The US government will, under certain circumstances, send
your business some cash.
We are not referring to the websites that pop up if you Google something like “how to get free money from the
government”. You may want to stay away from those. :-)
The funding that we are referring to is from a successful
program started by the federal government over 30 years ago. It’s called "Small Business Innovation Research" (also known as SBIR) and is coordinated by
the Small Business Administration.
Under this program, the government will provide funding to
turn innovative ideas into commercial products that might help the federal
government and the economy at the same time.
The small businesses get the cash and use it to work on the innovations.
When the innovations turn into products, the businesses hire people, which
helps the economy and brings in tax dollars back to the government.
The process is pretty much as follows: Government agencies (e.g., the Department of Defense, the Department of Energy, the National Science Foundation, etc.) periodically publish topics of interest and proposal guidelines. Any small business that wishes to apply for SBIR funds must submit a proposal
under the relevant topic. The proposal
will be evaluated and either accepted or rejected.
Funding decisions are based on a number of factors,
including the proposal merit, the team and available funds (Congress determines
how much the SBIR program is allocated each year). We know of at least one funding agency that
will list the proposals they wish to fund in order of preference. They will start with the top of the list and
go all the way down until they run out of available funds. Each year, good, intriguing proposals are not funded because the agency simply did not have enough cash available.
The agencies will provide funding in two phases. Phase I
awards are typically around $100,000 and Phase II awards (which are granted to
a small percentage of Phase I awardees as follow-ons) might amount to $500,000
or sometimes as much as $1,000,000.
If you’ve never received an SBIR award, here are some tips from
those of us who have:
-- make sure you follow the proposal guidelines to the
letter; you may have the best idea in the world, but if you use an improper
font size, wrong margin widths, submit too many pages or otherwise don’t follow
the specific steps outlined by the agency, they will almost certainly exclude
your proposal (and, most likely, they won’t even read it)
-- make sure you address the topic; if the agency is asking
for innovations relating to, say, a light emitting diode, do not respond with
an idea relating to halogen. No matter
how much better you think your idea might be, chances are good that the program officer
reviewing your proposal will deem it “unresponsive” to the topic and reject it.
-- attend an SBIR conference; the agencies host SBIR
conferences periodically all around the nation. If you are serious about
getting funding for your idea, they are worth attending. You can learn about
the different agencies involved, meet and network with program officers and
learn more about the specifics of what they are looking for. We have personnel
who have attended these conferences in the past; our opinion is that they are
well worth it.
The SBIR program has been extraordinarily successful. If you
Google “SBIR success stories” you will find quite a few examples. An award can give
you a financial boost and (if your venture is a little riskier than most) a level of credibility when angel investors and VCs might otherwise be
hesitant to give you the time of day.
If you are seeking funding for an innovative idea,
we encourage you to check out the programs. Here are a two important links:
http://www.zyn.com – this popular site is called the SBIR
Gateway. It is a central source for the agencies that participate in the program
and, among other things, provides links to solicitations.
http://www.sbir.gov – the SBIR official website.
There’s a sister program of sorts called Small Business Technology Transfer, or STTR (and yes, the various government agencies are aware that the initials don’t match the name of the program, but no one seems to really care).
We've had a ton of experience with this program. We've won proposals, lost proposals, attended
the conferences and some of our staff have even served as part of review panels
for SBIR programs at government agencies.
So, feel free to contact us for help as well.
