By Landon Taylor, CEO of Base 11
Did you know that there is a program that helps startups and small businesses from across the country transform their innovative ideas into commercialized products and services? The National Science Foundation (NSF) offers such a program entitled the NSF Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR), focused on funding high-risk, high-impact technologies—those that show promise, but whose success has not yet been validated. Through this program, NSF awards nearly $190 million in funding annually to entrepreneurs across the country. Launched in 2012, NSF has made over 2,500 awards to startups and small businesses of which 62 have gone on to successful exits and have raised over $3.2 billion in private funding.
The program is designed to provide entrepreneurs with up to three phases of seed capital funding including Phase I, the initial research phase; Phase II, the building of a working prototype; and Phase III, commercialization.
Here is the breakdown of the availability of funding and deliverables as listed on the NSF website:
Phase I: Up to $225,000 to complete your initial research:
If funded, the Phase I deliverables include:
- Exploring product-market fit
- Determining your technology’s feasibility
- Designing and testing prototypes
- Identifying any relevant legal or regulatory issues
- Developing your plan to scale and market your technology product or service
Phase II: If you’ve met all the Phase I requirements and your product or service needs more development, NSF invites you to apply for Phase II funding of up to $750,000 over two years. Phase II awardees can also apply for Phase IIB funding to accelerate the commercialization process. To qualify for the NSF Phase IIB funding (up to $500,000), you have to secure additional funding of at least $100,000 from a third party source.
Sounds awesome so far, right? And guess how much equity NSF requires you to give up in exchange for up to $1.5 million in funding? Zero! It’s non-dilutive, early-stage venture capital with no strings attached.
Must be too good to be true, right? I certainly thought it was when I first learned about the program. But then I traveled to Washington, DC to meet with the NSF program leadership and came to understand why the federal government provides this program, and why it is so critical that it be more widely adopted by entrepreneurs from all backgrounds across the country.
The federal government wants to spur new, breakthrough technological innovation, but it is often difficult for large companies to create startups. Big companies would prefer to sit back and wait for new tech innovation to occur and then either buy the company or create a strategic investment.
That is where you and I come in. We need to get the word out. It is critical to raise awareness about this opportunity within all communities in our nation to:
- Spur the innovation necessary for the US to remain competitive globally
- Solve for the underrepresentation of women and minorities in tech
- Produce wealth and create new jobs of the 21st century so that we can build a sustainable middle-class comprised of all Americans
I have pledged to do my part to share this opportunity with as many innovators as possible. If you are a current or aspiring tech entrepreneur who has a high-impact, breakthrough idea for a high-risk, high-reward venture that will positively impact society, click HERE to go to the NSF website and take the next steps towards submitting your Phase I application. If you know others who would benefit from this information, please share this article with them as well.
Follow Landon on Twitter @LandonVTaylor or connect with him on LinkedIn.