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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

Determine the eligibility of your business for SBIR/STTR.

Your business must. . .

  1. Be a small business, organized for-profit, and be US-based.
  2. Have a limited number of employees (< 500).
  3. Have majority ownership by US citizens or permanent resident aliens, be independently operated, and meet other eligibility criteria.
  4. Spend the money in the United States.

Complete several business registrations.

  1. System for Award Management (SAM). The Unique Entity Identifier (UEI) number is also obtained during SAM registration.
  2. Grants.gov.
  3. Electronic Research Administration (eRA) Commons.
  4. Small Business Administration (SBA) Company Registry.
    (See Registrations in this game for details on these registrations.)

Identify the best NIH Institute for your proposal and identify who to contact.

  • Use the searchable database NIH RePorter/Matchmaker to identify agencies or institutes that fund research similar to yours.
  • Look for SBIR grant opportunities in the NIH’s omnibus solicitation on the NIH website. Read descriptions of each funding agency’s programs and research topics. Learn their interests and who to contact.
  • Learn proposal deadlines for the institute you selected. The NIH has three standard grant proposal submission/review cycles per year, currently September, January, and April. The NSF accepts proposals any time. Check dates for other agencies, which also differ.
  • Contact the agency or institute’s representative early to ask if your idea fits with their mission and current goals. Send a brief email with your grant proposal’s specific aims (NIH) or an executive summary (NSF).
Tips
  • Find the agencies offering SBIR/STTR funding that have a mission and goals aligned with your research.
  • When applying for an SBIR or STTR grant, build a relationship with your program officer. They are there to help you!
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Challenge:

Small Business Innovative Research (SBIR) Grant Numbers Challenge (Take a guess if you don’t know)

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Help with Writing an SBIR/STTR Grant Proposal

Several government programs are designed to help you write proposals or develop the commercial potential of your business, such as the Applicant Assistance Program (AAP) and Technical and Business Assistance (TABA).

  • Applicant Assistance Program (AAP) – The AAP helps new investigators in underrepresented groups (women, minorities, and people from certain regions) write and submit Phase I SBIR/STTR grant proposals. It provides coaching and guidance on application needs assessment, preparation, and review.
  • Technical and Business Assistance (TABA) – For investigators already having at least a Phase I SBIR award, TABA provides a needs assessment and commercialization report. TABA funding may also support commercialization needs, such as market research or regulatory or manufacturing planning, during or after Phase II.

Parts of an SBIR/STTR Grant Proposal

Expand the descriptions of the proposal sections to learn more.

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.

A brief statement of the significance and innovation of the project followed by a list of several main objectives. Limit: 1 page.

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.

Describe the physical facilities where you will conduct the research and the equipment you have available.

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.

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.

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.
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Tips and Resources on Proposal Writing

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Registrations Required for Government Funding

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