The federal SBIR program was designed to help commercialize innovative research from small companies. The large federal agencies are required to designate a portion of their budgets to fund these companies – this amounts to over $2B each year! The money is given as a grant – no equity or forfeiture of IP rights is required.
Free money is always good, right? For startups involved with deep technical research, it is a great option. But it isn’t appropriate for all entrepreneurs. The money comes in multiple phases over a period of a few years, so it doesn’t fit for a fast-moving startup. Also, you can get addicted to this free money and lose focus of your core business concept.
For more info, read this article by John Mills. John Mills is the Director of the SBIR Assistance Program. This is a free resource to help companies understand the ins and outs of the SBIR program.