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To SBIR...Or Not To SBIR


Now that the government is back up and running, it is time for aspiring grant recipients to get serious about the December 5th SBIR/STTR application deadline. If you’ve done SBIR submission(s), you are already familiar with the chart showing Phase I SBIR success rates, which has been created to set your expectations. While there appears to be the beginnings of an upward trend from roughly 10% in 2011, the overall success rates are still below 20%, with a historical high of just under 30%.

Chin-up, keep a stiff upper lip, and get writing.

Mind you, this chart says nothing about success rates on the first attempt. The SBIR/STTR program permits two shots on goal for each grant application, with the second version bearing improvements catalyzed by reviewers’ comments in the Summary Statement for the first. While optimism is an essential characteristic common to entrepreneurs, and planning for success is always a good strategy, first timers as well as veterans should be prepared to revise and resubmit – with concomitant timeline adjustments. It is also important to understand that the Summary Statement and score for any grant application will arrive after the next date in the grant submission cycle. It all starts with an idea and a blank piece of paper (or word processing file). It’s not too early to start writing.

Rules Rule when it comes to SBIR applications

Of course, the hard part is drafting a high quality, detailed, compelling application that communicates a novel solution to an important problem – which fits within the indicated page limits. Don’t ignore the page limits or any of the formatting instructions. The instructions for each section of the application are all readily available…but there are a lot of them. SF424 (R&R) SBIR/STTR Application Guide for NIH and Other PHS Agencies is a good place to start – it is 240 pages. Best to find a comfortable chair.

There are also requirements regarding eligibility, which have changed recently, that have to be met. If you’re just starting out, meeting these eligibility requirements shouldn’t be a problem, as long as you plan to operate your new, incorporated business within the US. Please note, no problem is not the same as no effort – lots of work to do before polishing up the Research Plan.

Credentials please!

First timers need to get busy; there is a considerable amount of work to do before sending off the grant application (via the online submission portal). There are a few preliminary steps to complete; sufficient time must be budgeted for these administrative tasks – the Quick-Start Guide helps to set it all in motion. A DUNS number and an EIN are required prior to registering the organization with System for Award Management (SAM). Once SAM registration is complete, the Authorized Organizational Representative can be registered in Grants.gov and login credentials established. The AOR, or Signing Official (SO), is the sole organizational representative who can authorize the Principal Investigator (PI) and who can submit the online grant application at Grants.com.


The Company and PI need to register at the eRA Commons site as well, where information about submitted grants gets posted. When finished, go on to the SBA Company Registry to receive your SBC Control ID. The Grants.gov page suggests that new applicants allow 4 weeks to complete all of the registration steps. It’s not especially hard, but most of the steps are sequential, there can be administrative delays in issuing credentials needed to move on to the next step and there is a particular requirement to pay very careful attention to detail. There are lots of acronyms and forms (especially in SAM) and typos in transcribing key figures line the DUNS number or EIN from one form to another will cause confusion and delays. Once again – start early.

Your company has a fully equipped lab…right?

Start-up funds are scarce and it is quite challenging to raise the capital needed to secure a lab space and outfit it for productive research. The $150K cap on SBIR grants really does little to help in this regard as research-ready labs can’t be built out for such a small sum, which also has to pay for conducting the proposed research. The obvious solution might be to launch a virtual company, with lab work carried out by contract research labs; no need to build out and equip a lab. Unfortunately, while virtual business models are both feasible and common, virtual is not compatible with SBIR funding – Yes you do need a lab facility and outsourced research is limited to 30% of the awarded funds. The good news here is the grant recipient needs only demonstrate control over a lab space, and relevant equipment, to qualify – it is important to read and understand the criteria for demonstrating control in the SF424 Application Guide.

Free is really a state-of-mind

I have heard SBIR grants described as “free money” to fund small business research activities. As anybody who has submitted a Federal grant application knows, this money is far from “free”. Granted, there is no commitment of equity in exchange for the cash, but a considerable volume of real work goes into getting from concept to submission. Then the long wait…


If you’re a solo entrepreneur, with solid writing skills, looking for first bits of funding to launch a company through your own efforts, there’s some reasonably well-funded competition out there. Many companies have been at this a while and have grant writers on staff. Also, one of the highly visible effects of the JOBS Act of 2011 is the modification of rules for SBIR eligible companies. Some VC backed companies are now eligible for SBIR as a source of non-dilutive capital. In the grand scheme of things, not really good or bad; just another source of competition – one that can afford to hire staff to write grant applications.

Help is available

For first timers, or even for more experienced SBIR funded organizations, there are numerous options for consultants that will save time or improve prospects with different sets of eyes to review applications. At NEPA, we’ve worked on numerous grant submissions and our principals have funded a startup with a combination of SBIR and RO1 grants from the NIH. We’re happy to help entrepreneurs with their applications. There are many others offering guidance and support for aspiring SBIR awardees, some with dubious claims of success, but we know of at least a few, including The Isis Group#! and SciGro, who we respect and trust to provide the helpful benefits of their experience with the applicant’s interests in mind.

If you’re reading this in time, Betsy Ohlsson-Wilhelm, CEO of SciGro is will be speaking on the subject: First Steps in Writing an SBIR or STTR Federal Research Grant at the Harvard Innovation Lab on 22 October 2013.

Can’t get a grant if you don’t apply

SBIR funding can be very helpful for enabling a company to launch or to grow. I haven’t mentioned anything about selecting a destination for the grant, working out details for a facility if you don/t already have one, working out budgets, soliciting support from consultants and vendors, or the electronic application process. There is plenty of time to get into that once the idea has been fleshed out and the SBIR registration steps have been taken. Committing to the SBIR application route means a considerable amount of work over much time – might as well get started.

By: roger.frechette



Picture Credit: NIH Data Book