Your startup could qualify for over $32 billion in grant funding. How? Through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, also known as America’s Seed Fund.

These programs are one of the largest sources of early-stage capital for technology commercialization in the United States. They provide grant funding to US owned startups and small businesses to license and develop university and research lab IP that has a strong potential for success in the marketplace.

If you’ve never heard of the SBIR program, its been around since 1982. Their budget has over two and a half billion dollars to fund early stage university and research lab technologies that aren’t ready for angel or venture funds. These programs also fund startups with IP that’s needed by government agencies. One example is the National Institute of Health. They are actively looking for startups to help commercialize new bio-technologies. But they aren’t the only government agency funding startups. Other government agencies seeking new innovation includes the Department of Agriculture, Commerce, Defense, Education, Energy, Homeland Security, Transportation, NASA and The National Science Foundation.

Why is the government doing this? Because universities and research labs around the country are sitting on billions of dollars of intellectual property that’s been developed by these institutions. It’s part of their ongoing initiative to create public-private partnerships between research institutes, universities and the emerging growth business community. And by law they have to offer it to the commercial marketplace.

Without the SBIR program, many of these game-changing technologies would never make it out of the lab. They focus on the startup and small business market because they are the best at developing and launching these IPs into the market.

There are two phases of the SBIR program: a $150,000 proof of concept (phase one) and up to $900,000 to prove commercial viability (phase two). Sometimes a startup can go right to phase two depending on the IP. Another upside benefit for your startup is that it attracts venture-capital finance to commercialize the IP in the marketplace. Startup companies received over $40 billion in venture capital financing through these grant programs.

You can also get development funding for your own IP by directing your R&D towards the needs of one of these government agencies. NASA has awarded over one hundred million dollars in funding projects to startups and small businesses to develop their IP for specific NASA applications. In many cases, your IP doesn’t have to be fully developed. The military often provides funding grants for companies with viable IP who then use the funding to develop and prove the commercial viability of their IP.

If you’re looking for a way to launch your startup, partnering with university or research lab is one of the fastest ways to not only get your business up and running, but also get it funded. One of the nice things about these government-funded programs is the government takes no equity. But they do keep an eye on your progress. Qualifying for these grant programs requires putting together a plan that details time-lines and specific results. The key here is a business plan that clearly explains what you will do and when.

The SBIR puts on road shows to visit different areas of the country. They meet one-on-one with new entrepreneurs and startup companies to present funding opportunities and details about how the process works. You can check out the SBIR website to find out about all the different grant programs and technology they’re interested in licensing. You’ll also find information on how to apply for these grants and what you must do to qualify.


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