Tip #7: 4 Considerations in Preparation for US Government Funding
The United States has several federal funding opportunities designed to support innovative research & development projects by small businesses. These opportunities range from small grants (~$250,000 USD) to large federal contracts (>$4M USD) and are generally industry agnostic. Ultimately, the US government hopes that the technologies developed under these opportunities is commercialized either within the public or private sectors. If you are considering expanding your R&D and have eyes on the US market, these opportunities might provide the startup capital necessary to beginning or expanding your US presence. Only for small companies, there are more than 2,500 million dollars to fund innovations every year.
The US nondilutive funding space is broadly split into two categories:
Grants. US non-dilutive grants via the Small Business Innovative Research (SBIR) program focus on early-stage, innovative tech developed by American-controlled businesses and commercialized primarily in the US private sector.
Contracts. US non-dilutive contracts focus on R&D (of early or advanced stages) that fills a clear need identified by the US government. These often take the form of R&D needs for defense, infrastructure, or logistics purposes in the US public sector.
However attractive, companies must consider whether they have the right preparations in place to fully leverage these opportunities. Whether you are company with 30+ years of industry experience seeking to expand operations or a smaller startup looking to obtain nondilutive capital, there are several preparation steps that you must consider before targeting US federal non-dilutive funds.
1. Do you have a US presence?
To be competitive with other US businesses, you must have a strong US presence. Ideally, a company would have a physical office on US territory. These employees must be eligible to work in the US (or will soon be eligible) and must have the technical profiles to fulfill project needs.
For US grants, the company must be at least 50% controlled by a US citizen, permanent resident, or another US company.
For US contracts, the company must have a firm US presence. This can either take the form of a US subsidiary, or a strong partnership with a US company, university, etc.
2. Can you do the work?
The US government is heavily invested in ensuring that the funds disbursed to small businesses feed the US economy. That is to say, there is a strong emphasis on all research and development happening on US soil, with US companies, and US employees.
While this is a requirement for US grants, the portion of outsourced R&D will also impact the competitiveness of contracts.
3. What is your market?
The goal of US government funding, once more, is primarily to feed the US economy. While an international market leads to stronger eventual commercial success, primary focus should be on the US market penetration plan. This plan should include strategic partners and market need.
For federal contracts, the US government has already identified this need but having a broader commercialization plan will increase the competitiveness of the project.
4. Do you have the personnel (or access to the personnel)?
The US government places heavy consideration on the expertise and fit of the company and team for each project. Does your team show a solid track record for the project you are proposing? Are their CVs directly relevant to the proposed R&D? If you do not have the best people already onboard, you have the option to identify them during the proposal stages and then only bring them on board should the project go forward. However, they must be identified, relevant, and eligible.
As a special consideration, when considering US government R&D grants, all personnel must be eligible to work in the US and must perform all work in the US should the grant go forward. The lead investigator must furthermore be fully employed by your company in the United States during the course of the project.
These US opportunities are fantastic potentials for growth for companies of all sizes and disciplines. Once the above checkboxes are all ticked, you’re ready to begin exploring US non-dilutive funding!
Amalia was born in Sagua la Grande, Cuba and raised in Miami, FL. She graduated from her Bachelor’s in Linguistics and Japanese from the University of Florida and her Master’s in Neurolinguistics from the University of Illinois at Urbana-Champaign. Throughout her university career, she co-wrote, reviewed, and consulted on SBIR/STTR projects for the University research groups in a broad range of topics – from stem cell technologies to machine learning algorithms. Upon graduation, she fully focused on federal funding consulting for US companies.
Amalia has lead a broad range of federal funding proposals within both the SBIR/STTR program and the broader federal contracting sphere. Her involvement has encompassed all aspects from eligibility, company fit, project scope curation, and proposal preparation for companies of various sizes. Amalia is currently working with Inspiralia USA as an Innovation Process Manager.