SBIR/STTR Grants
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Seed funding gets businesses started by financing product development, market research, and business formation. Seed funds that are non-dilutive (do not give any ownership of your business to the funding source) are very attractive because you get to keep ownership of your business and its profits. This also helps attract investors later.
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding supply non-dilutive funds for many startups in the life sciences. Other non-dilutive seed funding sources include university seed funds, entrepreneurship competition awards, crowdfunding, and some foundations interested in your product or service.
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Funding
The SBIR and STTR programs are among the largest sources of early-stage financing for small businesses in the US and lead to innovative commercial products and services. To obtain funding, scientists at eligible small, US, for-profit businesses write proposals and submit them for review in a competitive process.
- SBIR/STTR money is not a loan, so you do not have to pay it back.
- Unlike most other funding, the government does not gain equity in your business, so you will still own 100% of your company.
- You can write the proposal with co-investigators.
- You can include an appropriate salary for yourself in the proposal.
The National Institutes of Health (NIH) and the National Science Foundation (NSF) provide most life sciences and biomedical funding. Other agencies providing some SBIR/STTR funding include the Department of Defense (DOD), the Environmental Protection Agency (EPA), and the Biological Advanced Research and Development Authority (BARDA).
Reference
NIH. SEED – Helping Innovators turn discovery into health. SEED. 2023.
Preparing to Write an SBIR Grant Proposal
Challenge:
Small Business Innovative Research (SBIR) Grant Numbers Challenge (Take a guess if you don’t know)
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Parts of an SBIR/STTR Grant Proposal
Expand the descriptions of the proposal sections to learn more.
Abstract
A summary of the project that includes a brief, simplified description of the significance, relevance to the institute’s mission, innovation, aims, and long-term objectives. Limit: 30 lines of text.
Specific Aims
A brief statement of the significance and innovation of the project followed by a list of several main objectives. Limit: 1 page.
Research Strategy
A more detailed description of the significance of the research, innovation, and your approach to conducting the research. Limit: 6 pages for Phase I, 12 pages for Phase II.
Facilities and Equipment
Describe the physical facilities where you will conduct the research and the equipment you have available.
Human Subjects or Animal Subjects
If your research includes human or animal subjects, describe the plans in detail and the status of your application to the institutional review board that governs your research. The review and approval process can take several months.
Other
Biosketches – Follow a specific NIH format, which includes a personal statement of why you are suited for your role in the project. Limit: 5 pages.
Letters of Support – These should be from potential customers and scientists who can describe the need, importance of the innovation, or likelihood of success.
Subcontractors and Consultants – Who will help complete the project?
Budget – Allow plenty of time to complete this.
Commercialization Plan
This section is included in Phase II proposals and describes the proposed product’s or service’s market potential, including market and competition, the strategy for commercializing the product or service, how you will generate revenue, and the resources needed. Limit: 12 pages. Phase I recipients can apply for a program called Innovation Corps (I-Corps), which is a seven- to eight-week training in entrepreneurship that helps a business prepare for commercialization.
You Finished Your Grant Proposal. What Happens Next?
Submit your proposal electronically on time using. . .
- The Application Submission System & Interface for Submission Tracking (ASSIST) program found on the NIH’s online portal, the Electronic Research Administration or eRA Commons.
- The FastLane System found on the NSF’s Research.gov, or Grants.gov.
Proposal Review – The scientific review takes around two months. At the NIH, your proposal is assigned to a scientific review group, composed of NIH staff and non-NIH scientists. Three group members comment on and score each part of the proposal separately and the proposal overall. The best possible score is 1, and the worst is 9. Only the top-scoring proposals are discussed and scored by the whole group. The reviewers’ comments and scores are combined in a summary statement, which is sent to you.
Impact Score and Funding Process – Your proposal is given an overall “impact” or “priority” score, which is the average rating by the members of the scientific review group times 10. The lower your score, the better. Scores of 10 to 30 have the best chance of being funded. Scores over 45 are rarely funded.
A council meets around a month later to determine which proposals to fund. They consider the impact score along with their institute’s mission, current interests, and funding of similar projects.
Consider Resubmitting If Not Funded – Review your summary statement and talk with your program official to determine whether resubmitting seems indicated. Ask if they have any further advice.
Review sample summary statements available on some NIH institute websites to learn how other businesses were able to address reviewers’ concerns, resubmit, and obtain funding. For example, the NIA offers examples of proposals and summary statements.
References
NIH. How to Apply | Seed. SEED. 2023.
NIH. SEED – Helping Innovators turn discovery into health. SEED. 2023.
Tips
- The NIH’s SEED website describes all aspects of SBIRs/STTRs, including how to apply, and offers webinars on proposal writing. America’s Seed Fund is the NSF’s website.
- Ask a support person to read your proposal drafts.
- Budget limits in May 2023 allowed up to $295,924 for Phase I and $1,972,828 for Phase II. It is expected and acceptable to ask for enough.