Andrew Aston is the Technical and Business Assistance (TABA) Program Manager at OK Catalyst. He aids program participants with writing successful Phase II proposals as well as forming connections to the Oklahoma entrepreneurial ecosystem for commercialization support.
How to use SBIR Funding as the launchpad for your venture
Of all the reasons that entrepreneurial ventures fail, limited access to capital far outpaces the crowd. Early-stage funding is the lifeblood of a new venture, and even startups with radically innovative technologies can fail before their product reaches the market if they don't grow fast enough to attract investors. However, some early-stage startups that are too high-risk to secure venture capital funding hold enormous potential if they can secure enough capital to bridge the gap from initial idea to commercialization.
For entrepreneurs who are developing high-risk, innovative technologies, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are potential solutions to entrepreneurial funding challenges. The SBIR program is America’s biggest seed fund, with more than $4 billion in non-dilutive research and development funding available for innovative companies and startups across the nation. The federal agencies participating in the SBIR/STTR programs designate research and development topics and accept proposals. They fund innovative research that will meet the objectives of their individual agencies. To be eligible, a small business applicant must be American-owned, organized as a for-profit entity, and have less than 500 employees.
The SBIR program offers entrepreneurs a three-phase path from initial idea to commercialization of a product. Phase I is designed to be a six to twelve-month period to explore and prove the technical merit or feasibility of an idea or technology. If a company performs well during Phase I, it may be eligible to apply for a more lucrative Phase II award which may last for up to two years and expands upon Phase I results through further research and development. Phase III is the commercialization phase, and funding during this phase must be secured from the private sector or from other non-SBIR federal agency funds that can support continued development.
STTR funding is very similar to SBIR funding; however, the STTR program requires the awardees to formally collaborate with a research institution in Phase I and Phase II. STTR's most important role is to bridge the gap between performance of basic science and commercialization of resulting innovations.
If you are seeking non-dilutive, early-stage funding opportunities for your Oklahoma-based entrepreneurial venture, here are four ways to get the most value out of the SBIR process.
1. Develop a Commercialization Plan
The critical goal of every SBIR project is to produce a commercialized product. It is not enough to merely have an idea for a research project. The goal of your Phase I project is to demonstrate the commercial potential of your research, and in order to secure continued Phase II funding, you must have a clear go-to-market plan with well-defined, achievable goals along your path to commercialization. SBIR-awarded companies should invest time in conducting market research and developing a comprehensive commercialization plan. OK Catalyst provides a suite of Technical and Business Assistance (TABA) services, including market report creation and access to industry information through IBIS World and other industry databases.
2. Build a Support Team
In order to submit a competitive SBIR proposal, you need a support team with the skills and attributes necessary to achieve your stated goals. Whether you build your team internally, employ the resources of industry partners, or develop a combination of the two, you must cultivate the necessary resources to commercialize your innovation. Product development connections are essential for the prototyping and manufacturing
elements of your project. Fortunately, the Oklahoma Manufacturing Alliance can help you find the right resources. In addition, the Innovation Labs at OU’s Tom Love Innovation Hub provide a suite of state-of-the-art fabrication equipment and technical experts through the Fabrication Lab as well as marketing support through the Content Lab and software consultations through the Code Lab.
3. Pursue Additional Funding Opportunities
As you pursue your Phase II award, you should take advantage of other funding resources for which you may be eligible. The Oklahoma Center for the Advancement of Science & Technology (OCAST) and its funding program, OCAST Applied Research Support (OARS), has a similar mission to the SBIR program, but with a focus on Oklahoma. OARS funding is of particular interest to Oklahoma entrepreneurs pursuing SBIR funding because like SBIR, OARS is non-dilutive and focused on innovative end-user applications in the areas of aerospace, autonomous systems, defense, biotechnology, or energy diversification. In addition, an OARS award can be worth up to $500,000, but a companies must find a $1-for-$1 matching award to be eligible, making SBIR-awarded ventures ideal candidates. In addition, OCAST provides Oklahoma entrepreneurs with numerous other programs and resources as part of its mission to grow and diversify the state’s economy through technology development, technology transfer and technology commercialization.
4. Find Community
You don't have to pursue your entrepreneurial goals alone. Oklahoma offers numerous community resources to entrepreneurs. In the SBIR space, OK Catalyst can serve as a guide through the SBIR process as well as a mentor to connect your venture to the greater entrepreneurial ecosystem throughout the state. For OKC entrepreneurs seeking to develop community, The Verge
offers a co-working space alongside fellow entrepreneurs as well as numerous networking and resource events. For Tulsa entrepreneurs looking for a similar resource, 36 Degrees North offers co-working spaces tailored to the needs of entrepreneurs with opportunities for networking and building community with likeminded people.
The SBIR process offers small businesses a unique opportunity to drive innovation, secure financial support, and unlock a myriad of doors for growth. As you advance through the different phases of SBIR funding, keep your project aligned with the agency's goals and continue to seek new avenues for market expansion. If your product continues to meet benchmarks for innovation and technical merit, then extracting maximum value from the SBIR process will provide you with pathways to catalyze long-term success. If you have additional questions about the SBIR process, check out OK Catalyst's SBIR Funding Labs to explore potential funding opportunities for your small business.
To learn more about OK Catalyst’s services, visit okcatalyst.com or email okcatalyst@ou.edu.