How to Keep Company Momentum with the SBIR/STTR Funding Approach

November 5th, 2014 by Rebecca Todd

A recent article in Innovation Daily entitled “The Entrepreneur’s Rollercoaster” provided advice for entrepreneurs about pursuing long-term success even as they experience the highs and lows commonly associated with starting a new business.

The tips provided readily apply to research-based companies that are using the Small Business Innovation Research program approach to funding their research and development efforts. As many program applicants are aware, the SBIR program is a long-term (3-5 year) funding approach for innovative companies to acquire federal backing to support the research required to bring their products from concept stage to commercial-readiness level.

Agencies with over $100 million in their external R&D budgets are required to set aside 2.8 percent of their R&D budgets specifically for qualified SBIR applicant companies. This set-aside agency requirement makes SBIR an ideal program for companies conducting high-risk, high payoff work to develop new products/services that address agency-identified critical research areas.

However, this national program is highly competitive, and the odds of a new applicant receiving a Phase I award are between 10-15 percent. Once the company has proven its ability to conduct feasibility research in Phase I, the odds of winning a Phase II award are much higher – between 30-50 percent. So some program applicants may find that if their first proposal is not selected for award, they need to resubmit during the next application cycle or prepare a new proposal, depending on the nature of the reviewer comments on their original submission.

The time frame between proposal submission and notification of award is generally four to six months. During the down time when an applicant company is awaiting notification of award outcome, it can be easy for the team to lose motivation and, consequently, momentum. There are several action items that companies can take once they find themselves in this waiting period.

One action is to continue exploring SBIR/STTR funding opportunities among other agencies, whether or not they are currently open to new proposal applications. The reason for doing so is that most grant agencies, such as the National Science Foundation and the U.S. Department of Agriculture, will repeat the same or similar research topics each solicitation cycle. A prospective applicant company could begin preparing a project scope-of-work based on grant agency research topics and even take the next step of engaging grant agency program managers for feedback on their project ideas.

During the interim, companies can also explore statewide entrepreneurial organizations/groups and investigate supplemental funding opportunities. Arkansas has several organizations that would allow for networking and potential collaboration with other like-minded innovative entrepreneurs, including the Arkansas Innovation Hub the Arkansas Venture Center , the ARK Challenge and the Little Rock Technology Park (in development). Through engaging in such organizations, companies may also be connected with opportunities to pitch their research ideas before audiences that may include potential investors.

Organizations such as the Arkansas Science and Technology Authority and Arkansas Development and Finance Authority offer small funding awards to support research and development efforts. By taking advantage of available state funding, companies may more effectively bridge the gap between awaiting award outcome and beginning their research efforts.

Of course, it never hurts to work with your local Small Business and Technology Development Center to obtain assistance with some of the next steps available for you company in order to remain actively engaged with the SBIR program and local innovative community activities during interim periods. Arkansas-based innovative companies are encouraged to contact Rebecca Norman at 501.683.7700 or for assistance.

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