The hacker’s guide to government SBIR grantsFletcher Richman
This is part three in a series of step-by-step guides to hack slow, boring processes for startups. In this post, I’ll focus on SBIR grants, one of the hidden gems in startup financing options. I’ve seen several savvy entrepreneurs receive these grants and take full advantage of them. SBIR Phase I grants can be awarded to both very early idea-stage companies, as well as smaller companies trying to develop a new product. They can be great for companies building products with high upfront development costs, allowing them to build a product before going out to raise significant dilutive capital.
The problem is that finding and applying for the right grant is a grueling process.
I’m going to walk you through the process of applying for a grant and point you towards all the links, tips, tricks, and best practices to give you a good shot at getting it, saving you hours of wandering through government websites.
Types of Grants
The two main government grant programs are STTR and SBIR. STTR grants aren’t relevant to most startups, they are focused products related to a University research project. I’ll be focusing on SBIR grants for this article. SBIR Phase I proposals may be submitted for funding up to $225,000. SBIR Phase I projects run for six to twelve months. Award notification is typically four to six months from the proposal submission deadline date.
A variety of government organizations offer SBIR grants, but the one that applies most to startups are National Science Foundation (NSF) grants.
NSF grants cover a wide range of topics: http://www.nsf.gov/eng/iip/sbir/topics.jsp, and even specifies that the program “accepts proposals in any area of technology” outside of the topics. You might be thinking, great, I can get a couple hundred grand to fund my AirBnB for Dogs! Not so fast, before you spend the time writing the proposal, the NSF has some guidelines about the types of proposals it is unlikely to fund:
“Proposed efforts directed toward systems studies; market research; commercial development of existing products or proven concepts; straightforward engineering design for packaging; laboratory evaluations not associated with the research and development process; incremental product or process improvements; evolutionary optimization of existing products; and evolutionary modifications to broaden the scope of an existing product or application are examples of project objectives that are not acceptable for SBIR/STTR.”
My understanding of this is that the NSF is looking to fund new inventions and products that currently are not available. The government is interested in moving technology forward, not incremental changes to exisiting solutions.
Criteria & Pre-Submission Feedback
Diving a little deeper into exaclty what the NSF is looking for, Proposals are based on two main criteria:
- Intellectual Merit: The potential to advance knowledge in that field.
- Broader Impacts: Potential to benefit society.
There’s also some examples of funded projects under each topic. If you’re not sure if you fit the criteria, don’t fret. There’s a quite an easy solution, just solicit pre-submission feedback.
2 months before submission deadline, you can: “Email a 1-2 page executive summary to an SBIR/STTR Program Director to help gauge whether a project meets the program’s intellectual merit and commercial impact criteria. The summary should discuss: the company and team; the market opportunity, value proposition, and customers; the technology/innovation; and the competition.”
(Might be a bit late for the ‘16 cycle but doesn’t hurt to send over).
Here’s a list of all of the program directors and their contact info: http://www.nsf.gov/eng/iip/sbir/contact.jsp.
Registration and application
If you’re feeling confident that your company could be a good fit for a grant, it’s time to start the application process. At least 1 month before: register for DUNS, Fastlane, SAM, SBIR Registry: http://www.nsf.gov/eng/iip/sbir/registration.jsp. (as of this writing we’re a little under a month from the deadline, so get moving!).
Once you’ve registered for all the systems, you need to complete the full application on Fastlane. Before doing that, it’s a good idea to have a draft of your answers to each section (don’t want a reload to kill all your answers).
Here’s a high level checklist of the parts of the application: http://nsf.gov/eng/iip/sbir/documents/PhaseI_ProposalCheckList_SBIR.pdf.
To better understand what is required, here is a full description of each section and the entire application: http://www.nsf.gov/pubs/2016/nsf16554/nsf16554.htm (June 2016 version, check to see if there is an updated one).
That program solicitation goes into excruciating detail, and some of it isn’t that important. Here’s a breakdown of each section linking out to the specifics of what you need to prepare to complete your proposal:
- Cover Sheet and Certification: State 1 topic, and 1 subtopic (chosen from the overall NSF topics).
- Project Summary ( 1 page max) – explanation of how it fits into the SBIR criteria.
- Box 1: Overview, Key Words, and Subtopic Name
- Box 2: Intellectual Merit
- Box 3: Broader/Commercial Impact
- Project Description (15 page max) – The meat of the proposal. What you are working on, who could pay for it, current state of the product, the team, and goals to be accomplished using the grant.
- Elevator Pitch (max 1 page)
- Commercial Opportunity
- The Innovation
- The Company/Team
- Technical Discussion & R&D plan (Minimum 5 pages)
- References – Works cited.
- Biographical Sketches – Basically resumes.
- Budget & Budget justification – Explanation of how you will put the funds to work, you have to prove that you need the amount requesting at that it is vital to the proposal. (Looks like they have simplified this a bit recently).
- Current and Pending Support of Principal Investigator and Senior Personnel – Description of any other grants you’ve gotten.
- Collaborators and other Affiliation – List of partners you’ve worked with.
- Facilities, Equipment and Other Resources – Resources available to you to complete the proposal
- Supplementary Documents
- Data Management plan (required)
- Letters of support for technology (good idea)
- SBA Registry Docs (required)
- Company Commercialization History (with this template)
Once you’ve got those items drafted, it’s time to go through the full process on Fastlane, the NSF’s submission tool.
Here’s a step-by-step guide on the proposal submission on Fastlane: http://www.nsf.gov/eng/iip/sbir/documents/Phase_I_Proposal_Preparation_Booklet.pdf
Final Tips & Tricks
As you’re going through writing your proposal, keep this in mind:
- Principal investigator = CEO. Needs to be full time if & when the award is received.
- The primary objective of the Phase I effort is to determine whether the innovation has sufficient technical and broader/commercial impact merit for proceeding into a Phase II project. A secondary, but still important, objective is to assess potential commercial feasibility of the proposed work. The deliverable of an SBIR/STTR Phase I 6 grant is a report of technical accomplishments that will be included as part of the Phase II proposal package in FastLane
Masschallenge did a good post on a few other tips: http://masschallenge.org/blog/9-tips-get-sbir-funding-startups-nsf
Good luck! Let me know in the comments if there is anything I missed or any questions you have, I hope to see more great companies leveraging this resource.