Understanding the SBIR Program

The SBIR program is a funding opportunity to develop and commercialize your startup's new technology. This installment of our deep dive on the SBIR and STTR programs is about the application process and some insights on successful applications.

The Small Business Innovation and Research program is a federal government program supporting tech innovation by providing funding for small businesses and startups. Eleven federal agencies administer this program. Read the last post in this series to learn more.

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Eligibility Requirements

Your first step is confirming eligibility. Your business needs to meet minimum SBIR-eligibility requirements, including:

• For profit
• US owned/operated and majority controlled by a US citizen (or citizens)
• Focused on performing R&D – not purchasing equipment, commercializing a technology that has already been developed, or one that has very low risk and only needs capital
• Staffed by under 500 employees, including affiliates

Every applicant must designate a Principle Investigator (PI) who will be primarily responsible for the project throughout the program. The PI, a single individual, must be "primarily employed" by the applicant small business during the award period. Agencies differ on what "primarily employed" means. Some agencies have more stringent requirements, but all of them require that the PI cannot be fully employed elsewhere.

It's highly important to check the agency's solicitation that you are applying to so that your firm meets all the eligibility requirements. For example, there may be additional eligibility requirements for Venture-backed applicants: a VC-backed applicant may be eligible if no VC, hedge fund, or private equity firm is a majority stockholder.

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Common Application Mistakes to Avoid

You confirmed that you are eligible, and you are ready to submit a proposal. Here are some common places your application may be vulnerable to rejection:

1. You haven't satisfied all the formalities. The solicitations that agencies post include detailed instructions and requirements for the application. One of the most common reasons that proposals get thrown out is from not including all the components or right documents. Make sure to check these requirements throughout the writing and editing process.
2. You did not spend enough time editing. Editing for content, clarity, grammar, and word choice are often overlooked. Poor writing can ruin a great proposal if the bottom line is unclear and difficult for the reader to understand. As a rule of thumb, you should spend at least 25% of the time editing the proposal.
3. You are not checking for TABA requirements. Technical and Business Assistance (TABA) allows agencies to help their SBIR awardees by funding vendors to support commercialization or by providing direct funding so that they can contract with vendors and consultants for commercialization. Not every agency has TABA and different agencies vary in whether you have to apply within your proposal, during the award period, or at some other time. The individual solicitations will describe instructions for TABA and also any information needed about the vendors that an awardee wants funding for. TABA is an opportunity for you to earn up to an additional $6,500 in Phase I, so be sure to read the solicitation to see if you have to apply separately.

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Strategic Tips for Success

Here are other important considerations:

1. Choose your subject matter strategically by reading Funding Opportunity Announcements for clues about current topics, checking past awards, and reviewing program sites for participating agencies.
2. Comply with all formalities including obtaining an EIN, D-U-N-S number, SAM registration, and Small Business Administration Company Registration. Note that while these registrations are free, they may take weeks to process.
3. Monitor the solicitations calendar carefully to learn when each agency's SBIR cycle begins and key deadlines. Open solicitations are available online at https://www.sbir.gov/solicitations/open.
4. Review special application rules in the solicitation, including "Proposal Preparation Instructions," "Application and Submission guidance," and "Evaluation criteria." Following these special rules increases your proposal's chances of surviving the administrative review process.

Sources:

https://www.sbir.gov/tutorials/registration-requirements/tutorial-1

https://www.sbir.gov/tutorials/program-basics/tutorial-2

https://www.sbir.gov/funding