Developing Competitive SBIR/STTR Applications – Part 2: Prepare and Submit Your Proposal
This SBIR/STTR series consists of five tools: Part 1; Get Prepared; Part 2 Prepare and Submit Your Proposal; Registration Tool; Budget Tool, and Biosketch Tool.
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer—(STTR) funding is the primary source of publicly funded research and development (R&D) and commercialization available to U.S. startups.
This is Part 2 of our “7 Tips” on creating competitive SBIR/STTR applications. Before using this tool, please review Part 1 – Getting Prepared here.
The National Science Foundation (NSF) first founded SBIR in 1977 to support cutting-edge technologies developed by small businesses. Since then, the program has expanded to include all government agencies, with the total grants and contracts in the billions of dollars.
Why Pursue SBIR/STTR?
SBIR/STTR is among the most desirable capital that an advanced technology startup can receive. SBIR/STTR programs provide non-dilutive capital (does not require shares of company stock in return) and does not have to be repaid (not a loan). Funding typically starts around $100,000 but, over multiple phases, grants and contracts can reach $1 to $2 million or more.
Depending on the agencies, about 15 percent of companies that apply for SBIR/STTR Phase I are approved on the first attempt. The conversion rate from Phase I to Phase II is about 40 percent.
The quality, the novelty of the idea, and the overall capabilities of the proposed team to execute the project as proposed are the winning ingredients. Strong proposals take time to develop and write. We advise companies to plan on ten to fifteen hours per week for three months for the first-time applicants.
Identify a Funding Opportunity Announcement (FOA) that matches your technology and product use case.
Define the proposal project and timeline, working back from the submission date stated in the solicitation as soon as the company makes the decision to apply.
To apply and receive federal funding, SBCs need to get registered in the government databases. THE COMPANY REGISTRATION APPROVAL PROCESS MAY TAKE 6-8 weeks. START EARLY!
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- Every program requires at least three registrations. Depending on the agency, additional registrations could be required.
- Dun and Brad Street (D&B):
- DUNS number;
- System for Award Management (SAM), and
- Small Business Administration’s (SBA) Company Registration.
2. Registration Process
Once you make the decision to apply for SBIR/STTR, do not attempt the registration process alone. Get help to avoid potential discrepancies during the registration which can significantly slow progress and may even cause your company to have to start over.
Review these requirements online. Assemble the information required before you initiate registration. Here’s a tool to help.
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- Before you can complete SBIR/STTR registration, registrations with SAM.gov, DUNS and EIN/TIN are required.
- SAM.gov: A company cannot work with the federal government or get paid without registering with SAM.gov. It is a multi-step process. Watch this tutorial on SAM Registering to understand what is required.
- The Marketing Partner ID Number (MPIN) is mandatory for SAM registrants. It is the personal code registrants create which allows access to other government sites, such as grants.gov. Safeguard your company’s MPIN, but if you do, the Entity Administrator can contact the Federal Service Desk (FSD) for web site support assistance.
- Grants.gov registration requires two registrations, EBiz-POC, which is the company’s account with signing authority, and Authorized Organization Representative (AOR), which is a personal account and is the only account that can submit the application. Click for an explanation of the various roles and privileges of grants.gov.
- EIN/TIN Taxpayer Identification Number (TIN) and Employer Identification Number (EIN) are used by the Internal Revenue Service (IRS) in the administration of tax laws.
Registrations take a lot of time to complete and more time to be approved. Some registrations are annual; some are one-time. Keep records of your submissions, approvals, of everything. Seek guidance from your local Procurement Technical Assistance Center (PTAC).
The entire registration process should be no cost to you. Businesses will be phishing for applicants to pay their services in helping you register. Don’t take the bait!
3. Define action plan and time line that produces a responsive proposal.
Draft a one-page executive summary that describes the unmet need you are attempting to address, quantitative performance milestones, the focal point of the application, and the major strengths of the technology. Allow time to address all key requirements.
4. Schedule a 30-minute phone call with the Program Director to discuss project scope.
Build a relationship with the Program Director early. If you have questions or need clarification, send an email or schedule a call. As part of responsibilities being a Program Director, their focus is providing you guidance through the application process and identifying proposed solutions that are aligned with their needs. You share a goal.
5. Build the right team and gain access to equipment and other resources.
Select a Principal Investigator (PI) with the right expertise. Do you need a multi-PI team? SBIR/STTR PI requirements are different. Assemble the scientific team and provide biographical sketches on assigned federal templates (OMB No. 0925-0001 and 0925-0002 – Rev. 03/2020).
Obtain letters of support from collaborators (requires lead time). NIH grantees must establish a subaward, or consortium agreement, with any outside organization that performs any grant-supported research activities.
Obtain letters of support (LOS) from partners to fill the gaps, including academic collaborations, consultants, business executives, industry opinion leaders, and strategic partners.
- Know the Scorecard. Here’s an example from NIH.
The single most important step in building a proposal is to explicitly follow an agency’s guidelines and timeline. There is no flexibility.
Some sections of the proposal will be more challenging to produce than others. The research strategy and technical discussions are challenging and likely to take the most time. Bio-sketches for senior and key personnel, detailed descriptions of facilities and equipment, and letters of support (LOS) can be completed more easily but they require lead time.
- What if you are not funded?
On average, one in eight proposals receive an award. If your proposal is not accepted the first time, evaluate a second application. Most agencies allow resubmissions. It may take two to three attempts to learn how to prepare a winning proposal.
Understand the review process and dynamics. Use reviewer comments to improve your application. A summary statement (written critiques) will be provided as a roadmap for next steps. Discuss the statement with your Program Director addressing strengths and weaknesses.
Writing a solid proposal is an investment in helping your organization grow. Absolutely you seek funding, but even if that doesn’t happen, the feedback from the scientists and experts in these agencies can help you improve your solution and figure out what talent is missing from your team. The feedback may cause you to pivot or prevent you from investing further in a dead end.
The SBIR/STTR process forces a company to view their business and solution critically. It helps teams learn to listen to criticism and helps validate the market and product in a way that a company can’t always accomplish from the inside out.
Conclusion
Federal agencies have specific application needs that small companies with innovative discoveries may be able to satisfy once these companies have the capital to fund the required research and development. The process is long, complex, and bureaucratic, but when an agency’s opportunity aligns with a startup’s business plan, it’s a great time to light the fuse.
With a track record of more than 70,000 issued patents, 700 publicly traded companies, and $41 billion in VC investments, the SBIR/STTR process is an opportunity worth understanding and evaluating for many advanced technology startups.
Contact Rev1 to learn more.
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*Links to SBIR information for Department of Commerce (DOC), Department of Defense (DoD), Department of Energy (DOE), Department of Health and Human Services (HHS), Department of Homeland Security (DHS), Department of Transportation (DOT), Environmental Protection Agency (EPA), National Aeronautics and Space Administration (NASA), National Institutes of Health (NIH), National Institute of Standards and Technology (NIST), National Oceanic and Atmospheric Administration (NOAA), National Science Foundation (NSF), and U.S. Department of Agriculture (DOA).
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Resources
Online Tutorials – An excellent resource by topic. Easy to follow and absorb.
SAM – Registering new entities. This video is a must-see for any company contemplating the registration process.
NIAID Sample SBIR/STTR Applications – Collection of winning applications and summary statements.
Grant Agencies and Contracting Agencies – Search agency solicitations
