De-Mystifing National Institutes Of Health Small Biz Grants
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Sample research grant topics cover a full gamut of work including bio-defense, biosensors, nanotechnologies, bioinformatics, behavioral research, computational biology, cell and gene therapy, imaging technologies, genetically engineered proteins to name a few disciplines. Grant money goes directly to the small business. This is not a loan. There is no repayment. You can use these grants as a potential leveraging tool to attract other sources of funding like venture capital, private equity and senior debt borrowing. You do not have to be a Ph.D. or M.D, but must have the expertise to oversee the project scientifically and technically. The small business can submit to different agencies for similar work but can't duplicate projects.
Guidelines and allocation of funding is as follows: 1.) Grants - making up 95% of funding for both the SBIR and STTR - you decide the research and product to be designed or developed, 2.) Contracts - with 5% of funding and for the SBIR program - the government decides the research and general product to fill their perceived need, and 3.) Cooperative Agreements - with less that 1% of the funding - similar to grants.
The Small Business Innovation Research (SBIR) program was created by the Small Business Innovation Development Act of 1982 and reauthorized in 2000 until 9/30/2008. This is a set-aside program of 2.5% of federal R&D funding earmarked for small business concerns with the potential for commercialization. Congress has designated four major goals: 1.) Stimulate technological innovation, 2.) Use small business to meet federal R&D needs, 3.) Foster and encourage participation by minorities and disadvantaged persons in technological innovation, and 4.) Increase private-sector commercialization innovations derived from federal R & D.
Eligibility requirements for a SBIR grant? Your company must be a for-profit U.S. business, employing 500 employees or fewer, including your affiliates. The primary grant "principal investigator" (translated in English - the company applying for the grant) must be a small business concern at the time of the award and for the duration of the project period. Instances have occurred where large venture capital companies have attempted to access this program even though they did not qualify and this is illegal. The small business must be at least 51% U.S. owned by individuals and independently operated or are at least 51% owned and controlled by another (one) for-profit business that is at least 51% owned and controlled by one or more individual.
The Small Business Technology Transfer (STTR) program, created by the Small Business Research and Development Enhancement Act of 1992 and re-authorized through 2009, is a set-aside program of 0.3% federal R&D funding between small businesses and U.S. research institutions with the potential for commercialization and to facilitate cooperative R&D. Congress designated two major goals: 1.) Stimulate and foster scientific and technological innovation through cooperative research and development carried out between small business and research institutions, and 2.) Foster technology transfer between small business concerns and research institutions. Once again, the applicant must be a small business. Subsidiaries of companies with over 500 employees are not eligible. There must be a formal cooperative R & D effort with a minimum 40% participation by small business and a minimum 30% by a U.S. research institution. A U.S. research institution is defined as a College or University, other non-profit research organizations or a Federal R&D center. You will be required to have a formal intellectual Property Agreement, with the Allocation of Rights in the intellectual property and Rights to Carry out with R&D and commercialization.
Both programs offer a three Phase Program process. Phase I award is up to $100,000 for a period of six months for the SBIR or 12 months for the STTR award. The principal goal is to develop a feasibility study on your research for sustainability and commercialization. Phase II award is up to $750,000 over a period of two years for both SBIR and STTR and to be used for full-blown research and development. Phase III award is for commercialization and the use of non-SBIR or STTR funds will also be called into place.
All Research and development for both programs must be performed in its entirety in the U.S. In very rare cases testing can be conducted outside the U.S. It is allowable, however, to travel to scientific meetings in a foreign country. Foreign consultants and collaborators are allowed, but must perform consulting in the U.S.
NIH accepts only electronic applications through the Federal-wide grants portal known as grants.gov and the NIH eRA Commons system. Using the public database, basic award information is found at Tech-Net---http://technet.sba.gov where you are able to get more detail on the programs and how to apply. Also, details in these programs can be subject to change.
For other technical assistance including understanding the FDA process, intellectual property protection, human subjects, animal welfare issues, Medicare and reimbursement, and technology valuation, contact the NIH.
Other participating SBIR/STTR agencies in other areas of discipline include DOD, HHS, NAS, DOE, NSF, DHS, USDA, DOC, ED, EPA, DOT for a total of $2.0 billion FY 2006.
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About the author: Marsha Powers is president and CEO of Powers Financial Group Inc., which specializes in helping companies secure financing for business loans, commercial real estate, mergers and acquisitions, restructuring debt and consulting services. www.powersfinancial-group.com
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