Working for the past few years as a reviewer of Small Business Innovative Research (SBIR) grant applications for the National Science Foundation (NSF), I have learned a lot about the elements of a strong proposal.  In the process I have also gained respect for the SBIR programs and for the processes adopted by the NSF for evaluating them.  Here is some background and some insights on how to make a strong proposal.

The SBIR program started in the 1970s as a means for the federal government to help small companies keep our economy in a leadership position by fostering promising new technologies.  The Small Business Administration oversees the entire program and many federal agencies allocate funds for the program. Each agency creates processes for requesting, accepting, evaluating, awarding and tracking applications and successful grants. In Saint Louis, many applications are submitted to the National Institutes of Health (NIH) and the NSF each year.  Biogenerator has a program called Grants2Business which provides potential applicants training and mock reviews performed by seasoned SBIR reviewers.

Small Business Technology Transfer Research (STTR) is another facet of the program that is most applicable when the source technology is developed at a university.

SBIR/STTR grant applications can be submitted by anyone on behalf of a for-profit company with the express purpose of de-risking a technology to make it investment-ready. There are no educational minimums for the applicant.

SBIR/STTR applications are part of a three or four phase process. Phase 1 is feasibility, phase 2 establishes investment-readiness, phase 3 is private investment-based roll out and phase 4 is commercial success.  Phases 1 and 2 are fundable and require applications designed to put technologies in position to receive private investment for phase 3. Consequently, the key to a strong proposal is defining what is needed to satisfy investors and presenting a plan to learn those things.

In general, the keys to a strong NSF proposal include a strong statement of innovation and broad impact, a clear statement of the commercial drivers for the technology and a clear and sound plan.  All of this needs to fit into a 6 – 12-month budget for phase 1 of $225K and a 2-year plan of $750K for phase 2.  For those gaining early private investment, there is also an investment-matching program called phase 2B which can provide up to $500K more in phase 2.

For example, suppose you have an innovative highly recyclable plastic.  Broad impact comes through its recyclability and the ensuing environmental benefits.  Key drivers for market adoption include the physical properties of the plastics and the cost.  Use these drivers to focus the go-to-market and investment plan, as well as to define the metrics that determine feasibility.  Find the best first market and use that to define the opportunity as well as to prioritize what you need to work on in the feasibility study.

Suppose the early plastics are soft, sort of ugly and difficult to pigment.  A best first market might be an industrial products area that uses soft plastic for interior components and that arguably has large margins. A high margin market can ease pressure on yields; a market for internal components eases pressure on aesthetics and a market using soft parts eases pressure on physical properties.  Position yourself to advance the technology as it is.  Avoid the temptation to define feasibility as solving every problem at the outset – you won’t have the time or the funds.

Get letters of support from a company you might sell to, from a distributor in the space you want to compete in, and from an investor experienced in that area.  These letters provide external validation and guidance of your efforts. Letters are crucial for reviewers, who need to let the market decide the winners and losers.

At NSF, applications are rated as highly competitive, competitive or not competitive. Highly competitive applications have all of these components: innovation, broad impact, commercial drivers defining the scope of work, a market, a sound plan with metrics informing go/no go decisions and external validation.  Go for it.

Basics for a Winning SBIR Application