Doing SBIR

Doing SBIR
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Doing SBIR
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Doing SBIR - Nelson's Perspective


What is SBIR?

$1B a year, no equity, no repayment. A government subsidy for small-business technology development with two phases for each project. You compete for both phases.


Phase I - $100,000 to show it's feasible;
Phase II - $1,000,000 for a prototype.

After the million, the government may buy a zillion (hah!), or forget you exist and just use your technology royalty-free. Some agencies, like BMDO's SBIR used to do, help with marketing and maybe more R&D money (at least when I ran it).


Winning an SBIR

Chances of winning vary a lot. The raw statistics (only 10 percent of proposals funded for Phase I) tell a misleading story. NSF and Air Force, for example, see vastly different worlds yet claim the same criteria. To keep it fuzzy, the government keeps its SBIR literature vague and mumbles in public. You need a view of the agency and market strategy for using SBIR since most marketable products need a lot more than $1 million. Remember, your strategy must consider the opportunity cost and a source of the real money and business during and after SBIR.
The novice SBIR proposer can either send in cold proposals (which probably have a better chance in SBIR than anywhere else in government) or shop the idea around the government to find some friendly ears who can help shape it. Schmoozing helps a lot in DOD and NASA where a lot of topics are written, and most proposals decided, by low level, technically smart people. To know them is to know them. Since the veteran SBIR company wants the agency to pony up more money, it can plead commercialization. It may work. Since the feds don't see commercialization the way you do, and since they don't know markets, and since they cannot judge marketability claims (even though many think they can), many simply use your commercial story as a rationalization to fund government technology. A credible fantasy may actually get you some SBIR. Just don't deceive yourself about how SBIR money will advance your company's commercial prospects.
Fast-Track, a new DOD approach promises a place near the head of the line for a project with third-party cash. It started in 1996 with 52 of 56 qualified applicants winning. (It is a rigidized version of my approach at BMDO.) Who should try? High-tech start-ups, established companies with new technology, product improvers (especially for DOD and NASA), and research houses seeking a government sponsor. (Even though I discouraged such houses at BMDO, almost all agencies love predictable results.)


More Information  links 

Or consult a grey-head who decided 10,000 SBIR proposals from 3500 companies and gave $300M to 700 companies of whom a dozen went public with a present market cap over $1 billion.



Prepared by: Carl Nelson Consulting, Inc