How To Win An SBIR Grant for Your Tech Startup Idea

Last updated on Jan 8 2021, by Hong Zhuang Reading Time:7 min

You know you have a great tech startup idea, but is an SBIR grant right for it?

The answer depends on three factors:

your startup eligibility
your startup goals
SBIR funding Agency’s mission and priorities

First, is your startup eligible?

Since the SBIR grants use eligibility to filter grant applicants, for the bureaucratic government to bend the rules in your case can be as hard as moving a mountain.

What are the SBIR eligibility requirements?

must be for-profit and the U.S. owned and operated company
can complete all grant-related work in the U.S.
has the ability to performing R&D – not commercializing a technology that has already been developed (i.e., you have a product)

Since each grant solicitation can have additional eligibility requirements, we recommend checking the Eligibility Information section before applying it.

However, an unwritten law states that startups less than one year are unlikely to win a grant because of a lack of credibility.

In general, a grant process can take at least six months to 1 year; you can’t solely wait for this option to turn your idea into reality. We recommend reading our other blog to learn more funding options.

The entire purpose of this blog is to help you:

Determine if you should pursue an SBIR grant based on other two factors;
Select the most suitable SBIR grant for your tech startup (hardware company or software company or hardware and software company) if you decide to apply;
Write a winning proposal to increase your odds of winning the grant award you deserve.

Table of Content

SBIR Grants At Glance

Before discovering whether SBIR grants can be your funding source, you should briefly understand SBIR grant programs.

Select a Right SBIR Grant Funding Programs

The twelve federal agencies contribute to the SBIR funding programs, including:

Department of Defense (DoD)
Department of Health and Human Services (HHS), including the National Institutes of Health (NIH)
Department of Energy (DOE), including Advanced Research Projects Agency-Energy (ARPA-E)
National Science Foundation (NSF)
National Aeronautics and Space Administration (NASA)
U.S. Department of Agriculture (USDA)
Department of Homeland Security (DHS)
Department of Commerce: National Oceanic and Atmospheric Administration (NOAA)
Department of Education (E.D.)
Department of Transportation (DOT)
Department of Commerce: National Institute of Standards and Technology (NIST)
Environmental Protection Agency (EPA)

To maximize your chance of winning a grant, you need to focus on the funding agency targeting the industry where your idea aims.

SBIR Grant Type For Your Startup Idea

There are two types of fundings: contract and grant. The table below lists the differences:

As you can see, contracts are inflexible; you have to adjust your idea to fit their requirements. Imagine that there’s a pair of shoes, the probability of you fitting will be slim.

Having a tech startup idea, you should seek grants from granting agencies such as NSF, or DoE, or USDA, or NIST, or NOAA, or HHS. You will have a better chance to win a grant award if,

Your startup idea aligns with an Agency’s mission, and your expertise
your idea is among the priorities of an Agency.

The Grant Process Timeline

The process consists of three phases, as shown in the table below:

	Steps in a Process	Timeline
pre-award phase	1) Grant funding opportunity announcement 2) Completing a grant application 3) Reviewing applications and deciding the winner	Up to 1 year
award phase	Grant funding award announcement
post-award phase	Award recipients complete an award project report their results	6-12 months

Is a Grant Right for Your Startup Goals?

You should check if grants can fuel your startup’s three main goals by answering the following three questions.

What Is Your Vision For Your Startup?

Since you seek funding to fuel your dream, you should only apply for the SBIR grants if they align with your vision.

How do you find it out?

You can follow the steps below to get the conclusion by researching the awarded grants:

Go to https://www.sbir.gov/sbirsearch/topic/past/.
Under Agency, check the box next to the agency that matches your industry.
Under Phase, check the phase I box.
Under Year, check the box next to last year (e.g., 2021)
Under Program, check SBIR box
You will see a list of awarded grants.
Click each one, you can read the proposal and determine if the SBIR grants align with your vision.

What is Your Funding Goal?

Government grants generally are divided into two phases. It covers six months – 1 year with $50,000 – 250,000 in Phase I and 24 months with $500,000 – 1.5.million in Phase II. But you should only consider Phase I because Phase II awards most likely go to the recipients of Phase I.

Thus, if you need more than $250,000, you should consider other financial options.

How Competitive is Your Market?

The most significant disadvantages of grants are a slim chance to get and long and slow application process. If your market research showed your idea for a competitive market, you should avoid grants and seek other financing options because your competitors will dominate the market by then.

Dose Your Idea Align with SBIR Funding Agency’s Mission and Priorities ?

Completing a grant application requires a big commitment, including:

one to two months to study grants, talk to grant program managers, develop a winning strategy, and build a winning team.
writing an SBIR proposal can take between 150 and 450 hours.

Upon your research on awarded grants, you should know if your

has similar characteristics in both research and technical innovation with awarded projects.
your idea is among your Agency’s priorities align with Agency’s mission.

If your answer is No, the SBIR grants will not fund your idea, no matter how great it is.

How to Prepare for Your Grant Proposal

Preparation will take 1-3 months. Its purpose is to build compelling qualifications for your startup team.

Identify your potential grant opportunity

First, you find your prospective grants on Open | SBIR.gov using one of the following filters:

By OPEN: you can see all grant opportunities that are open to public
By Agency: use this filter if you have a preferred Agency.
By Phase: select Phase I since the Phase II awards usually go to Phase I recipients.
By Program: select SBIR because STTR is for technology transferring.
By year: you can choose any year as your preference.
BY keyword search: using technology as a keyword, you can find all grants that require feasibility research of the technology (e.g., A.I. or Blockchain)

After applying a filter, you will see a list of your prospective grants with a brief description. You need to check the application deadline and only select those at least five months ahead because you leave plenty of time preparing and writing the grant proposal.

Second, by clicking each grant link, you will go to a page that gives the link to the grant detail page.

Third, once you are on the grant detail page, you will see a link of instructions and topics in either pdf or Microsoft doc format.

Lastly, on the doc page, you should view,

phase I proposal guidelines: checking if you are a good fit
award and contract information: confirming if the prize awarded matches your funding goal.

By reading the above content, you can determine whether to pursue the grant opportunity.

Registering to Apply

You have to register an account with Grants.gov early before applying for any grant because the process can take up to three weeks.

The video below shows you how to register your account with grants.gov step by step.

How to Register to Apply for an SBIR Grant

Building A Winning Team

You probably heard, “Good ideas are a dime a dozen.” Idea execution is all that matters.

Thus, grant programs prefer to award teams with an excellent principal investigator(PI) with a track record.

Then, what qualifications of an ideal P.I.?

The video below shows the qualifications of the previous grant awarded first-time P.I. who are startup founders.

Suppose your industry experience and academic profile are similar to that successful first-time P.I., congratulations because you will have better chances to win a grant.

Otherwise, you need to fill the gap by recruiting someone with one or some of the following complementary skills and credibility:

related advanced degrees to have a leg-up on credibility. A Ph.D. title will garner a certain amount of trust from the grant evaluators. The related academic research experience will impress the grant proposal evaluators.
a consultant who was a recipient of the former SBIR award in your industry
a consultant or retired entrepreneur who has turned tech ideas into successful products.

However, your hiring should be contingent (i.e., they will join your team only if you win the award.), and you will have a written agreement and submit it with your grant application.

Write a Slam-dunk Proposal

Although the probability of rejection of your proposal is very high, this section can help you write a responsive proposal that can increase your chance of winning.

Main Reasons Proposals Are Rejected

A study showed that the most common reasons for proposal rejection include:

The applicants failed to follow directions(e.g., missing sections, or wrong format, or improper proposal lengths)
The quality of writing was poor.
The proposal topic was not appropriate to the funding agency or was not an agency priority for the year(e.g., neither the technology is innovative nor your idea addresses a significant problem)
The team lacks experience and expertise.
The costs of the proposal outweigh its benefits.

Some of the above reasons are out of your control. But you can proactively avoid ones in bold.

Meeting with Your Program Offficers

Before writing your proposal, you must meet the program managers. You can find their contact info in the solicitation.

Program managers are assigned to answer award-specific questions. You want to connect and engage them because:

They are decision-makers. If you can establish a good relationship with them, they will remember and identify your application and you as an ideal P.I.,giving you an advantage over your grant competitors.
You can get their input and insights into whether your idea matches the solicitation topic so that you don’t waste time applying it.
They will help you better understand the evaluation criteria of your solicitation. The key to getting a grant award is to write a proposal that is responsive to its evaluation criteria, especially three whys:
- Innovation
- Team
- Commercialization

Innovation

Innovation is the foundation of a grant proposal.

Although all grant solicitation lists innovation as an evaluation criterion, each defines innovation differently. HHS proposal must answer, “Does the application challenge and seek to shift current research or clinical practice paradigms by utilizing novel theoretical concepts, approaches, or methodologies? ” DOE looks for proposals that “have the significance of the scientific or technical challenge.” NSF talks about “Intellectual Merit that encompasses the potential to advance knowledge.”

Luckily your solicitation and program managers will guide you on discussing innovation.

SBIR awards favor proposals with elements of research and technical innovation, and the proposal evaluators prefer to see you review the literature from a literary point of view and answers to the following questions,

why your idea is new and innovative?
how your deep knowledge of current solutions to the problem defined by your idea through convincing preliminary data
how the solution from your proposed research will clear contrast the existing or substitute solutions
what technical hurdles your R&D must overcome to commercialize the innovation successfully.
why the problem that your idea solves is vital for society?

If you don’t have an academic background, you may need to hire someone to write or co-author your proposal.

Team

Now you have built a winning team. Evaluators will spend a lot of time scrutinizing the Principal investigator (P.I.) to ensure they have the following credentials:

experience in carrying out the SBIR proposed project.
technical and research capabilities.
background in commercializing a tech idea
proper facilities and equipment in a scientific environment that contributes to success.

If your P.I. lacks one or more of the above, your team section should focus on the qualifications of the P.I. and the key team members.

Commercialization

Most grants require a proposal to discuss the grant project’s commercialization potential in a commercialization plan. However, commercialization guidelines vary from Agency to Agency.

For example, proposals for HHS must answer, “Does the proposed project have commercial potential to lead to a marketable product, process, or service? Does the Commercialization Plan demonstrate a high probability of commercialization?”

DOE requests a two-page commercialization plan to discuss: 1) market opportunity; 2) Patent potential; 3) how the team will commercialize the project. You can learn more about the commercialization plan detail at the DOE website.

NFS asks that proposals describe the Commercial Opportunity in the Project Description section, including:

Describe the market and addressable market for the innovation. Discuss the business economics and market drivers in the target industry.
How has the market opportunity been validated?
Describe your customers and your primary business model.

Therefore, you must carefully review the commercialization requirements and check if the commercialization plan is part of the technical proposal or a separate attachment.

Even though you have done market research for your ideas, you should do it again focusing on:

responding to the grant requirements.
showing why and how you can commercialize your tech idea.

Other Criteria

Each grant solicitation has additional evaluation criteria. We suggest you read them carefully and address them thoroughly within your proposal as well.

The Quality of Writing

No matter how innovative your idea, grant evaluators will rate your application low if your proposal is difficult to read and follow. To create a well-written and easy-to-read proposal, you need to

Avoid jargon. Jargon can be meaningless to your grant reviewers and cause more confusion than any other writing fault. We suggest using this government guideline to eliminate tech jargon.
Describe acronyms correctly. for example, Geographic Information Systems (GIS)
Use Headings and Labels for the different sections of the proposals to distinguish them and make them easier to follow visually.
Avoid spelling errors and grammar mistakes that undermine your credibility.
Use active voice as much as you can to avoid any possible confusion

You should hire a technical writer to edit and read-proof your proposal before submitting it.

Conclusion

We hope this blog helps you confidently,

Decide whether you should apply for an SBIR grant.
Select your ideal grant from a proper Agency
Know how to write a winning proposal.

Our mission is to match more ambitious tech startup founders and women entrepreneurs to their ideal investors. If you have any questions, you could reach out to us via email: info@zettasher.com.