Each year, by Federal law, and with oversight of the SBA, Federal agencies who spent over $100 million on externally funded R&D in the prior year must set aside 2.5% of their external R&D budget in the current year for providing, under the protective legislation of the SBIR Act, the funding of small business technology development from design to prototype to commercialization.

For GFY2007, this small business set-aside represented about $2.5 billion [yes billion] dollars!

1. Dept. of Agriculture
2. Dept. of Commerce (NIST and NOAA)
3. Dept. of Defense (Army, Navy, Air Force, DARPA, OSD, SOCOM, MDA, CBD, DTRA, NGA)
4. Dept. of Education
5. Dept. of Energy
6. Dept. of HHS (NIH, FDA, and CDC)
7. Dept. of Homeland Security
8. Dept. of Transportation
9. Environmental Protection Agency
10. National Aeronautics & Space Administration
11. National Science Foundation

The agencies select the technical topics (problems or problem areas for which they are seeking solutions) for their annual (or semi-annual or even more often) solicitations, publish them on their web sites, and provide guidelines for proposal content and submission. Opening and closing dates for agency solicitations are staggered throughout the year so that there are always open solicitations.

Small businesses search the topics for a match with their capabilities, and prepare proposals for solving the government problems with innovative applications of their technology. Proposals are submitted to the originating agency for evaluation.

The agencies review the proposals, and rate and rank them according to the degree of originality and innovation, technical merit, credibility of the proposing team, and the future market potential. The best proposals, on average one of every seven, are funded. Awards are issued in the form of a grant or contract. SBIR awards are not loans. There’s no interest to pay and no equity to give up!

1. Be American owned (>50%) by individuals, US located, and be independently operated
2. Have no more than 500 employees
3. The principal researcher is an employee of the business
4. Be organized for making a profit

Awards are made averaging $100,000, for between six to twelve months of effort, to support both a feasibility study and the design of the solution to the problem posed in the solicitation.

Phase II -- Prototype Development.

Awards averaging $750,000, for as many as two more years, expand meritorious Phase I designs to "proof of concept". During this time, along with the prototype development work, the stage is set for commercialization. Only Phase I award winners may be considered for Phase II.

Phase III -- Commercialization.

During this period the developer moves the innovation from the laboratory into the marketplace. No SBIR set-aside funds support this phase. The business must find funding either from the private sector, or from non-SBIR government sources.

Experience makes the difference. "Coach" Fred has been involved with over 800 SBIR proposal submissions, of which approximately 50 have been Phase IIs. Of those, his two companies and dozens of clients have received over 200 Phase I and 35 Phase II awards. His Phase III commercialization funding exceeds $18 million.

As your SBIR Coach, Fred Patterson will guide you in the process of producing clearly articulated well-written proposals, and will become your Competitive Edge to winning an SBIR award.