SBIR/STTR Application Requirements

SBIR/STTR Application Requirements?

It is important to first determine whether your startup qualifies for an SBIR or STTR grant or contract. Each funding opportunity has its own requirements; however, many overlap. SBIR grants or contracts have specific criteria that all must be met by you to be eligible to apply?SBIR.gov?outlines those criteria as follows:?

1. The organization must be for profit and have a place of business within the United States. The organization must also primarily be within the US. In some cases, startups not primarily located in the US can fulfill these criteria if they make significant contributions to the US economy through paying taxes or using American products, materials or labor.?
2. Is in the legal form of an individual proprietorship, partnership, limited liability company, corporation, joint venture, association, trust or cooperative, except that where the form is a joint venture, there must be less than 50 percent participation by foreign business entities in the joint venture?

• SBIR and STTR.?Be a concern which is more than 50% directly owned and controlled by one or more individuals (who are citizens or permanent resident aliens of the United States), other business concerns (each of which is more than 50% directly owned and controlled by individuals who are citizens or permanent resident aliens of the United States), an Indian tribe, ANC or NHO (or a wholly owned business entity of such tribe, ANC or NHO), or any combination of these; OR?
• SBIR-only.?Be a concern which is more than 50% owned by multiple venture capital operating companies, hedge funds, private equity firms, or any combination of these. No single venture capital operating company, hedge fund, or private equity firm may own more than 50% of the concern, unless that single venture capital operating company,?hedge fund, or?private equity firm?qualifies as a small business concern that is more than 50% directly owned and controlled by individuals who are citizens or permanent resident aliens of the United States; OR?
• SBIR and STTR.?Be a joint venture in which each entity to the joint venture must meet the requirements set forth in paragraph 3 (i) or 3 (ii) of this section. A joint venture that includes one or more concerns that meet the requirements of paragraph (ii) of this section must comply with § 121.705(b) concerning registration and proposal requirements.?

1. Has, including its affiliates, not more than 500 employees. If the concern is more than 50% owned by multiple venture capital operating companies, hedge funds, private equity firms, or any combination of these falls under 3 (ii) or 3 (iii) above, see Section IV. Application and Submission Information for additional instructions regarding required application certification?

The Differences Between SBIR and STTR?

You should next determine which grant program is best for you. SBIRs and STTRs are the two largest government grant funding programs that have many overlapping similarities. Despite these similarities there are a handful of key differences between the programs:?

• The first is that the STTR program requires that the small business/startup work with a non-profit research institution (RI), typically a university or academic or Federal lab?
• The second key difference is that the STTR program requires that any technology/product developed at the RI be transferred to the small business/startup.?
• The SBIR program has 11 participating agencies while the STTR program has 5.?
• STTR requires that the small business do a minimum of 40% of the work and that the RI complete a minimum of 30% on a Phase I project. Alternatively, an SBIR Phase I requires the small business to complete a minimum of two-thirds of the work and is given the option to subcontract one-third to any entity, including an RI.?

An SBIR may be the better choice under the following circumstances:?

• You wish to submit a proposal where you can include another company as a subcontractor. Subcontractors are usually used to improve the “compatibility” of the team on the proposal. You are able to include a non-profit university or Federally-funded researcher in your SBIR proposal. While it is optional on the SBIR proposal, it is required for the STTR proposal.?
• Depending on the company, sometimes investors do not like the idea of a non-profit being involved with the project. One of the main reasons an investor may be against this is that it can complicate the claim to the intellectual property of the product. This concern is from the STTR requirement of establishing an agreement between the small business and the RI about the allocation of intellectual property.?
• The RI lead researcher may prefer to work as a private consultant rather than someone who represents an entire university or Federal Lab. Consultants do not qualify a small business for an STTR grant because there is no nonprofit RI.?

An STTR grant may be the better choice in the following situations:?

• In order to have the best team for a competitive grant proposal a large portion of the award needs to be subcontracted. The SBIR program only allows one-third of the research be subcontracted while the STTR program allows up to 60% of the work be subcontracted.?
• The STTR program is often described as a “collaboration” between two partners (the small business and nonprofit RI). It is important to remember the award and overall control of the technology/project goes to the small business.?
• There may be a higher likelihood of winning a grant award if the small business teams up with an RI.?

Required Registrations?

Next, it is important that the applicant has completed the required registrations prior to the SBIR/STTR being submitted. It is important to note that some of these registrations can take 6 or more weeks so it is imperative that the registration process begins well before the desired grant applicant opens.?

• System for Award Management (SAM) on Sam.gov: This registration can takes 4-6+ weeks initially, and then requires annual renewal. After registering you will be assigned a Unique Entity Identifier (UEI), and when registering for All Awards, also a Commercial and Government Entity (CAGE) Code?
• SBA Company Registry on SBIR.gov. This registration is quick but doing it correctly and fully requires an active SAM registration?
• Some agencies require additional registrations or account setup steps, including, but not limited to eRA Commons, Grants.gov, DSIP, Research.gov, etc.?

Select a Phase?

Depending on the stage or need of your startup, the STTR/SBIR program offers multiple grant pathways:?

• Phase 1/I: Startups in the beginning stages of R&D research are eligible only for a Phase 1. It is only strongly encouraged to begin with a Phase 1 if you have applied to other SBIRs and/or been awarded funding. While there are other pathways to take, success-rates drop dramatically when skipping over first applying to a Phase 1. SBIR Phase 1s primary purpose is to aid in establishing the technical merit and feasibility of the R&D proposed by the applicant.?
• Direct-to-Phase 2 or Fast Track: These applications allows the startup to either skip to Phase II directly or submit both Phase I and Phase II in order to bridge the gap between the phases. Only some agencies allow direct-to-Phase II or fast-track proposals.?
• Phase 2/II: Phase 2 grants are often a “Follow On” application awarded after startups have successfully been awarded a Phase 1 grant and achieved the established technical merit of their R&D. The purpose of Phase 2 funding is to aid the small business in getting ready for commercializing their product or technology. Only one Phase 2 application may be awarded per Phase 1 award.?

Next Steps?

Once you have completed all of the above steps you can begin narrowing down your grant search. You can search for grants on TurboSBIR for free and filter based on agency, grant phase, SBIR or STTR program, etc. Sign up here:?https://www.turbosbir.com/?

References

https://seed.nih.gov/sites/default/files/HHS_Program_Descriptions.pdf

https://www.sbir.gov/sites/default/files/SBA_Final_FY19_SBIR_STTR_Annual_Report.pdf

https://seed.nih.gov/sites/default/files/HHS_Topics_for_Budget_Waivers.pdf

https://www.sbir.gov/sites/all/themes/sbir/dawnbreaker/img/documents/Course1-Tutorial3.pdf

“Funding.”Funding | SBIR.gov,?https://www.sbir.gov/funding

SBIR.gov,3 Oct. 2022,?https://sbir.gov/