Small Business Grants – SBIR and STTR Programs

Small Business Grants SBIR STTRNon-dilutive Grant Funds

The United States government has two significant small business grant programs for Small Business Innovators: SBIR and STTR. So, these small business grants enable companies to fund high-risk research. Both the SBIR (Small Business Innovative Research) and STTR (Small Business Technology Transfer) programs enable small businesses to obtain non-dilutive funds. Those funds are used for research of new, innovative technologies and products. These funds are America’s Seed funds and utilize taxpayer dollars to support the research projects. These funds come with terms and conditions of how the funds are used, tracked, and reported. Small businesses can build their intellectual property within the “terms and conditions” of the program.

Each program has special requirements for how the work is performed. How much has to be done by the small business and what can be subcontracted out. For instance, the STTR program expects small businesses to take the lead and work with a university or other qualified entity.

Services

F.O.C.U.S. Resources works with our clients to develop the budgets, rates, and compliance systems related to the program requirements. We work with clients during the proposal process to optimize the funding and financial information, as well as identify and clarify the content of the proposals. We have served as proposal reviewers for the government.

The key to getting the most out of the SBIR and STTR programs is to understand:

  • How the programs work;
  • What the requirements are;
  • The funding request – allowable costs;
  • What the business will be required to do – terms and conditions;
  • How the programs fit in the overall long-term funding strategy of the firm;
  • What if any impact on intellectual property rights; and
  • Why “terms and conditions” impact how the business operates.

I’ve written a book, SBIR Basics: The Numbers, on the basics of the financial or numbers aspect of the programs. It explains key concepts and terminology about cost types, rates, and audits.  It also includes a list of policies that are the starting point for compliance.

Small Business R&D Programs

The SBIR and STTR programs also use the FAR 31.2 requirements. Each agency has their guidance on the interpretation, application, and performance under those standards.

Day One Compliance

When you receive a government grant, you are required to have in place the business systems, controls, and other requirements of the programs and award document. Those requirements are to be in place on Day 1!  Many organizations are not compliant on day 1 and put their organizations at risk. The risks include:

  • Loss of award,
  • Repayment of funds including interest, penalties, etc.,
  • Civil and criminal penalties,
  • Suspension, and
  • Debarment (banned from contracting).

Services

To prepare to compete for these funds (and there is a lot of stiff competition), you need to understand:

  • who meets the eligibility requirements;
  • how to identify opportunities;
  • what the timeline and submission process is:
  • how to setup your business to pursue funding;
  • how to develop a robust proposal; and
  • what is involved in preparing the proposal budget.

We work with clients to develop these key elements:

  1. funding strategy,
  2. budget development,
  3. cost proposals and systems,
  4. commercialization strategy and plan,
  5. market opportunity,
  6. customer selection,
  7. intellectual property tracking,
  8. recordkeeping,
  9. timekeeping,
  10. the accounting system,
  11. procurement systems,
  12. internal controls – policies and procedures,
  13. asset management,
  14. invoicing; and
  15. other requirements.

Call us for more information on these services. 919.234.3960.

Articles and Podcasts

  • Wrong Client (7/31/2014) by Lea Strickland - The profitability of a company is significantly impacted by its ability to identify both the core client characteristics that make for a good client as well as those that do not fit with your business expertise or require more support from key resources than can be supported by the revenues they generate. For example, last year a company was referred to me and I accepted the engagement. This company was seeking government grant funding to develop technology. It was a one-person operation and the founder did not personally have the technology credentials to do the research and development of the ...
  • The National Single Audit (A-133) Sample Project Results – Good Audit Results May Not Mean Your Audit Measures Up (7/31/2014) by Lea Strickland - The President’s Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency recently completed the National Single Audit Sample Project to determine the quality of the single audits being conducted. The sample consisted of 208 audits conducted between April 2003 and March 2004 and was subdivided into two groups: recipients expending more than $50 million (Large recipient) and those expending between $500,000 and $50 million (Small recipient) annually. The results were as follows: Sample Total Sample Large Recipients Small Recipients Acceptable 115 48.6% Limited reliability 30 16.0% 36.5% 51.8% Unacceptable 63 35.5% 208 Those audits viewed as ...
  • The Grant Proposal Budget: Seven Things to Remember (7/31/2014) by Lea Strickland - The grant proposal budget is an often-overlooked opportunity to improve the proposal’s chances of winning. The budget is a communication tool to the reviewers, just like any other element of the proposal. What the budget does or doesn’t do is let the reviewers know what you do or don’t understand about your research project in terms of cost and resources, how it fits into the total scope of your business financially, and what you understand about the particular rules and requirements of the grant programs and agency guidelines and rules. The proposal budget can become a make or break for ...
  • The Complexity of Business Compliance (7/31/2014) by Lea Strickland - For small businesses, and perhaps businesses of any size, compliance with the rules and regulations of being in business is becoming more and more complex. It’s getting to the point, it seems, that it is almost impossible to be 100% in compliance, mainly because you can’t find all the elements you need to comply with. In addition, when you ARE working to comply, “the system” works against you: The filings and reports you submit get lost by the agencies, and if you are fortunate you sent them certified return receipt with tracking numbers and can provide verification that you sent ...
  • Stay Tuned to the SBIR Program (7/31/2014) by Lea Strickland - The U.S. Senate had a bill last year, and earlier this month the U.S. House of Representatives had a bill (H.R. 5819) to reauthorize and/or “modernize” the Small Business Innovation Research Grant Program (SBIR). The House version died when it reached the Senate, and the Senate is currently working on a new version of a bill. What seems to be the issue? Venture capital. The House bill redefined the “small business” to allow more venture capital investment and still be able to participate in the SBIR program. This raging debate has small businesses and small business advocates pitted against venture ...
  • On-shoring – Keeping Business in US (7/31/2014) by Lea Strickland - The impact of jobs moving overseas (off-shoring) cannot be fully quantified. It includes the impact on employees, the community, tax revenues, and other intangibles. Keeping business in the US isn't an entitlement. It is and will continue to be a function of ability to Compete on something other than price, Generate efficiencies of scale and scope through innovation and application, Develop a core message that conveys the value proposition, Understand market pressures, Influence market perception, Leverage the risks and fears of the market, and Answer bottom-line needs through a value proposition Who is best equipped to make on-shoring the logical, ...
  • Non-dilutive Funding An Important Chapter in A Start-up Story (7/31/2014) by Lea Strickland - Every venture begins with an idea and the resources of the founder(s). Then come other sources, including MCDV (the credit card companies) and our friends, family, and acquaintances. Once we’ve tapped into all those we know well and not so well, we begin to expand into the network of those people known by those we know. We’re looking for funding – refining our story and our ability to persuade and pitch. When we move beyond the friends of friends, however, our approach must get more sophisticated, and we must understand the rules of raising capital. From the documents and the ...
  • Gatekeeper or Dam? (7/31/2014) by Lea Strickland - Have you ever been trying to get a project going or actually working on it and things just aren’t happening? And has that happened to you when it’s a project requested by someone who is in a position to want that project to happen because they have a need for it? The person who needs or wants it may be the CEO of the company, a managing director of a division or a well-placed person in the hierarchy of the federal government system. They know what they want. They’ve asked you to help them make it happen and you get ...
  • Economic Stimulus Fund to Flow to Businesses: Grant and Research Programs Open Taps (7/31/2014) by Lea Strickland - The government is utilizing existing agency structures and federal funding assistance programs to award stimulus funding for research and innovation projects. From the Department of Energy, Department of Health and Human Services and others, projects are in the proposal process, and businesses of all shapes and sizes are looking for part of the action. The big question is, “How prepared are these organizations for the reporting and compliance requirements that are imposed on the organizations as a result of taking these funds?” Have they considered: Job creation or saved tracking Audit and reporting requirements Accounting and business management system redesign ...
  • $100 Billion Savings Target for DOD Spending: (7/31/2014) by Lea Strickland - If you’ve ever spent the day working on compliance with government grant and contract awards from the recipient side, you will understand the following statement: The biggest cost reductions opportunities are in reducing the complexity and variation of requirements on government funded projects. When it comes to increasing costs, I don’t think the biggest cost savings are going to be found on the technical side of government spending, but on the regulation and compliance standards (the “soft side” of doing business with the government). A Conversation with the Government This week has been an exercise in hitting a moving target ...
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