SBIR
The Small Business Innovation Research (SBIR) program is a highly competitive funding opportunity that encourages domestic small businesses to engage in federal research and development (R&D) with the potential for commercialization. It’s an excellent way to secure non-dilutive capital (you don’t give up equity) to develop innovative products or services.
SBIR is a U.S. government program coordinated by the Small Business Administration (SBA) that helps small businesses participate in federal R&D. Eleven federal agencies participate, including:
National Science Foundation (NSF)
Department of Defense (DoD)
National Institutes of Health (NIH)
Department of Energy (DOE)
NASA
Each agency sets its own topics and funding timelines.
Goal: Prove feasibility of your concept.
Funding: ~$50,000 to $275,000
Duration: 6–12 months
Proving the feasibility of your concept—especially for SBIR Phase I—means showing that your innovative idea is technically viable, solves a real problem, and has the potential for commercialization. It doesn’t have to be a finished product yet, but it should be more than a vague idea.
Here’s how to prove feasibility in a structured, compelling way:
🔬 Define the Problem and Proposed Solution Clearly
Problem Statement: Clearly articulate the problem you’re solving. Use real-world data or case studies.
Innovation: Explain what makes your solution novel or significantly better than existing alternatives.
Technical Objectives: Identify measurable goals to prove during Phase I (e.g., increase efficiency by 40%, reduce cost by 50%, etc.)
🧪 Design a Small-Scale Prototype or Model
Develop a minimal viable product (MVP), prototype, or algorithm.
The prototype should demonstrate core functionality, even if it’s not fully developed.
Show that the scientific/technical principles behind your idea work as expected.
📊 Conduct Preliminary Testing or Experiments
Run bench tests, simulations, or proof-of-concept experiments.
Collect quantitative data (e.g., speed, accuracy, energy usage).
Compare your results with baseline data or existing products.
🔁 Document Methods and Results Rigorously
Use a scientific approach:
Hypothesis
Methodology
Results
Analysis
Conclusion
Include data tables, graphs, and summaries in your report or proposal.
📈 Evaluate Commercial Feasibility
Do early market research:
Who needs this?
How big is the market?
What’s the competitive landscape?
Demonstrate you’ve talked to potential customers or stakeholders.
📚 Leverage Existing Research or Partnerships
Cite academic or industry research that supports the core idea.
Collaborate with a university, lab, or research institution to lend credibility and technical support.
📄 Deliverables for SBIR Proposal
Your Phase I proposal should include:
A technical plan to validate feasibility
A work plan with milestones
A budget aligned with your activities
Expected outcomes and how they confirm feasibility
✅ Examples of Feasibility Proof
Concept | Feasibility Activity | Outcome |
---|---|---|
AI-based fraud detection | Simulate algorithm on sample data | 90% accuracy over existing methods |
New battery material | Lab test of chemical stability | Maintained charge after 100 cycles |
IoT water monitor | Build and field-test a basic sensor | Detected leaks with 95% accuracy |
Goal: Further development of the prototype or technology.
Funding: Up to $1.5 million or more
Duration: Up to 2 years
For SBIR Phase II, your prototype development shifts from feasibility to refinement, validation, and preparation for commercialization. This phase focuses on scaling, robustness, user readiness, and real-world testing of your solution.
Here’s how to approach Phase II prototype development strategically:
🔍 Purpose of the Phase II Prototype
You must demonstrate that:
Your technology is viable at a larger scale
It can withstand real-world conditions
It meets performance and user requirements
It has commercial potential
🧩 Review Phase I Learnings
Start by identifying:
What worked technically?
What failed or needs improvement?
What feedback came from customers, users, or reviewers?
Use these insights to set Phase II design goals.
🛠 Redesign or Scale Up the Prototype
Make improvements based on Phase I:
Hardware: Move from breadboard/proof-of-concept to a functional beta unit using production-grade materials/components.
Software/AI: Move from prototype code to production-ready architecture (optimize performance, security, UI/UX).
Biomedical/Chemical: Refine formulation/delivery mechanisms; prepare for preclinical or pilot testing.
Also:
Design for scalability and repeatability
Incorporate user feedback, ergonomics, or interface improvements
🧪 Conduct Robust Testing & Validation
Run performance, stress, reliability, and safety tests under real-world conditions.
If applicable, use pilot studies, beta testing, or field deployment with early users or partners.
Collect real data to support performance claims.
Create:
Test protocols
Validation reports
User feedback summaries
🔁 Iterate Based on Results
Fix edge-case issues, UX/UI flaws, or hardware malfunctions
Ensure interoperability with other systems (e.g., APIs, integration with existing tools)
🧾 Document Everything
Documentation is crucial for both your Phase II final report and future Phase III commercialization:
Updated technical designs, CAD files, source code
Test plans and QA results
User manuals, deployment guides, etc.
Risk analysis and IP strategy (e.g., patent filings, trade secrets)
📈 Support Commercialization Readiness
You should also begin preparing for manufacturing, sales, or licensing:
Identify manufacturing or cloud partners
Develop BOM (bill of materials), cost estimates, and margin analysis
Prepare investor-ready product demo or pilot case study
🧠 Example Phase II Prototype Deliverables
Project Type | Phase II Prototype | Validation |
---|---|---|
AI for Medical Imaging | Optimized model with GUI and HIPAA-compliant backend | Tested on 10k patient scans with 92% accuracy |
Clean Energy Device | Field-ready solar-charged battery prototype | 1000 charge cycles in desert conditions |
Industrial Sensor System | Ruggedized IoT sensor network + dashboard | Deployed in 3 factories with real-time data logging |
Design for manufacturability & scale
Maintain frequent communication with users or customers
Use agile development cycles to refine based on testing
Document every iteration with data, photos, and technical notes
Engage with a commercialization mentor or partner if possible
Goal: Commercialization (no SBIR funding in this phase, but government may become a customer).
Funding: Private investment or government procurement
Must be a for-profit, U.S.-based small business.
≤ 500 employees.
PI (Principal Investigator) must be employed primarily by the business (for most agencies).
Work must be performed in the U.S.
Projects must be:
Innovative with strong technical merit
Address a government agency’s R&D need
Have strong commercialization potential
Start by reviewing agency-specific solicitations (e.g., NSF SBIR topics differ from DoD).
Craft a strong technical and commercialization plan.
Partner with universities or national labs if needed, but ensure your company retains the lead.
Consider using SBIR.gov to search for open opportunities and past awarded projects.
Attend agency webinars or SBIR conferences to gain insights.
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