A Government Guide to SBIR
Everything you need to know about the Small Business Innovation Research (SBIR) Program
SBIR for Government (A summary)
What is SBIR: Small Business Innovative Research (SBIR) allows the federal government to fund the development of solutions to their needs.
Why SBIR may be interesting:
- Through the SBIR program you can submit a need that you/ your program has, and small businesses around the country will propose solutions to it (almost always technology products).
- Solution development funding comes from someone else’s budget.
- There are over 50,000 existing SBIR solutions that you can buy quickly.
Historical issues with the program:
- The long lag between when an SBIR is started and when a solution is delivered creates lots of problems:
- The officer that started the SBIR may have rotated out.
- Mission priorities may have shifted.
- It is difficult to align funding to eventually buy the solution.
- The company creating the solution is frequently developing “in the dark” (without much input from the end user) leading to solutions that don't actually solve the original need.
- NOTE: Each of these problems can be mitigated through planning.
What you are committing to:
- When you submit a need to the SBIR program you are committing to very little.
- But if you do very little you probably won’t get the solution you’re hoping for
How to do SBIR “right”:
- Know that the solution probably won’t be ready for ~ 3 years:
- An exception is the AFWERX Dual-Use (AFX) program that can deliver solutions in 12 months.
- You will need to help the company building the solution.
- You need to plan and budget for the eventual purchase roughly when a winner to your SBIR is announced.
Table of Contents
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SBIR in Four Bullets and Whether You Should Read the Rest of This Guide
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Is SBIR a good way for you to find a solution?
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The SBIR process and your role in it
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Discussion of specific steps in the SBIR process
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Purchasing SBIR funded solutions
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A guide to Start-ups and How they are different from traditional government contractors
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Appendix
Why it's Worth Reading
Small Business Innovation Research (SBIR) is an extraordinary funding source that:
- Can fund the development of bespoke solutions to your needs.
- Doesn’t use any of your program/office’s money for the development of those solutions.
- Has funded over 50,000 technology solutions that you can rapidly buy and use.
But, most government employees we talk to either haven’t heard of SBIR, or think that it is just for people in acquisitions. But nothing could be further from the truth. SBIR is there to help program managers and the people in the trenches doing the work get the tools that they need but can’t buy off the shelf.
So in this guide we try to provide a pragmatic perspective on how you can leverage SBIR to get innovative tools that will help you and your teams.
Download A Government Guide to SBIR
SBIR in Four Bullets and Whether You Should Read the Rest of This Guide
- R&D for the little guy
SBIR is R&D for everyone. The government is investing billions into curing cancer and going to Mars but if you just need a solution to make your communications network better or a little research into a disease SBIR may be right for you. - Spend other peoples’ money
The funding for SBIRs come from each agency’s R&D budget. As such funding solutions through SBIR is free to you. - Lots of “off the shelf solutions”
SBIR has already funded over 50,000 technology solutions so before you spend the time and money to get your own SBIR solution rummage through the SBIR library HERE. - Rapid acquisitions
SBIR funded technology can be sole-sourced making it much faster and easier than buying non-SBIR solutions.
Why SBIR Exists
The government needs lots of things, most of which are provided by commercial vendors, but when there is no “commercial off the shelf” solution the government can use SBIRs to fund the creation of a solution.
For interviews with previous winners about how SBIR has impacted them see HERE
There’s an existing solution (buy it) | There’s a solution that is “almost right” (Modify a near solution -AFWERX SBIR candidate) | There is no existing solution (Make a solution -Traditional SBIR candidate) | |
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Gov and industry have the same need |
E.g. Trucks, computers, and IT services (Buy from any vendor) |
E.g.: Data analytics tools that need modifications to accommodate Gov data sets; or hardware that needs to be ruggedized to meet the DOD’s durability needs (Fund modifications to a commercial solution) |
E.g.: increasing energy density/stability in chemical batteries; an alternative to li-ion batteries for storage and transfer of power (Fund the creation of a solution) |
Gov has a unique need |
E.g.: Weapons and intelligence services (Buy from a defense contractor) |
E.g. Communications & positioning technology that doesn’t require satellites; disabling drone swarms using electro-magnetic energy (Fund the creation of a solution) |

America's Seed Fund (SBIR/STTR) is more than accessing free non-dilutive R&D funding, it is an opportunity to de-risk cutting edge technologies, it’s validation for your startup, an opportunity to develop a federal revenue line and to join an ecosystem of innovative firms solving moonshot problems for the American public.
Whether you Should Read the Rest of This Guide
If you are:
A PM or contracting officer looking for tech* |
YES!
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A frontline operator that needs a solution |
YES!
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A tech scout |
YES!
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Just interested in innovation programs |
YES!
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You are looking for foreign co. or large co. tech
|
NO!
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Anyone else |
NO!
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Is SBIR a Good Way to Find a Solution
Is SBIR a Good Option for You
There is a lot of energy around SBIR and it can deliver a bespoke solution to your exact need. But if you can’t answer YES to each of these questions it probably isn’t right for you
Are you looking for a solution to a need? It all begins when you need something, whether it comes:
- Top down: A new mission requires a new solution.
- Botton up: You get a need from the frontline.
Do you understand the need (root and surface)? To get the right solution you need to deeply understand the need:
- Rigorous customer interviews and observations.
- Clear understanding of the Who, How, What, and Why of the need.
Have you conducted a thorough review of the commercial solution space?If you can find an existing commercial solution buying it will almost always be faster, better, and cheaper than building your own:
- What do your commercial counterparts use.
- Are there any solutions in Gartner, CrunchBase, etc.
If you can find a commercial product that is “almost” right, and you are in the Air Force the AFWERX Dual-Use (AFX) SBIR is an excellent option
Have you conducted a thorough review of the government solution space? Government agencies share a lot of needs, learn from how other groups have solved it:
- Who else has the same need.
- How are they addressing it.
- Have you looked for existing SBIR funded solutions.
Could someone develop a solution for $500K-1M? Developing solutions is expensive, and SBIRs are relatively small. Could someone realistically deliver a solution in budget:
- For the average SBIR funding for your agency see Page 13.
Are you willing to wait 2-3 years for “the right” solution? The SBIR program and solution development takes time. Can you wait?
- If you need a solution faster consider using SBIR to get the “right” solution and put a bandaid solution in place till then.
- For SBIR timelines for your agency see Page 14.
Are you willing to work with the team that is building the solution? If you’re using SBIR you’ve probably got an unusual need, so you will have to spend some real time with the team developing the solution. See page 28.
Can you “allocate” $10M+ to buy the eventual solution? SBIR funds solution development but you will need to use your money to buy the eventual solution and if you start looking for cash when the solution is ready you’ll add another 6 months of delay. So identify the cash to buy the solution when someone wins your SBIR.
Is there leadership and contracting buy-in to develop and buy a bespoke solution? Doing SBIR right takes your time and eventually the program’s money so make sure that leadership and contracting/ acquisitions are bought in from the start.
Does Your Agency’s SBIR Provide Enough Money to Develop a Solution
Can SBIR Deliver a Solution in Time
The SBIR Process and Your Role in It
Is There a Previously Funded Solution?
Agencies share many needs and with roughly 50,000 solutions already funded there is a good chance that you can find interesting existing solutions to search see HERE.
The Generic SBIR Process
SBIR topics are collected |
The teams that administer the SBIR program develop their own topics and collect suggested topics from their Agency/ Service. |
An SBIR topic is released |
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Get proposals and select a winner |
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Phase I |
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Phase II
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Phase III |
Production and sales to government at scale. |
What You Should Do During The Generic SBIR Process
Submit a topic: Once you decide that you can’t find a solution in the market and that you’re willing to be part of a 2-3 year development process find the team that administers the SBIR program and send them a description of your need (see P 46/47).
Work with the SBIR team shape the topic: Work with the team that administers SBIR in your agency to improve your articulation of your need.
Answer questions during the proposal process: Once the SBIR topic has been published companies may send questions to the SBIR team about it which are then forwarded to you. Send answers to the SBIR team.
NOTE: If a company engages you directly don't answer them and instead direct them to the SBIR team (see P24)
Work with the Phase I winner(s): Once a winner has been selected you can and should engage with the winner directly. For more details on the typical support they will need see page 28.
Start identifying budget and engaging contracting: You will need money to buy the eventual solution so start identifying budget and working with contracting around the time a winner is announced. For more details see page 26/36.
Work with the Phase II winner(s): Much like in Phase I you should be ready to support solution development in Phase II.
Finalize budget and contracting: Purchasing SBIR funded technologies is easier than a typical acquisition but it still requires money and the contracting team. Begin engaging them during the Phase II so that you are ready to buy as soon as the solution is complete. For more detail see pages 26/36.
Support the acquisitions: Even with good planning there are inevitably small issues that come up during the acquisitions process. Be ready to convene stakeholders and answer questions so that the procurement goes quickly and smoothly.
The Dual-Use (AFX) SBIR Process
(Air Force Only)
An SBIR topic is released |
Dual-Use solicitations are typically released with the traditional SBIRs. |
Get proposals and select a winner |
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Phase I |
Winners have 3-4 months and ~$50K to find an Air Force customer with the need they identified and get a letter of support from that customer validating the need and solution (at least conceptually). See P 29. |
Phase II
|
The company has 12 months and ~$750K to evolve their existing technology to meet the specifics of the Air Force’s need.* |
Phase III |
Production and sales to government at scale. |
* The amount and duration is evolving so check with the AFWERX team
What You Should Do During an Air Force Dual-Use (aka AFWERX) SBIR
Submit a Focus area: In Dual-Use companies identify their own need however there is usually a list of “focus areas” that alert interested companies to needs in the Air Force. Make sure your need is on this list.
Create awareness: Typically the only companies that read SBIR listings are existing government contractors, so if you want a fresh solution from a fresh company you’ll have to help get the word out. For more detail see Page 27.
Support proposal process: While fresh companies have fresh solutions they generally get scared off by the SBIR application. While you can not help them directly you can refer them to external resources. See our Service Provider’s Guide.
Work with the Phase I winner(s) on their MOU: Phase I focuses on validating that one or more USAF end users are interested and capturing that interest in an MOU. For more detail see page 29.
Start identifying budget and engaging contracting: You will need money to buy the eventual solution so start identifying budget and working with contracting around the time a winner is announced. For more details see page 26/36.
Work with the Phase II winner(s): Phase II “customers” are required to provide a Technical Point of Contact (TPOC) to participate in Phase II development and validate milestones.
Finalize budget and contracting: Purchasing SBIR funded technologies is easier than a typical acquisition but it still requires money and the contracting team. Begin engaging them during the Phase II so that you are ready to buy as soon as the solution is complete. For more detail see chapter 26/36.
Support the acquisitions: Even with good planning there are inevitably small issues that come up during the acquisitions process. Be ready to convene stakeholders and answer questions so that the procurement goes quickly and smoothly.
Discussion of Specific Steps in the SBIR Process
Thoughts on Writing Good Topics
If you write a high quality SBIR topic the chances that you will get a high quality solution are much higher
For our analysis of current hot topics see HERE
For our analysis of topic trends and predicting them see HERE
Outcomes oriented:
- If you want truly novel and exciting solutions then just explain what outcome you are trying to achieve and let American ingenuity do the rest.
- If you include lots of constraints and requirements about “how” to achieve the outcome you may cut off interesting solutions that you wouldn’t have thought of.
Explain the use case:
- The government uses things in ways that commercial customers never would.
- If a company doesn’t do government work already it can be difficult to learn about how a piece of equipment will be used.
- So describe how you will use the solution and what the need looks like in your operational environment.
Identify constraints:
- Let people know if it has be used in unique circumstances:
- Deployable on a secure system.
- If it has to operate in space, or in sub-zero environments.
- It may be obvious to you but if it’s a requirement then let people know.

To leverage the $140b/year in private technology investment, and maintain U.S. national security technological superiority over global competitors, the USG will need to empathize with the small business (SBA) world. Unlike traditional USG vendors, SBAs don't have Fed-focused legal, contracts, and lobbying teams to ensure 100% compliance with thousands of pages of FAR and IT Requirements (or have them re-written). Federal SBIR endusers and contracts officers need to accommodate and empathize with a lesser-sophisticated SBA-base to keep the U.S. at the top of the tech food chain. Make instructions more "plain language" (ask your grandmother to interpret them!); communicate in a business-like manner (i.e. respond in <48 hours); and when there are problems, seek to remedy rather than disqualify. Successfully engaging the domestic SBA base is a win for national security, a win for the taxpayer, and a win for the economy.
Answering Questions and Talking to Industry
Many government employees worry about talking to contractors, but if you want to get a high quality solution you’ll need to. So follow these rules:
If the RFP has not yet been published: If no RFP or other written solicitation has been published you generally can talk to any company you want to:
- Generally if you are receiving information and not giving it you are safe.
- If someone wants feedback on their product you can give it. But keep in mind that you should give feedback on making their product better, not making their product more likely to win an SBIR.
- Don’t give them details about an upcoming solicitation.
If the topic is in pre-release (DOD only): During pre-release interested companies can ask questions about the need you have and the solution they are suggesting:
- Questions should come to you through the SBIR office.
- If a company reaches out to you directly refer them to the SBIR office.
- Send your response to the SBIR office not the company.
Otherwise don't talk about your need, solutions, or anything related to this process during pre-release.
If there is a open solicitation (RFP) for your need: This is simple Don't TALK TO ANY COMPANIES ABOUT THIS SBIR. Don’t talk about the need, solutions, the process, anything. If someone asks you tell them you’ll get back to them after an award is made and refer them to the SBIR office.
Once the SBIR has been awarded:
- You can now go back to talking to companies like you could before the RFP was released.
- But don’t answer questions about the evaluation process or the winner. Let the SBIR office handle process issues.
NOTE on AFWERX SBIR:
Because companies identify their own needs you can engage with them more freely (e.g. you can provide letters of support when the RFP is out).
If you’re unsure about how to answer a question, ask legal/ethics.
- See FAR 15.2
- See FAR 1.102-2
Prep Budgeting and Contracting So You Can Buy as Soon as Possible
To ensure there is money ready when the solution is ready you should start engaging in the budgeting process roughly when a Phase I winner is selected.
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FY 21 Agency budget process |
SBIR timeline
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What you can do
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Sept 2018 |
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Phase I winners selected/awarded
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Engage your leadership about your budget request
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Dec 2018 |
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Winner performs Phase I
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Mar 2019 |
Sub-agencies (commands) and offices make their FY 21 budget |
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Request FY 21 money to buy the solution
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Jun 2019 |
Agencies develop their FY 21 budgets |
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Sep 2019 |
President and OMB review FY 21 budgets from agencies |
Phase II selection and winners begin
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Check if your budget request was included |
Dec 2019 |
Feb 1: President sends budget request to congress |
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Mar 2020 |
Congress reviews/ negotiates the budget |
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Jun 2020 |
Congress passes a budget |
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Sep 2020 |
FY 21 starts |
Solution is ready and can be purchased |
Purchase SBIR solution with dedicated (budgeted) money |
If You Want Innovative Solutions You Need to Reach Innovative Companies
*https://fas.org/sgp/crs/misc/R44307.pdf
How to Reach Innovative Solutions Providers
If you want new solutions from new companies you’ll have to do some outreach.
Government resources | |
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Army |
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Air Force |
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Navy |
NavalX |
SOCOM | SOFWERX |
DOD |
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Helping Winners
Once a winner is selected, especially a winner than has not worked with the government much, you can do a lot to help them.In turn this will help you get the best solution possible.
Admin:
- Access to your facilities (e.g. CAC cards).
- Access to a government lap top if needed.
- Government email accounts.
Access to users: Help identify end users and schedule time with them.
Access to data:
- Identify data sets that are useful.
- Navigate access to that data.
Access to leadership:
- Identify stakeholders that will have a voice in an eventual purchase.
- Help schedule demos with leadership.
Access to contracting: Once Phase II starts you should have quarterly check-ins between you, the company, and contracting to plan the eventual purchase.

SBIR Phase III objectives for small businesses is to pursue commercialization of technologies resulting from Phase I/II R/R&D activities and easily address the President’s Management Agenda (PMA) Cross Agency Priority (CAP) goal to improve the transfer of federally-funded technology from the laboratory to the marketplace. Furthermore an ability for small businesses to diversify and generate a revenue stream from government contracting endeavors."
Understanding and Filling out the Dual-Use (AFX) Memorandum of Understanding (MOU)
What is the MOU: The MOU is a form letter that a command fills out which validates:
- That they are interested in the company’s proposed solution.
- That they will help (non-financially) the company develop any additional functionality needed.
- That they will help with solution testing and end user engagement.
Why is it important:
- One of the strengths of the Dual-Use SBIR is that the need is not specified which creates tremendous flexibility for the Air Force and the companies that apply.
- One of the weaknesses of the Dual-Use SBIR is that the proposed customer may not actually like the solution or care about the need that much.
- To address this weakness companies spend their Phase I looking for potential customers and if found, getting MOUs from them.
- A signed MOU is a prerequisite for getting to Phase II.
What am I committing to:
- Not much.
- At its core you are committing to help the company build their solution so:
- Helping with their admin.
- Accessing to end users.
- Giving feedback on their solution.
- What you are NOT committing to:
- Buying their product.
Who needs to sign it:
- Basically everyone needed for customer research and product development. So usually:
- The end users (technically this is the only needed signature).
- The commander.
- Data owners.
- Testing and evaluation.
- Budget, contracting, and legal.
- If you are serious about getting the MOU signed in time you will want to assign a company grade officer to project manage the process.
Where can I get more info:
- AFWERX is the authority on the MOU.
- sbir@afwerx.af.mil
Purchasing SBIR Funded Solutions
Buying Solutions With and Without an SBIR
Buying SBIR funded solutions is much faster than typical acquisitions because you don't have to compete the RFP (you can “sole source” the solution) and because you don't have to write up a full RFP.
Buying without an SBIR
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Buying with an SBIR
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Write a description (the RFP) of:
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For more see:
https://www.sbir.gov/tools
Recommended Contract Vehicles
- While “sole sourcing” makes the acquisitions process much faster you still need to create a contact between the government and the company.
- You can use any contractual mechanic that you like.
- We strongly recommend using an “other transaction” contract vehicle.

Where to Get the Money
Ideally you requested money during Phase I, but even if you didn’t there are a lot of places to get money.
Allocated budget:
- As discussed in the Chapter 2 and 3 the “correct” way to get SBIR funding is to request it during the budgeting process.
- Of course that was two years ago so that ship may have sailed.
End of year funding:
- At the end of the fiscal year there tends to be a lot of extra federal money looking for a home.
- End of year contracts are generally issued in late September so start talking to your contracting office in June or July to let them know you are looking for money.
Other programs:
- Because budgets are created two years in advance they frequently don't reflect operational reality by the time the fiscal year actually shows up.
- As such, programs frequently have unused budget.
- Find a program that would get some benefit from the technology that you want to buy and see if they will give you budget.
The color of money:
- When congress authorizes agency budget the dollars are assigned to different uses:
- Operations and Maintenance (O&M): Money to “do the work.”
- Research and Development (R&D): Money to develop new tools.
- You may have additional flexibility in which types of money you can can use to buy SBIR funded tech.
- So even if your program is out of one kind of money see if other types are available.*
* Budgeting is complex so we recommend speaking with your contracting team, but be sure to point out that there is more flexibility than with conventional contracts
A Guide to Start-ups and How They Are Different From Traditional Government Contractors
The Characteristics of a Startup
Start-ups tend to have innovative ideas and can generate solutions quickly.However they tend to be resource constrained which can make them challenging to work with.
They are doing something new:
- Almost by definition a startup is building a product that does something new.
- Which means they tend to have innovative ideas.
- It also means that they have no playbook to follow so live in constant uncertainty.
- Because of this uncertainty they are constantly:
- Making hypotheses about what it will take to be successful.
- Testing those hypotheses.
- Shifting away (pivoting) from hypotheses that fail.
- Doubling down on hypotheses that prove true.
- All the testing and pivoting can make start-ups seem chaotic.
They are resource constrained:
- Every startup we know dreams big.
- Every startup we know has one tenth of the budget and staff that they need.
- While this scarcity drives incredible stress it also creates ruthless efficiency and the ability to develop solutions on a shoestring.
Their “Holy grail” is product market fit (PMF):
- The goal of every startup is to create something people will pay for and that means:
- Creating the right product (features, functions, etc).
- Creating the right pricing model.
- Creating the right marketing and sales model.
- If a startup finds PMF they can get lucrative investments.
- If they can’t they pivot until they do, or go bust.
For a deeper dive on SBIR and startups see HERE
Comparison of Startups to Other Vendors
The choice to whether to work with a startup or a traditional government contractor comes down to whether innovation or customer knowledge is more important to delivering a solution.
The most important factor for success |
Who can deliver |
![]() |
Commercially focused Startup:
Innovation teams within established government contractors:
Established government contractors:
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Start-up Tech Development
Every start-up moves at their own pace, but the amount of money they have received from investors is a reasonably good benchmark for how developed their solution is.
Funding Round |
Funding Amount |
Tech development |
---|---|---|
Boot strapping |
N/A |
The company likely has no functioning solution and is just learning about their customers. |
Friends and family |
$10-50K | The company likely still has no functioning solution and is using mock-ups and other simulations of their proposed tech to have deeper customer discussions. |
Pre-seed | $50-200K | The company likely has a proof of concept (POC) that allows them to test unproven technical issues in their solution. |
Seed | $500K-1.5M | The company likely has a working solution (minimum viable product), but that solution has an extremely limited feature set. |
Series A | $5M+ | At this point the company generally has a mature product but:
|
Series B | $10M+ | At this point the company has a fully mature product that is ready to be sold at scale. |
Series C | ? | The product is mature and may be evolving to meet the needs of new customers and industries. |
Start-up Sales Development
There are two critical dimensions to start-up maturity, the maturity of their solution, and the maturity of their sales capability
Funding Round |
Typical Revenue |
Sales development |
---|---|---|
Boot strapping |
$0 |
The company is focusing on understanding the customer:
|
Friends and family |
$0 | The company is collecting names and contact information for their customers. |
Pre-seed | ~$100s/mo | The company may be charging a few “pilot” customers but there is no meaningful revenue. |
Seed | ~$1Ks/Mo | The company has a repeatable process to get small customers. |
Series A | ~$10Ks/Mo | The company has a repeatable process to get mid-sized customers. |
Series B | ~$100Ks/Mo | The company has a repeatable process to get large-sized customers (enterprise sales). |
Series C | ? | The company is selling and scaling in a way that indicates that they will be a market leader. |
SBIR Funded Products Can Struggle With Sales
While commercial and SBIR funding amounts are relatively similar, commercial funding is based on the company’s technical and sales maturity, while SBIR is only based on technical maturity, until it’s too late
Commercial funding:
SBIR funding:
Confidence That You Will Buy, Speed and Quality
Most SBIR programs have significant gaps in funding. If a company believes that you are going to purchase the eventual solution they may be willing to take on risk and invest through the gaps. If they are unsure of an eventual sale they won’t leading to delays and quality issues.
Hypothetical cash in the bank |
THE VALLEYS OF DEATH |
![]()
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The gaps:
To manage these gaps most small businesses:
Impact on your solution: These layoffs lead to devastating knowledge loss and impact:
How to avoid this: The only way to avoid this is if someone makes an investment to keep the team together. Which is usually:
The only way the company or an investor will risk their cash is if there is a STRONG indication that the government will make a major purchase at the end. For more on SBIR and investors see HERE What this means for you: If you want a great product on time try to help the company bridge these valleys of death through other contracts or strong assurance of an eventual purchase. |
* This graphic was originally generated by the SBA
More SBIR and Government Market Resources
Appendix and References
If SBIR Was a VC They’d Be One of the Biggest Investors in the World
Submitting a Need/ Focus Area
Each agency’s SBIR program is administered differently with their own unique submission requirements. So we recommend reaching out directly so you can learn what you will need to do.
Agency | SBIR submittal |
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Air Force | |
Air Force (Dual Use) | |
Army | |
Def. Advanced Research Projects Agency |
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Def. Health Program |
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Def. Logistics Agency |
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Def. Threat Reduction Agency |
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Missile Defense Agency |
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National Geospatial-Intelligence Agency |
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Navy |
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Office for Chem and Bio Defense |
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Office of the Sec. Def. |
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Special Operations Command |
Other Ways to Get a Solution
How you acquire a solution will be determine by:
- How quickly you need it.
- Whether you make or buy.
- How much it will cost.

A High Level Overview of How Acquisitions Delivers Solutions to Your Needs
A High Level Overview of How SBIR Delivers Solutions to Your Needs
Glossary
SBIR: Small Business Innovation Research (SBIR) A program that funds corporate R&D and product development that the government is interested in
STTR: Sister program to SBIR that allows companies to partner with universities and other public R&D orgs for their product development. For simplicity if we say SBIR assume we are including STTR unless specifically noted
Agency: There are 11 government agencies (e.g. Dept of Defense, the Environmental Protection Agency, etc) that participate in SBIR
R&D team: The teams within each agency responsible for buying, funding, or developing new solutions to their agency’s needs
Phase I: During Phase I SBIR funded companies have to develop and deliver a proof of concept solution to the need in the SBIR
Phase II: During Phase II SBIR funded companies have to develop and deliver a prototype solution to the need in the SBIR
Phase III: During Phase III SBIR funded companies sell their solution to the government
Traditional SBIR: An SBIR where the government defines a need and may define how acceptable solution will meet that need
Dual-Use Technology: Technologies that have a commercial and government (typically Defense) applications
Dual-use (AFX) SBIR: An SBIR where the applicant identifies a need that can be addressed through their dual Use technology. Also referred to as the AFWERX or Open Topic SBIR
NSF SBIR: The NSF SBIR funds technologies that are much more technically risky than other agencies (bleeding edge ideas that may not work)
Topic: SBIRs are generally released in clusters, a topic is a single need statement within that cluster of SBIRs
Aligned Topic: When the need/work to be done under an SBIR topic is highly aligned to your existing or planned commercial product
Principal Investigator: The person responsible for delivering the solution under an SBIR contract
Methodology
Sources of data for charts: All data used to produce the charts was downloaded from:
https://www.sbir.gov/sbirsearch/award/all
The Timeline chart: The timeline data required significant cleaning reducing the n value
The discounted value of a proposal chart: We used the formula: (% of winning Phase I X (Value of Phase I + (% of winning Phase II X (Value of Phase II))))
Non-data driven analysis and recommendations: These are entirely the product of our experience directly participating in and helping companies thinking through, plan and execute in the SBIR program
An Overview of STTR
What it is:
- Sister program to SBIR
- Same intent: Fund small business development of solutions to government needs
- A small business is still the applicant
- Key difference is that that small business has to be partnered with a non-profit Research Institute (RI), which is general a university of Federal lab
- The RI can do up to 60% of the work (under SBIR subcontractors and partners are limited to 30-50%
Unless STTR is mandated, or an RI has incredible leverage, choose SBIR:
STTR mandated: Sometimes the topics mandates using an STTR. So, if you want to go after the topic you better find an RI
RI leverage: Talent and resources: If an RI has truly unique talent and infrastructure that you couldn’t afford AND That talent and infrastructure makes if much more likely that you will win and deliver the solution
RI leverage: They have the IP: Sometimes a university has incredible IP that is critical to a solution AND That IP would be extremely time consuming/expensive to create on your won
Why we don’t like STTR
Expensive: RIs tend to have massive overhead costs that they pass on to you
Future investors: Investors are VERY skittish about investing if they think someone else has claims on your IP (e.g. you developed it in partnership with an RI)
You can do it under an SBIR: Having an RI on your proposal lends lots of credibility and can absolutely help you win, but you can get that credibility by doing an SBIR and contracting out 40% of the work to them