Would You Like To Access $2.5 Billion/Year In Funding?
By Lenzie Harcum, Kristy Sundjaja, and Steven Strauss
Center for Economic Transformation
On March 17, 2011, NYCEDC will be hosting a Small Business Innovation Research (SBIR) workshop. Learn more and register for the workshop.
What is SBIR?
Eleven federal agencies, including the Department of Defense (DoD) and NIH, are obligated to contribute 2.5 percent of their annual R&D budget to fund entrepreneurs and small businesses performing research; this results in about $2.5 billion/year that can be provided to small businesses under this program. This funding is neither a loan nor an investment, but rather, a grant—with no obligation to repay and no dilution of equity.
Key points to know about the program:
- SBIR can be used for just about any industry: life science, physical sciences, information technology, or even education technology.
- Phase I award: typically provides about $100,000 for feasibility studies and proof-of-concept experimentation.
- Phase II awards: If Phase I proves successful, the company may be invited to apply for a Phase II award providing upwards of $1 million over multiple years. Phase II expands upon the initial Phase I results and further develops the concept, usually to the prototype stage. Only Phase I awardees are eligible to participate.
- By the way, a sister program known as Small Business Technology Transfer, or STTR, allows for R&D to be performed in partnership with a University or non-profit research institution.
Are you eligible?
The basic eligibility criteria are:
- The company is of small business concern located in the United States.
- The company is for-profit and employs no more than 500 employees.
- For SBIR, the principal investigator’s (PI) primary employment must be, at least, 51% with the small business during the project. For STTR, the PI may have full-time appointment with a partnering university or institution.
- The company is at least 51% American-owned and independently operated; firms with greater than 50% VC ownership are ineligible.
How do you apply and how do the federal agencies decide on awards?
Federal agencies use the SBIR program to source external brainpower to solve their most intractable problems. Each year, the agencies issue program solicitations describing the technical areas for which they are interested. The solicitations, their release and due dates, and submission instructions are available at each agency website, available at zyn.com. The SBIR proposal is your response as to how you will solve the agency’s problem.
