14.09.2012 Uncategorized No Comments

Grant Writing Tip #3: SBIR Funding Best Opportunity for Small Businesses

The Small Business Innovation Research (SBIR) government funding consists of R&D (research and development) money set aside for high risk, high payoff research conducted by small, for-profit businesses. SBIR government funding is $2.5 billion annually. Small Business Technology Transfer (STTR) funding is $300 million annually. In addition to R&D, the technology should be intended to be commercially deployed and have a potentially large national impact.

Eleven government agencies offer these opportunities that can be searched from the SBIR Gateway, www.zynsys.com/sbir and www.sbir.gov. Award amounts vary from agency to agency. Phase I awards can range from $150K to $220K to $450K. Phase II awards can be $1 million, $1.5 million or $3 million, depending on the topic. Typically, 1 in 6 to 1 in 12 Phase I SBIR proposals receive funding, and approximately 2 in 5 Phase II proposals win. Thirty-three (33) percent of businesses are first-time winners of Phase I funding.

If you’re planning on submitting one of these proposals, here are some helpful tips from a Webinar presented by Mark Henry, CEO of Grow Emerging Companies, LLC in Depoe Bay, Oregon, http://www.grow-ec.com/.

  • Plan ahead: You’ll need an EIN and DUNs number, and it takes 44 days to complete government registration via System for Award Management (SAM), https://www.sam.gov/portal/SAM/##11, formerly CCR (Central Contractor Registry). You’ll also need a case number at grants.gov.
  • Preparing a Phase I proposal takes from 100 to 300 hours, or 10 to 12 weeks. Your proposal must be a top fit for the agency topics. Search on Google Scholar to search papers on your topic.
  • In Phase I proposals, reviewers will want you to push the envelope for commercial impact.
  • Understand the playing field. Then write about your idea and sell it. Your proposal is a sales document. Set the stage for your innovation and quantify the problem. Get the audience interested in the problem and quantify the problem. Identify and substantiate the need. Summarize state-of-the-art technology and its shortcomings. Don’t rely on the government’s definition of technical challenges.
  • If your company doesn’t have a strong commercialization track record, make sure some of your team members, consultants, and advisers have commercialization and intellectual property experience.
  • Your proposal has to be a research project with research questions. SBIR/STTR funding is not appropriate for product development. You’ll need preliminary data; give the reviewers the confidence that your plan will work. In Phase I proposals, you need metrics to measure success.
  • Your proposal must have technical merit, innovation, and credibility … and impact is getting more attention now.
  • Focus on your idea and where you want your company to be in 3-1/2 to 5 years (average funding cycle).
  • Be smart about collaborations and teaming. Don’t work in a vacuum.
  • Add academics to your team.
  • Collaboration with academics, other firms, and national labs are allowed, but they should be considered outside costs.
  • Agency program managers will not serve as the reviewers. They don’t have control over your proposal.
  • What you may learn with one government agency SBIR proposal will not translate to another agency.
  • More than half the funding in these programs are contracts. Contracts are the government’s ideas that are reviewed by internal staff and are not as flexible as grants. (DOE is a contract agency in “grant clothing;” focus on clear responsiveness to their topics. These reviewers are a complex audience, i.e., a mix of grant and contract approaches for reviews; and they mix both internal staff and external experts.)
  • Treat the proposal as a business venture, not just a proposal. It should be a combination of something that works (involving inventors) and something that sells (involving entrepreneurs).
  • It’s never a good idea to treat the whole budget as a direct cost. The budget has to be a realistic relationship between direct and indirect funds.
  • Be careful about what you ask for in equipment.
  • These opportunities are not usually price sensitive.
  • Assign consultants an hourly rate.
  • There are 3 phases. Don’t over promise work in Phase I. This should be a proof of concept feasibility study (9 months). You must win a Phase I to get to Phase II.
  • DOE (Department of Energy) does not allow co-PIs.
  • Your principal investigator (PI) must be in the company, not somewhere else.
  • The work plan is usually from five to seven pages, not a 2-page bulleted list.
  • Prior to submission, get outside pre-reviews of your proposal and have confidentiality agreements in place.
  • USDA SBIR/STTR opps are once a year.
  • DOE opps are twice a year and possibly three.



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