9 insights to consider from past Small Business Innovation Research (SBIR) grant recipients when strategizing for and crafting your SBIR application.
🔬Learn more: What are SBIR/STTR Grants?
As a first time applicant, it is imperative that you give yourself time to put together your application. The first time creating an application is the most time consuming: you need to organize and delineate - in writing, probably for the first time - your research and/or commercialization strategy, the merits of your team, your project aims, and more. Once you go through this process, you have the tools to craft a strong application when applying for different grants.
A well-planned and clean application is more likely to get funded than one haphazardly scrambled together. Don’t think that if you have all your data, you can finesse an application over a weekend. As you write more grants, they get better and better because iterating through the drafts will refine the writing.
As a seasoned applicant, it is still important to take time and thoroughly assemble an application. Put together your budgets and ensure your commercialization strategy supports why the government should allocate tax dollars to your project. Unclear writing makes it difficult for reviewers to truly understand the scope of your company.
Phase II and IIB grants are more likely to be funded because you’ve proven that your company has the capability to reach Phase I milestones. Use this opportunity wisely, and don’t make silly mistakes in formatting. Continue to get feedback and reiterate through drafts before submission.
There are many SBIR workshops available to help applicants understand the application process and questions. You can also reach out to the grants officer at the agency that disburses the grant.
The National Institutes of Health (NIH) has an Application Assistance Program (AAP), a 10-week intensive program that provides coaching for first-time or previously unsuccessful applicants, focusing on companies with minority leaders. Take advantage of this program if you can, as there are designated coaches who work with you and provide feedback on your application and writing before submission. This program greatly improves grantsmanship and chances of being awarded funding.
🔬Read more about: How Incubators Can Improve Your SBIR/STTR Grant Application
Grantsmanship is defined on Wikipedia as the “art of acquiring financial grants through the process of grant writing.” Grantsmanship, at a general level, includes coherent and logical reasoning, professionalism, and thorough documentation.
In your application, you need to demonstrate the feasibility of your idea and explain the market and need for your idea. Scientists often pride themselves on being academics and laugh at salesmen, but grant writing is selling your idea and your company. Find what other successful applicants have submitted, follow their format, and make it easy to read.
As you write, make sure you zoom out periodically and look at your application holistically. Are your project aims clear? Do they align with the NIH mission and values? Get outside feedback on the writing and scope, and apply the criticism to make your application better.
Be thorough - the reviewers make judgements from the documents you provide. You can’t expect reviewers to know acronyms or background information about the market or your technology. Give them everything they need to make an informed decision, but also be succinct and poignant.
Some companies use templates derived from federal SBIR instructions. Following these templates can help organize your information in a clear and palatable format - and when reviewers need to find specific information, they can rely on the headings (which are the same sections as delineated from the federal government) to find what they’re looking for. Doing this can make it easier for reviewers and appears more professional, rather than making reviewers dig for information in your 100-page application.
🔬Related: 8 Tips for Writing a Winning SBIR
SBIR applicants are given an impact score, which directly affects whether your project is funded or not. A lower score is better, and there are cutoffs that determine what score is funded and what isn’t. There are at least five criteria that go into this score: Significance, Investigator(s), Innovation, Approach, and Environment.
Having a strong team with expertise in your project’s needs can increase your chances of getting funded. It is important to identify resources in advance - for example, if there’s an immunology component in your project, get an immunology expert on board to share expertise in project design, execution, and setting and communicating realistic milestones. The earlier you identify these resources, the earlier you can reach out to them. You can also fill in administrative gaps with external consultants. The right team can increase your impact score and gives insight to make a better overall project.
🔬Read about: Understanding the SBIR Review Process
When you apply for SBIR funding, do your best to max out the budget, but also be realistic. If the Phase II grant caps at $2 million, apply for the $2 million if possible. However, the review panel will know if you are not being honest in the funding needed for our project. Your company’s credibility decreases if you say a project will cost $100K but the review panel knows something of that scope will cost $500K.
Another tip is to ask for enough money to complete your project. If your project is going to take $10 million, and the grant provides $2 million, you need to pare down your goals and be more realistic when creating your application.
SBIR grants are non-dilutive: the federal agency grants you money, and allows you to keep all your intellectual property and equity. Getting non-dilutive funding is a good strategy for companies just starting out. These grants allow you to reserve equity while developing; when your company is further along and has more say in its direction, your company can seek private funding. If you give away equity to private investors in the early stages, your startup loses autonomy in later projects. Private investors also tend to gravitate towards companies that are more established, so SBIRs help get your company off the ground.
Even going into Phase II, SBIRs can supplement your company’s budget by taking a load off of private dilutive funding. This affects how much of the company you own upon exit - if the SBIR gives you $2 million to finish a $10 million project, that is $2 million worth of equity that you keep.
SBIR grants are supplemental funding to get you off the ground, but don’t become an SBIR mill without putting out any products. Try to identify and tap into other revenue streams to support your operations in case you don’t get funded. Look for private investors as well - venture capitalists look favorably upon past SBIR recipients because it proves they are trustworthy and delivering companies.
A company shouldn’t rely on the government to keep itself funded, but it also should not stretch itself too thin by chasing too many revenue streams and private investors.
SBIR grants are time consuming and challenging, but going through the SBIR application process teaches you to be a better scientific communicator. The length of time between submission to disbursement is around 5-8 months, but getting private funding can take just as long, if not longer, if you haven’t come up with your company and development strategy.
If private investors don’t press you for clear and thorough information, chances are your company does not have a solid strategy, and is unlikely to get more funding.
Getting the paperwork together for an SBIR is daunting - no one does well by slapping something together at the last second. But, this process forces your company to create clear, precise plans that you can refer to in the future with private investors or more SBIRs. If you do get the SBIR funding, your company becomes more competitive for securing private funding. Even if your application is not accepted the first time around, you have already gone through the long ideation process, which will streamline the reapplication process.
As a caveat, do not copy and paste the same strategy and information from your SBIR grant to a pitch for private investors. It is a good idea to tailor your company strategy and goals to the audience.
Do you have a great company in the bioscience or medtech industry? Do you need wet-lab and/or fabrication space to develop and test your product?
