion. To be clear, this is money intended to be essentially given away to qualified recipients, and not as license fees, or orders, or equity; These cash awards, which range from hundreds of thousands to over a million dollars, come with remarkably few strings attached. That said, it’s not as if you just reach into the SBIR cookie jar and pull out a million bucks. As with anything involving the federal government, there’s 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) should help get you up and running. It should be noted that this is not the only tech-related government grant program by a long shot, but it is the largest, broadest, and arguably the most accessible to small business entrepreneurs and inventors like you — or it will be once you read this guide. Just be ready to put in a little work.Step 1: Check yourself
The first thing you should know is that the SBIR program operates with a specific (though not uncommon) type of entrepreneur in mind: Someone who needs money to develop and commercialize a new technology or intellectual property, but isn’t yet at the stage where they can attract traditional investment, 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 cash to bring something from idea to commercialization. They are not for footing manufacturing down payments, repaying earlier loans, or other miscellaneous operating costs. If your company or invention needs help to cover R&D to get from experiment to working prototype, or prototype to commercialization, you might be a good fit. It doesn’t matter whether it’s software or hardware, your first product or your tenth — just as long as you’re a self-owned, U.S-based small business and you’re building a new technology that needs some cash to get started. A second, lesser-known benefit of the program is that if you get selected, your company is eligible to skip the line for some government procurement processes that would otherwise require competitive offers. If you picture the U.S. Government as a potential client down the road, this benefit alone may be worth the toil. The program is generally divided into phases, which you’ll probably want to do in order. Phase I is for people demonstrating proof of concept — anywhere on the line from whiteboard to prototype. Awards range from tens of thousands to over $200,000, over a period of 6 to 12 months, depending on what is warranted for the specific development costs. Phase II is for those doing deeper R&D on a proven concept and may be more than a million dollars over a two-year period; As you can see, this is a long term play, not a quick cash grab. Phase III is where a project may transition 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 get it, the program isn’t a free-for-all. If it sounds like a match and you’re willing to do a little legwork, proceed.Step 2: Figure out where to apply
Here’s where it starts getting complicated. There isn’t actually just one SBIR program, there are a dozen, spread across as many federal agencies, from Defense and Energy to NASA and NOAA. Each has its own budget and application process — making this already complex enough that many a grant-seeker has bounced right off it (or closed this tab). But don’t worry, it’s not as bad as it sounds. You’ve got three things going for you. First, not every technology or business is a fit for every agency. This is actually a good thing. Think about who the “customer” is for your technology: Your rocket engine isn’t going to be of much use to Health and Human Services; A collision avoidance system for a drone might be good for the Defense Department, but it also might be helpful to the Department of Energy in a different way. What specifically does your tech enable, and why would it be helpful to the work of specifically one agency? That should help narrow it down considerably — but don’t be afraid to think outside the box a little. You might be surprised what some of these departments get up to. Second, each agency has specific things it’s looking for, both right now and perennially. This means there’s not much in the way of guesswork. These numerous and various “solicitations” range from general areas of interest to highly detailed requests, are listed publicly (see the links below), and can usually be searched through or sorted by topic. Once you’ve decided that your tech might be useful to either the EPA or NOAA, for example, look through their solicitations — they’re updated regularly, though the schedule differs by agency — and see if one is already asking for what you’re offering or uses similar keywords. You can and should also search through previous years to see if they’ve requested something like your tech in the past. Third, there are people whose job it is to help businesses through this process. Procurement Technical Assistance Centers, or PTACs, exist in every state, as well as D.C., Guam, and Puerto Rico. These are staffed with people whose job it is to help small businesses navigate the complexities of government grant programs. You can find your local office by selecting it from the list here. PTACs are more focused on contracts, however, and 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 in the dropdown menu here and hit search). Though each program has its own requirements and solicitations, they’re all public. Here are the agencies with active SBIR programs, starting with the largest, with links to their starting pages for SBIR applicants. The second link is to their solicitations page (though it may use different terminology), which should list or itself link to current topics of interest.- Dept of Defense (DoD): SBIR — Solicitations
- Dept of Health and Human Services/National Institutes of Health (HHS/NIH): SBIR — Solicitations
- Dept of Energy (DoE): SBIR — Solicitations
- National Science Foundation (NSF): SBIR — Solicitations
- National Air and Space Administration (NASA): SBIR — Solicitations
- Dept of Homeland Security (DHS): SBIR — Solicitations
- Dept of Education: SBIR — Solicitations
- Dept of Transportation (DoT): SBIR — Solicitations
- Dept of Agriculture (USDA): SBIR — Solicitations
- Environmental Protection Agency (EPA): SBIR — Solicitations
- National Oceanic and Atmospheric Administration (NOAA): SBIR — Solicitations
- National Institute of Standards and Technology (NIST): SBIR — Solicitations
Step 3: Paperwork
Once you’ve decided to apply, you’ll want to register at SBIR.gov first thing — you have to get in the system in the first place to be eligible for participation in the process. The SBIR officials I spoke to emphasized that while understanding the program and finding the right agency or agencies to submit to are important steps, it all falls down if you phone in the actual application — something they’ve seen over and over, apparently. The applications differ agency to agency, and different topics demand different information, naturally. But in all of them you should be ready to articulate at least the following:- Detailed but concise explanation of the technology you’re developing
- Company budget, financials, and investors
- Commercial applications and plan to achieve them