Both the SBIR and STTR programs have three Phases: Following submission of proposals, agencies make SBIR awards based on small business qualification, degree of innovation, technical merit, and future market potential. Small businesses that receive awards then begin a three-phase program.

• Phase I is the concept phase. It lasts six to twelve months and supports exploration of the technical merit or feasibility of an idea or technology.
• Phase II awards may last for up to 2 years and expand upon the Phase I results. During this time, the R&D work is performed. Only Phase I award winners are considered for Phase II.
• Phase III is the period during which a Phase II innovation moves from the laboratory into the marketplace. No SBIR funds support this phase. The small business must find funding in the private sector or other non-SBIR federal agency funding to support continued development.

In the Department of Energy’s Program, Phase I awards are up to $150,000 or $225,000 depending on the topic. Phase I research is conducted over a 9 – 12 month period. Phase II is the principal R&D effort with awards up to $1.5 million dollars over a two-year period. Phase III offers opportunities to small businesses to continue their Phase I and II R&D work to pursue commercial applications of their research and development with non-SBIR or STTR funding. Under Phase III, Federal agencies may award non-competitive, follow-on grants or contracts for products or processes that meet the mission needs of those agencies, or for further R&D.

To succeed in these programs there are a number of prerequisites:

• First, you must have a burning desire to conduct research and development
• AND a desire to develop a viable product that you want to bring to the marketplace ——Just wanting to do research is insufficient – you must want to see that research commercialized or turned into a useful product that you and your firm will promote either directly or through a variety of commercialization strategies.

If you can match your interests and talents with the specific needs of a federal agency you may be able to secure funding to conduct research and development with no strings attached. By applying for and winning an SBIR or STTR award, you will receive funding to conduct the R&D, retain the rights to the intellectual property and have the opportunity to obtain additional funding to continue the development of the technology. The SBIR and STTR programs provide a unique opportunity for scientists and engineers to develop and grow a small business.

But don’t get ahead of yourself – Often, when people first hear about the SBIR program they ask the following question – if I have already developed a solution can I apply? No – the SBIR and STTR programs fund research and development – the purpose is not to retroactively pay a company for development that they may have already accomplished. However, it is assumed that you have an area of expertise and perhaps related work.

The Department of Energy’s SBIR/STTR program office provides the opportunity to increase “private sector commercialization of technology developed through DOE-supported research and development, stimulating technological innovation in the private sector, and improving the return on investment from Federally-funded research for economic and social benefits to the nation.” Small businesses benefit from receiving funding with no strings attached – you do not give up equity in your company, you do not give up rights to the intellectual property, you do not return the funding – as this is not a loan. What is expected is good research that will lead to a commercial product that will benefit the nation.

Now, there are many side benefits depending on how you formulate your research. You can use your proposal as an opportunity to develop a relationship with a university or with a Federally Funded Research and Development Center, referred to as an FFRDC. You can use this as an opportunity to create a firm or as a means of off-setting the cost of research and development in an established small business. Once you win an award the DOE will notify your Congressional representatives – thus raising the profile of your firm at the state level. The DOE will also make a variety of commercialization services available to you at no charge to assist in the successful commercialization of your technology. The benefits of becoming involved with the DOE SBIR/STTR program abound!