SBIR and STTR Grants

Special Considerations

Submitting a successful SBIR/STTR proposal is not just about the quality of the proposal. It is also about timing. Congressional research support may wax and wane depending on the political climate, and funding for specific NIH institutes may also increase or decrease compared to others.
Intellectual property rights can prove challenging to manage for small businesses that emerge from a university-sponsored project. The technology transfer office ordinarily does not relinquish its ownership of a patent for development by the small business. Instead, it reaches some compromise wherein the small business can continue the development of a technology for a limited term in exchange for a fee or royalties. This process is called "licensing" and is increasingly common; it is described in more detail in the chapters on IP. For STTR grants in particular, negotiating the licensing framework between the company and the academic partner is usually required.
A university may have confidentiality standards divergent from those of a small business. In general, universities encourage public dissemination of information, while small businesses keep information confidential as long as possible. This can become especially complicated if academic research investigators participating in the SBIR/STTR programs need to publish for their career advancement. Ordinarily, however, this complication can be ameliorated by clarifying intellectual property guidelines and establishing reasonable common ground with the university to protect both parties' interests.
Some amount of customer discovery data should be established prior to applying. These data are very useful for demonstrating the commercialization potential of the technology and for guiding its development toward a useful product. Market research and customer discovery may take one–two months. Commercialization plans should demonstrate an interest in the technology, a well thought-out cost and pricing plan, and a marketing plan. A university may have a number of resources, such as I-Corps or a business school, to assist in the performance of market research or the creation of a business plan.
On average it requires about 100 to 150 hours of sustained effort to complete a proposal, which is usually spread over 2 to 3 months.
In comparison to an R21 or R01 grant, the SBIR/STTR pathway has a stronger emphasis on the composition of the team and the letters of recommendation from investors or stakeholders.