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.