One way that smaller and startup firms can become more specialized is to enhance their service offerings through research and development (R&D). While R&D typically requires internal investment, the federal government has a program in place that will award grants or contracts to small businesses to pursue R&D efforts on its behalf. The Small Business Innovation Research (SBIR) program is a highly competitive program that encourages domestic small businesses to engage in Federal Research/Research and Development (R/R&D) that has the potential for commercialization.
How It Works
The SBIR program awards contracts or grants in three phases to small businesses. Phase I is typically an award of $150,000 for twelve months to establish the technical merit, feasibility, and commercial potential of the proposed R/R&D effort. Phase II is typically an award of $1,000,000 for two years to continue the R/R&D efforts initiated in Phase I, usually toward a refined prototype. Phase III is full commercialization. The SBIR program does not fund Phase III work. However, for some federal agencies, Phase III may involve continuing, non-SBIR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government.
The District of Columbia recently began a new program called ConnecTech that aims at engaging more District businesses with the SBIR program through a variety of offerings. Primarily, ConnecTech will provide training to entrepreneurs and companies interested in the SBIR program. The training sessions are focused on topics that will help better position firms for a successful Phase III transition even before submitting the Phase I bid. This includes teaching companies how best to identify topics that are likely to be transitioned to Phase III and selecting the right partners for the R&D effort.
Still Not Convinced?
Ultimately, with groups like ConnecTech offering SBIR support, there is little reason not to participate in the program. In addition to commercialization potential, here are three more reasons why your firm should consider the SBIR program:
- Non-Dilutive Capital: For startups and small companies taking on additional capital can mean dilution. SBIR funding is neither equity nor debt, so it is an excellent vehicle for companies to raise capital and further validate their business model.
- Reduced Overhead: SBIR efforts require a Principal Investigator (PI) to lead the research. Some firms believe this must be a person with an academic background and PhD; however that is not the case. Many times a firm’s Chief Technology Officer or a Sr. Engineer can serve as PI and have some of their hours allocated to the SBIR project instead of another cost center such as overhead.
- New Client Relationships and Commercial Work: SBIR projects can represent a way into new clients without the long window that is typically required. Additionally, a requirement of most SBIR bids is a commercialization plan that is focused on the private sector. As a part of developing the plan, the company will be creating a pathway to private sector business that can be expanded and create differentiation away from the federal market.
Topics for Data Community DC
Here is a list of current topics that are currently open from various agencies that may be interesting to Data Community DC blog readers:
- Defense Against National Vulnerabilities in Public Data (Defense)
- Deep Analytics for Data in Cyber-Physical Systems (Defense)
- Knowledge-aided Interface for Big Data Streams (Defense)
- Layered Data to Areas of Interest (Defense)
- Game-based technology and Database to Train PreDrivers, Young Drivers, and Older Drivers to Detect Traffic Hazards and Respond Appropriately (Transportation)
- Big Data-Aware Middleware and Networking (Energy)
The SBIR program leverages the agility and creativity of America’s small businesses and fosters the kind of innovation that business requires. It provides a pathway that allows entrepreneurial firms to create their next opportunity and cultivates a corporate culture focused on outside of the box thinking. With so many resources available to provide SBIR support, more and more companies are beginning to understand the full capabilities the program offers and yours should as well.
Please feel free to contact Philip Reeves, Manger of Small Business Technology and Innovation at DC Department of Small and Local Business Development with questions: http://dslbd.dc.gov/connectech.