For startups pursuing non-dilutive funding, the SBIR/STTR programs offer a critical pathway to advance research and development while preserving ownership. However, preparing a successful application requires more than just a great idea—it demands strategic planning, strong documentation, and compliance with federal guidelines. Here’s a roadmap outlining the key steps every startup should take before applying to the SBIR/STTR program.
Step 1: Understand the Program Structure
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are phased funding initiatives:
- Phase I: Focuses on proving the feasibility of the proposed concept, with funding amounts typically ranging from $50,000 to $275,000 for 6–12 months.
Thinking about including human subjects in a 6-month project? Perhaps reconsider. While it is technically allowed, doing so is a huge red flag for reviewers who typically see this as overambitious. Among our awarded clients, 100% of Phase I awardees have focused on feasibility and saved human subjects work for Phase II.
- Phase II: Builds on Phase I results by expanding R&D efforts and creating a market-ready prototype, with awards often exceeding $1 million.
- Phase III: Focuses on commercialization, though funding in this phase generally comes from private or non-SBIR/STTR federal sources.
Understanding the phases helps you plan your long-term funding strategy.
Step 2: Research Agency Priorities
Each participating agency has its own priorities and funding areas. It’s essential to:
- Review agency missions and research topics.
- Study past solicitations and funded projects to identify trends.
- Tailor your proposal to align with the agency’s goals and problem areas.
Identifying the right agency and funding opportunity ensures your project resonates with reviewers.
Step 3: Verify Eligibility Requirements
Before applying, confirm that your business meets the eligibility criteria:
- Must be a for-profit small business with 500 or fewer employees.
- Majority ownership must be held by U.S. citizens or permanent residents.
- For STTR, you must partner with a nonprofit research institution.
Ensure your team and organizational structure align with these requirements to avoid disqualification.
Step 4: Build a Strong Team
Your application should demonstrate that your team has the expertise to execute the proposed project. Highlight key roles such as:
- Principal Investigator (PI): Responsible for the technical direction of the project.
- Business Lead: Manages commercialization plans and stakeholder engagement.
- Research Partners: Collaborators who bring specialized expertise or resources.
Consider filling any gaps in technical or business expertise by forming partnerships or hiring consultants.
Step 5: Conduct Customer Discovery
Customer discovery is crucial for validating your innovation’s market potential and ensuring your solution addresses a real need. Engage with potential users and stakeholders to:
- Identify pain points and unmet needs.
- Gather feedback on your proposed solution.
- Strengthen your commercialization plan with data-driven insights.
Step 6: Develop a Detailed Research Plan
A successful SBIR/STTR proposal includes a clear and well-organized research plan that outlines:
- Objectives: What you aim to achieve.
- Methods: How you will conduct your research.
- Milestones: Key progress indicators and timelines.
Ensure your technical approach is feasible and addresses potential risks.
Step 7: Craft a Comprehensive Commercialization Strategy
The commercialization plan demonstrates how your innovation will transition from research to market. Include:
- A target market analysis.
- Go-to-market strategies and partnerships.
- Financial projections that illustrate revenue potential.
This section is critical in Phase II applications, as agencies want to see a clear path to market success.
Step 8: Prepare a Detailed Budget
Your budget should provide a transparent breakdown of costs and demonstrate efficient use of funds. Include justifications for:
- Personnel salaries and fringe benefits.
- Equipment and materials.
- Travel expenses, if relevant.
Adhering to agency-specific budget guidelines ensures compliance and credibility.
Step 9: Register and Complete Administrative Requirements
The application process involves multiple registrations:
- SAM.gov: Register your business for federal contracting.
- Grants.gov: Submit applications for most federal agencies.
- eRA Commons or specific portals: Required for agencies like NIH or NSF.
These registrations can take time, so start early to avoid delays.
Step 10: Review and Refine Your Proposal
Before submission, conduct a thorough review of your proposal to:
- Ensure alignment with the solicitation requirements.
- Address any reviewer comments, if resubmitting.
- Check for clarity, consistency, and formatting.
Having an external reviewer read your application can provide valuable feedback.
Positioning Your Startup for Success
Preparing a competitive SBIR/STTR proposal requires a comprehensive approach that balances technical excellence with a compelling commercialization plan. By following this roadmap, startups can navigate the application process with confidence and increase their chances of securing funding.
At E.B. Howard Consulting, we support startups in developing strong, data-driven SBIR/STTR proposals that align with program requirements and agency priorities. If you’re ready to embark on your SBIR/STTR journey, contact us to collaborate on a winning strategy that positions your innovation for success.
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We assist our clients in locating, applying for, and evaluating the outcomes of non-dilutive grant funding. We believe non-dilutive funding is a crucial tool for mitigating investment risks, and we are dedicated to guiding our clients through the entire process—from identifying the most suitable opportunities to submitting and managing grant applications.