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Home | SBIR/STTR Grants | Phase 1 SBIR/STTR Grants

What is a Phase I SBIR grant?

New businesses and small businesses seeking grant funding, and engaged in research, or research and development, will find no better source than the federal government's Small Business Innovation Research (SBIR) program, starting with a Phase I SBIR grant. SBIR awards, including Phase 1 SBIR awards, are the premier--really, the only viable--option for grant funding for small businesses. Note that there is a lot of misinformation out there regarding the availability of grants for small businesses and start-up businesses. Especially note that the vast majority of these "opportunities" are straight-up scams.

The federal SBIR program, however, is very real and very extensive. Currently, 11 government agencies participate in the program, giving hundreds of millions of grant dollars to U.S. small businesses engaged in research or R&D. Some of the most robust programs are National Institutes of Health (NIH) SBIR/STTR grants for projects centered on health and medical research, and those through the Department of Energy, Department of Defense, and Department of Education.

As stated, the SBIR program exists to support small businesses' efforts to perform research, or R&D, that has the potential to lead to a new, commercially viable product or technology. Through SBIR, and its sister program STTR, the government is funding private innovation.

Phase I SBIR awards (or Phase 1 SBIR awards, the terms are interchangeable)

The SBIR/STTR grant programs are structured in two phases. Phase 1 SBIR grants are the starting point. New applicants must apply for a Phase I SBIR grant first—meaning that, even if you are far along in your research, you can't skip straight to applying for a Phase II SBIR/STTR award. (This is a question our SBIR/STTR grant writers hear a lot, but sorry, there's no way around it!)

Phase 1 SBIR projects are typically for the purpose of showing proof-of-concept of the small businesses's innovative idea. Each federal agency (NIH, DOE, etc.) has its own specific set of guidelines, so it's important to look carefully at the agency you'll be targeting. In general, though, the time duration for a Phase I SBIR project is usually not more than six months. The award amount does not exceed $225,000.

Phase II SBIR awards, and Phase I/II Fast-track SBIR awards

Small businesses that received a Phase 1 SBIR grant are eligible to apply for a Phase II award. Phase 2 SBIR/STTR grants are, generally, for projects up to two years in duration, with award amounts up to $1,500,000. In Phase II, research activities usually center around additional development and validation in preparation for ultimate commercial launch.

Now, while applicants cannot skip straight to applying for a Phase II SBIR grant, it is possible to apply for both a Phase I and a Phase II simultaneously, via what's called a PhaseI/PhaseII Fast-track application. The benefit of applying for both phases at the same time is that applicants can thus avoid the dreaded "funding gap" that comes between Phase 1 and Phase 2 awards when applied for sequentially. In general, Fast-track SBIR/STTR grants are for projects up to 2.5 years in duration, with awards up to $1,725,000.

Be advised, though, that Fast-track awards are harder to win than Phase 1 awards. The biggest consideration in assessing eligibility for Fast-track versus Phase I candidates is whether there are other potential sources of funding on the horizon. A company needs to have investors that have pledged their financial support--even if that support is contingent on research results. If there are no investors interested, a Phase I is probably the better route.

If you need help assessing your small business's eligibility for a Phase I SBIR/STTR grant, or deciding between a Phase I and a Fast-track submission, one of our experienced SBIR/STTR grant writers will be happy to talk with you. You can also read more about 2014 NIH SBIR/STTR grants.

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