SBIR supports startup innovations

According to Brian Walsh, Senior Technology Commercialization Manager at University of Wisconsin-Milwaukee Research Foundation (UWMRF), startups are a key source of technological innovations in the United States.

In his role, Walsh helps connect UW-Milwaukee students, staff, and faculty with resources to help turn a great idea into a commercially viable product. One of the key resources available to him is Small Business Innovation Research (SBIR) funds. Part of a federal program known as America’s Seed Fund, these dollars are allocated to help develop promising new discoveries.

SBIR Success

SBIR funds have played a key role in the success stories of Milwaukee-based startups like COnovate.

The company uses a novel advanced carbon-based nanomaterial that is the world’s only form of solid carbon monoxide, which was developed on the UW-Milwaukee campus to create its cutting-edge battery anode material that promises to revolutionize the battery industry.

“They’ve earned more than $2.5 million in awards from SBIR. They’ve had funding from five different agencies since 2018, the Department of Energy, the National Science Foundation, and the USDA, all for projects related to their battery anode materials,” Walsh said.

“It’s non-dilutive funding,” he continued. “It helps them de-risk the technology. (The funding) got them to the point where they could actually get state matching funds to help them with investor readiness and help take them the point where they were able to pitch and raise some capital toward what they’re doing now.”

Walsh aims to make this success story a common one though the work of UWMRF. The technology transfer expert sat down with MKEStartup.News to provide an overview of SBRI funding.

MSUN: What kind of business is eligible for Small Business Innovation Research funds?

BW: Small Business Innovation Research funds are early-stage funds. The federal government realizes that early-stage technical projects are too risky. They’re not going to get money from investors yet. They also don’t really fit into basic research funding categories.

To fill that gap, the SBIR fund early-stage ideas that need to prove the feasibility of the idea. They’re still in research and development.

SBIR is looking for revolution, not evolution. They want risk. They’re looking for research projects, not engineering projects. They’re looking for early-stage ideas that need to be worked out.

SBIR is for early-stage small businesses that have R&D to do, and it does need to be a small business. Often, it’s a researcher who is going to form a small business or it has formed one. Often academic institutions are involved through subawards and collaboration, but the application comes from a small business.

MSUN: How does a business apply for SBIR funding?

BW: I always tell people that this is a long game. It’s government money. If they’re successful in getting the award, it could be a year before they see it. There are 11 different agencies that participate (and each has different application processes) …

Ideally, if you’re applying for the first time allow yourself two to three months (to complete the process).

Then, the SBIR has external reviewers and review process. Again, every agency does it their own way, but the time from an application submitted to it being reviewed can be three or four months, maybe even longer. It could be six to eight months before someone who submitted an application knows that they’re going to win the award. It can be a few more months after that before they actually get the money.

MSUN: How many applications get funded?

BW: On average for SBIR, I would say about one in five gets funded. Maybe 18%.

Getting services on the front end helps boost your chances. Going through a program, like the one at Wisconsin Center for Technology Commercialization (CTC) help increase that to one in four.

MSUN: What is the average award size for SBIR funding?

BW: Typically, there are two phases.

A Phase One project is typically a yearlong project, and they are typically in the hundreds of thousands of dollars.

On the low end, they are $100,000, and on the high end, they’re up to $400,000. NIH (National Institutes of Health) will have a higher amount because some of that medical research is expensive and time consuming…

If you’re successful in Phase One, you can apply for Phase Two which is typically around $1 million.

The range anywhere from $600,000 to $2 million… Often it’s a two-year project, basically picking up where you left off in Phase One. In Phase One you’ve proven basic feasibility, now you are ready to test a pilot or do a little field testing or scale up to a prototype of the first-round product.

It’s picking up where you left off and moving a few more steps closer to commercialization, whatever that might be.

To learn more about grants available through America’s Seed Fund, click here. To discover the entrepreneurial resources available through UWMRF, click here.