Not all grants are created equal. When it comes to funding R&D for creating technologically advanced products, small businesses can apply for SBIRs, RO1s, as and many other grants to fund their projects. However, SBIRs and other company grants are very different from RO1s and other traditional academic grants. For starters the payline, or percentage of grants that get funded, is 2x to 4x higher for SBIRs than for R01s and other academic grants.
The big differences:
- You can charge profit on SBIRs!
- Paylines are higher: 2x to 4x higher funding rates
- SBIRs convert to products developed, rather than a research publication
The SBIR (Small Business Innovation Research) program focuses on product development rather than basic or advanced research. The SBIR Program encourages small business organizations to seek financial support from federally funded Research & Development programs. To date, the SBIR program is not available for academic institutions or non-profits. The goal of the program is to secure generate a product at the conclusion of a Phase II award and a proof of concept for a Phase I. The SBIR uses its highly competitive awards program to fund significant and innovative products that are backed by strong teams, supported by an excellent environment for success and have a clear and cogent approach to realizing product milestones. Thus, the final outcome of an SBIR grant, acquired through NIH or DoD, is a product milestone or a launched product as opposed to an academic grant where the end goal is a publication.
As part of a wider set of Funding Programs, winning SBIRs have strong partners within academia as an effective strategy for collaboration. However, winning SBIRs also require support from industry via formal co-development efforts and letters of support provided by physicians and clinicians corroborating the critical unmet medical requirements and the importance of the proposed product. On the other hand, academic grants are almost always collaborated with other academicians, although industry collaborations do occur.
In contrast, RO1s and other academic research grants focus on R&D activities associated with novel discovery of ideas and advancements therein, as per the NIH mission.
Another big difference is charging a profit. The SBIR program also allows small businesses to charge a profit (7% max, of total grant amount) to the government for the commercialization risk they are taking on via the innovation. Bonus!
The SBIR program is highly focused on stimulating technology-based innovation in the life sciences. It is in fact congressional law that every year all federal agencies with R&D budgets exceeding $100 million allocate 3.2% of their budgets to the SBIR program. For the NIH, this amounts to about $1 billion a year for small business awards.
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