Winning in the SBIR Program without Winning an Award

Regardless of the quality of an innovation, there are many instances where the SBIR program is simply not a fit.  For example, there are times when an innovation is beyond the proof-of-concept phase, and there are times that the reviewers will not consider your innovation as a final product.  Instead, the agency will consider the innovation to be a component of a larger technology product in which the particular agencies find more fundable.  Of course, the dreaded “lack of technical risk” always looms heavily over SBIR proposals and can be the reason that an agency will not fund an otherwise solid product.

Fortunately, there are other ways to benefit and possibly develop capital through the SBIR program and some of its agencies. The website provides access to a searchable database of funded solicitations along with information about the awardee and an abstract of the innovation.  This is beneficial in a variety of ways.  Initially, it provides valuable insight into what the agencies interests are, which can be useful in guiding the innovator to develop an SBIR strategy or illuminate the fact that the SBIR program is not a good fit.  Yet, there is more to this story.  A company funded with an SBIR Phase I has some distinct advantages.  Foremost, the awarded company has a concept that an agency found interesting along with a team to develop it.  Additionally, the awardee has money with a path to a Phase II award, which may result in a larger bucket of funding.  This is the point where you shift from actively seeking an SBIR award to benefiting from the program by being either a partner or a contractor for an SBIR awardee.  From an icebreaker perspective, there could be additional value in researching the innovation to ascertain if it ever made it to market.  This information could be an interesting lead-in to a discussion with the awardee and help you understand what they may need from you.

The logic is straightforward.  If you are past proof-of-concept or lack technical risk, you may have a component that you can develop quickly and that the awardee needs to commercialize their product/system.  Also, you may have IP that the awardee can license, thereby accelerating the development process.  Similarly, you may have the expertise to assist in the development of the basic research to assist the awardee in scale up, prototyping.  Finally, through your own quest for angel investment, you may have contacts to support their plan for follow-on funding, which may be more attractive to angels, given the awardee has won, at least, a Phase I.  The possibilities for compensation mechanisms are wide and varied, ranging from a consulting contract to some sort of equity stake in the awarded company, which is a discussion outside the scope of this article.  Your friendly neighborhood SBTDC Technology Commercialization Counselor can assist with these relationships as well.

There is no shame in NOT being an SBIR awardee, and it does not make you any less of an innovator.  While winning a Phase I is exciting, your job as a small business operator is to create value for the shareholder, and you can create that value by utilizing the SBIR program without ever submitting a proposal.  While developing partnerships and B2B relationships is not easy, consider the time it takes to create a winning proposal (the SBA suggests starting 10 weeks out).  Rather, if you spent 10 weeks diligently building a network of awardees, you may find the time to be more fruitful.  In an interesting twist, you may indeed find the missing piece to your future SBIR proposal.

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