A major source of funding for many bioscience companies is a government grant, including SBIR grants. Many companies look to receive this money when starting out because they are usually of a fairly decent size, with a possibility of receiving more money if the first phase of research goes well. Unfortunately, many companies don’t read the fine line in their grant proposals or they may not consider certain conditions that may be placed on their research beforehand. Here are a few tips to make sure your SBIR grant receives thorough consideration and to increase your chances at getting funding.
1. It should be obvious, but fill in all the blanks. It is astonishing how many companies simply do not provide the requisite information. Keep in mind that the government offices screening the applications receive hundreds of applications for each research area. To be able to get through them, an easy way to reject an application is on a technicality. You don’t want to delay any funding for your project until the next round (and have to hope that that research topic is still available) simply because you did not provide a rather easy piece of data to add to your application.
2. In addition to providing the correct information, pay attention to the instructions for format. The format instructions change from time to time. A decent percentage of SBIR grants are rejected simply because the applicant used the wrong font, too many pages, etc. And as a simple matter, you should run your application through spell check and read it twice (might help to get someone in the organization who hasn’t read the application before, so they can help catch misspellings and sentences that run-on or are unclear or nonsensical.
3. If you are not sure whether your research idea would fit into the scope of the grant, call the person in charge of administering the grant. He or she (likely) will not laugh at you, and could possibly provide some helpful tips or at least food for thought in focusing your grant application.
4. Remember that while the government may help you commercialize the technology later, that’s an iffy “may.” Your company is being granted the money for the research with the expectation that if it gets developed enough, you will find a means to commercialize it.
5. Justify your budget. The reviewers need to know how every penny will be spent, and they will need to be accountable to their bosses, the agency and, ultimately, the government, for each cent given out in a grant. Do not assume they will know that anything else “left over” will go to you. Say it.
6. Which leads us to my next point. Do not assume the reviewers will know anything about your methods (or madness). Spell it out in clear, concise language. While you do not need to recount your physics 101 handbook, you do need to provide your precise research methods and what you hope to achieve (and, hopefully, that has something to do with the solicitation). Even if you’ve spoken with several people at the agency about what you would like to do with the grant, they are likely speaking with dozens, if not hundreds, of applicants, and they will not always remember your whole conversation and fill in any holes you have in your application.
7. Be. mindful of application deadlines. They differ by agency, and are spread out over the year every three months. If you’re a day late, you will not be considered. They’re the rules of the game that everyone must follow, and they can’t make exceptions to these (think how much you would scream if you found out a competitor application had another day or two to polish its application).
8. Have someone else read your application for spelling and grammar, and to make sure that what you have written is clear and makes sense. We have a tendency to miss mistakes when we’ve read the same document over and over again, so another pair of eyes will help to correct any errors.
Those are just some basic tips. Good luck to all inventors and companies out there.
Another major issue that is running through the SBIR program is the issue of "what companies are eligible?" One of the requirements is that the entity be majority American owned, which has been interpreted to mean 51% or more owned by U.S. citizens who are "natural persons". That definition cuts out many small businesses that are venture funded. (Usually, the funds will end up with a majority stake, and the funds are typically LPs or LLCs and therefore not "natural persons.") The rules can also technically disqualify companies that should otherwise qualify when their shareholders engage in estate planning (trusts aren't "natural persons", for instance).
I'm not aware of any rescissions occuring, but it's a possibility. I know that the National Venture Capital Association is working hard to fix this, and I wish them a lot of luck.
- Jeff Donohue
[My personal view and not the view of my employer, a biotech that doesn't qualify for SBIR awards no matter how you define "person"...]
Posted by: Jeff Donohue | February 22, 2005 at 08:46 AM