How to Get Government Funding for Your Technology Project

There’s no doubt that small businesses drive technological innovation. Even the Microsofts and Qualcomms of the world started out as small businesses. To promote this innovation, the U.S. government, and specifically the Small Business Administration, offers opportunities for small businesses to get government research financing.

Created in the 1980s as a way to ensure U.S. competitiveness in the emerging global technology market, the SBA’s Small Business Innovation Research program has provided funding over the years for many early-stage inventions by companies that are household names today.

SBIR grants are delivered to companies in several phases. The maximum amount for early-stage phase 1 funding is $150,000 and lasts six months. Phase 1 grants are designed to fund research and development and to determine the feasibility of a project.

Phase II funding builds on the results of the first phase and helps companies develop prototypes and even the final product. Grants can last up to two years and provide up to $900,000 in funding.

A third option is Fast Track funding, which aims to bring promising technologies to market faster, skipping the downtime between phase I and phase II funding.

The overall objective of SBIR grants is to generate follow-on revenue from private sources, spurring development of a technology and associated companies. Opportunities range from funds available for special education technologies to home-health-care robots.  

Eleven federal agencies are involved in the granting process:

• Department of Agriculture
• Department of Commerce
• Department of Defense
• Department of Education
• Department of Energy
• Department of Health and Human Services
• Department of Homeland Security
• Department of Transportation
• Environmental Protection Agency
• NASA
• National Science Foundation

To qualify for funding, a business must be greater than 50 percent owned by a U.S. citizen and have no more than 500 employees. To improve your chances of winning an SBIR grant, you need to study the market, just as you would for launching a product.

The first step is to identify the agency and sub-agency that best match your innovation or technology. SBIR.gov  lists projects for which it is seeking technology. Links lead to detailed descriptions that will help you figure out if you have a technology that might be worthy of funding. The site includes submission dates and agency specifics.

There are agencies and individuals on the state level that help small businesses identify SBIR opportunities. Many states have local SBIR offices or business incubators where small business owners can get information and help with applications. There are state contacts on the SBIR website.

You can also take a class, hire an SBIR private coach, or attend an “SBIR opportunity day,” often conducted by the sponsoring agency in an effort to solicit bids. There you can walk through the process and find out what the agency is looking for in depth.

It also helps to read winning proposals in your area of expertise and network with other entrepreneurs who understand the SBIR application process.

Those who win SBIR grants do so because their projects are innovative and have market potential. SBIR funds one in seven proposals on average. So while the process may seem complicated, it’s worth the time. SBIR grants, which are not loans and do not have to be repaid, let you keep both the patent and the profits.