Venture capital funding for startup companies in the U.S. has declined during the past six months, according to the Wall Street Journal. The reticence to invest in new ventures is primarily due to the catastrophic effects the COVID-19 pandemic has had on our economy. Investors are simply finding it far too risky and have chosen to put their portfolios into more established companies and technologies.
With the possibility of the pandemic lasting into next year, that situation doesn’t appear to change any time soon. But this doesn’t mean you don’t have a very good option available to you. Now could be the best time to apply for an SBIR/STTR (Small Business Innovation Research/Small Business Technology Transfer) grant.
A lot of small companies wrongly assume that they don’t qualify for funding because they’re not established enough. According to the 2017 SBIR/STTR Annual Report (the most recent year with published data), 61 percent of all Phase I proposals awarded grants from the National Science Foundation that year were from first-time applicants. That means small companies with early stage technologies have a good chance of securing the funding they need to refine and test their products, which can ultimately help make them more attractive to venture capital funding.
Eleven separate federal agencies participate in the SBIR/STTR program:
- Department of Agriculture
- Department of Commerce
- Department of Defense (including all four branches of the military)
- Department of Education
- Department of Energy
- Department of Health and Human Services (including the National Institutes of Health)
- Department of Homeland Security
- Department of Transportation
- Environmental Protection Agency
- National Aeronautics and Space Administration
- National Science Foundation
The SBIR/STTR funding program is perhaps now, even more than ever, the most instrumental vehicle for creating and promoting innovation in the U.S. One could argue that by bringing funding to small businesses, which allows them to hire employees and further their research and commercialization efforts, the program is helping new, important businesses continue to have a chance to thrive. It also benefits universities by providing funding through what’s known as a sub-award (pass-through), and can bring additional funding to contract research organizations, consultants, distributors and manufacturers for lab and office supplies, and more.
If you have an idea for an innovative technology — and you’re struggling to find the money you need — don’t be discouraged because VCs think your venture is too risky. The SBIR/STTR program is an excellent option.
If you would like guidance to help you get through the proposal preparation process , feel free to check out the webinars on the BBCetc website (bbcetc.com) or contact us directly at firstname.lastname@example.org to set up a phone call.