September 18, 2009 in SBIR/STTR News

Free Money Eligibility

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SBIR and STTR awards are sometimes described as “free government money”.  People hear this and immediately start lining up with their hands out. Not so fast. Just because the money doesn’t have to be repaid (like a loan), it doesn’t mean that it is automatically given to every person who wants it.  Before you too jump in line with your hand out, make sure you qualify—no need to spend a lot of time, only to find out down the road that you are ineligible. 

First, SBIR and STTR awards are for businesses—not individuals.  Even then, they are not appropriate for every business.  The awards are intended for serious, risky research with a high potential for commercial success—meaning, customers will actually pay you money for your innovative, end-product.  Obtaining an award is a competitive process—make sure you CAN submit before you spend time preparing a proposal. So what are these qualifications?  Well, here is a list of the minimum qualifications—specific agencies might have additional qualifications or expectations:

  1. Business is set up For-Profit
  2. No more than 500 employees in the business (including all affiliated entities)
  3. Satisfy ownership issues of the business:
    1.   Business must at least 51% owned and controlled by one or more individuals who are U.S. Citizens or U.S. Permanent Resident Aliens
    2. Business must be at least 51% owned and controlled by another  small business that satisfies the above “a” requirement 
  4. Business and proposed research location must be in the U.S.
  5. The Principal Investigator (PI) must be credentialed (education and experience) in the area of research that the business is proposing—must demonstrate on paper that he/she can lead a formal research study
  6. The PI must be employed fulltime (usually at least 51%) by the company (NOTE: sometimes for STTR, the PI can be employed by the company OR the partnering Research Institute)
  7. The proposed research must address a specified agency topic or area of research interest outlined by the soliciting agency—unsolicited proposals are NOT accepted.

Those are the minimum qualifications.  If you DO qualify and you DO have an innovative idea that can realistically advance the mission of an agency, then submitting a proposal might be appropriate for your company.  Talk to one of the ATDC Startup Catalysts specializing in SBIR (Connie Ruffner, Julie Collins, or John Mills) for more details. 

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