Small businesses face a unique challenge in securing funds to develop their early-stage, highly innovative ideas; the private sector typically requires robust proof-of-concept data before investing, but producing data costs money. How can small businesses secure funds to develop a novel product, process, or service from the conceptual design stage through research and development?
Enter the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding opportunities: a large source of non-dilutive funding to advance high-risk, early-stage technologies toward commercialization. SBIR and STTR grants are available to for-profit, U.S. owned small businesses with less than 500 employees who have high-risk, paradigm-shifting ideas.
Many institutions within the National Institute of Health (NIH), National Science Foundation (NSF), and Department of Defense (DoD), among other agencies, participate in the SBIR/STTR program, making it a great fit for diverse fields of innovation from medical devices, to telehealth and robotics, to pathogen detection systems and everything in-between. The program is organized into three distinct phases: Phase I, II, and III.
Most SBIR/STTR applicants start by applying for Phase I grants to conduct feasibility and proof-of-concept studies. These grants are typically 6-12 months in length and awards range from $250-$500K. No preliminary data is required to apply for a Phase I grant and, on average, one-third of awards go to first-time applicants. Therefore, it’s an ideal opportunity for small businesses with early-stage, highly innovative ideas—even if they’ve never applied for a grant before. The success rate of Phase I applications varies between 15-20% historically. Although funding is never guaranteed, the process of putting together a grant application is invariably beneficial in organizing research ideas, assembling a team and resources, and receiving expert-level feedback from grant reviewers.
Applicants who successfully receive and execute Phase I funding can go on to apply for Phase II funding, intended for advanced research and development efforts toward commercialization. In essence, the goal of achieving Phase I is to apply for Phase II, where project periods are 2 years, awards range between $1.7-3M, and success rates average between 35-40 percent—an incredible payline for transformative levels of non-dilutive funding. Completing Phase II studies should put a product at or near the point of commercialization, for which small businesses then enter Phase III where funds must come from non-SBIR/STTR sources such as private sector investment.
So, what does it take to apply? It’s been estimated that writing and submitting an SBIR/STTR grant application can take upwards of 150 hours from start to finish. Much of that time can be spent learning SBIR/STTR nuances and idiosyncrasies, but at Superior Medical Experts (SME), we leverage our expertise of writing 100+ grant applications to organize this process, strengthen your application, adhere to rules and regulations, and reduce client effort to just 40 hours or less. Since 2017, SME-assisted grants have received over $5M in funding, leading to an average ROI of 1,132%.
Octane businesses are well-positioned for SBIR/STTR success through their expansive network connections and solid business plans. SME is excited to be working in partnership with Octane to help small businesses thrive. For more information on how your business may benefit from SBIR/STTR funding, please reach out to Dr. Ashley Mooneyham, Director of Grants at SME, using the contact information below:
Ashley Mooneyham, Ph.D.
Director of Grants
(763) 213-4417
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