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Seed funding is the money used to get businesses started. Seek seed funds that are non-dilutive first (funds that do not give any ownership of your business to the funding source), if you can, so as to keep enough ownership of the business’s profits to attract later investors. The Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) funding supply non-dilutive funds for many startups in the life sciences and are described in detail in the next sections. Other non-dilutive funding often used for seed funding include university seed funds, entrepreneurship competition awards, crowdfunding, and some foundations that have an interest in your product being developed.
Part I. SBIR/STTR Grants Overview and Getting Started
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Funding
Federal Seed Funding opportunities for small businesses, such as the SBIR and STTR programs, are great ways to receive seed funds. These funds for business research and development are among the largest sources of early-stage financing in the U.S. They lead to innovative commercial products by creating a basis for larger, later sources of funding. To obtain funding, scientists at small, U.S. for-profit businesses meeting specified requirements write proposals and submit them for review in a competitive process.
- SBIR/STTR money is not a loan. No repayment is required.
- The government has 0% equity in your business, so you still own 100% of your company (Non-Dilutive Funding).
The National Institute of Health (NIH) and the National Science Foundation (NSF) provide most of the life sciences and biomedical funding. Other agencies also provide some SBIR/STTR funding to biotech/biomedical companies to meet specific interests, including the Department of Defense (DOD), the Environmental Protection Agency (EPA), and the Biological Advanced Research and Development Authority (BARDA).
Preparing to Write an SBIR Grant Proposal
Determine the eligibility of your business for SBIR/STTR.show more
- Be a small business concern, organized for-profit and U.S. based.
- Have a limited number of employees, no more than 500 including affiliates.
- Owned in majority >50%) by U.S. individuals and independently operated or several other options involving other businesses or companies. (See the Eligibility Criteria)
- Spend the money in the U.S.
Check to make sure all of your business registrations needed for SBIRs are completed.show more
- System for Award Management (SAM). The Unique Entity Identifier (UEI) number is also obtained during SAM registration.
- Electronic Research Administration (eRA) Commons
- Small Business Administration (SBA) Company Registry
(See Registrations in this game for details on these registrations)
- Use the searchable database NIH RePorter/Matchmaker to identify agencies/institutes that fund research similar to yours.
- Look for grant opportunities in the Omnibus Solicitation of the NIH for SBIR Grant Proposals on the NIH website. Read descriptions of each funding agency’s programs and research topics. Learn their interests and who to contact.
Contact an NIH or NSF representative early to ask if they think your idea fits with their agency’s mission and current goals, by sending a brief email with your grant proposal’s Specific Aims (NIH) or an executive summary (NSF).
Consider utilizing one of the government programs designed to help you write a proposal 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) – helps small businesses headed by new investigators in under-represented groups (women, minorities, and certain regions) write and submit Phase I SBIR/STTR grant proposals providing 10 weeks of coaching and guidance on application needs assessment, preparation, and review. AAP in 2022 is offered by 8 NIH institutes.
- Technical and Business Assistance (TABA) – For investigators already having at least a Phase I SBIR award, TABA provides a needs assessment and commercialization report. Later TABA funding may be requested to support commercialization needs, such as market research or regulatory or manufacturing planning.
Small Business Innovative Research (SBIR) Grant Numbers Challenge (Take a guess if you don’t know)