Entrepreneurs and small business owners at Emory who are looking for an alternate source of income can tap into Small Business Innovation Research (SBIR) funds administered by the federal government. In association with some of its largest and most influential agencies, the U.S. government is looking to support innovation and growth by funding the newly seeded businesses involved in research and development.
The SBIR program was founded in 1977 when two men, Roland Tibbetts and Senator Edward Kennedy, recognized the importance of small business growth in the economy. Birthed out of the National Science Foundation (NSF), success in the first few years led to its adoption by the Small Business Administration (SBA) which mandated that government agencies should set aside SBIR funding.
Each federal agency, which have research and development budgets greater than $100 million, are required to commit at least 2.8 percent of these budgets to SBIR funding. The eleven agencies that participate in the program have their own guidelines for acceptance under Congress’s established legislation. They are listed below along with links to their SBIR pages:
Similar to the STTR program, SBIR funding is given out in three phases. Phase I consists of an agency’s attempt to establish “technical merit,” feasibility, and commercial potential of the potential research or products sponsored by the small business. If these three factors are present, the company moves into Phase II which consists of more research and development. Funds usually do not exceed $1 million in this 2-year period. In Phase III, the developed product is prepared for commercialization and, if successful, put into production.
The main difference between SBIR and STTR funding concerns the origin of the entrepreneur. For businesses to qualify for STTR funding, they must be associated with a university. For SBIR qualification, the PI of the project is required to be associated with the proposing small business.
For Emory faculty members choosing between the two programs, the SBIR program offers certain benefits over STTR. For one, more funding is available through SBIR as federal agencies are mandated to allocate a larger portion of their budgets here. In addition, a more diverse selection of agencies have SBIR funding compared to STTR (eleven versus five). These advantages must be weighed against the commitment of a small business owner has for his venture. SBIR PIs must devote at least 51 percent of their time to the supported venture. Because STTR includes an association with a university, faculty entrepreneurs are allowed to keep their employment with the university while serving as PIs.
We realize that these programs and requirements can be confusing and we’re here to help. If you have questions about these programs or how they might assist with your Emory start-up please contact us, in particular Patrick Reynolds (pjreyno [at] emory [dot] edu or 404-727-7241).