SBIR Grants

Attended a session today on Federal SBIR (Small Business Innovation Research) grants held by the VT Technology Council, et al.
Key links: Web Resources
These are research and development grants, not loans. 10 federal agencies are required to set aside 2.5% of their research budgets for SBIR use. That’s a lot of money available on a competative basis. Agriculture, Commerce, Defense, Education, Energy, Health & Human Services, Transportation, EPA, NASA, National Science Foundation. Money must be used for research, not commercialization, scale-up or marketing. You can outsource up to 50% of the funds to sub-contractors and consultants.
Applicant must be a for-profit business with less than 500 employees and min 51% US owned. Sole props, corps, partnerships all welcome.
Phase I grants are for feasability studies and are typically $70K to $100K for a six month project. Approx 10% of applicants get Phase I grants. If you know how to write a good proposal and carefully target your efforts you can hit 20-40% success rate. Over 60% of Phase I recipients have fewer than 25 employees.
Phase II grants (the real R&D) are typcially up to $750K for a two year project. About 40% of Phase I recipients are granted Phase II grants.
From 1984-2003, 49 VT businesses were awarded 144 Phase I grants and 52 Phase II grants, worth nearly $36MM. That’s a lot of money flowing into a small economy like VT.
Basic process is that you are reviewing (via the website) Pre-Solicitation Announcements and trying to find a strategic fit between your long-term research interests and what the gov’t agencies are looking to fund. Call the agency SBIR program manager and talk about your interests. They are helpful, friendly, and answer their own phones (mostly). Sometimes if they like your idea they will write a PSA based on it.
You write a ~25 page proposal, including detailed budget and work plan. There is a technical review and an administrative review. Follow the admin rules carefully. Review successful grant apps online to see what worked in the past.
It takes 4-5 months to find out if your app was accepted. Some agencies have deadlines every four months, some only annually. This is not a short-term funding solution.
They do fund grants for social programs, including such things as rural economic development, educational initiatives, etc. Lots of grassroots potential here if you have the attention span and ability to tell a tale in words. You don’t have to be a business to apply for the grants, but have to become a business before they disburse funds. Moonlighters welcome.