The Small Business Innovative Research (SBIR) program provides a pool of money for certain government agencies to utilize for purposes of investing in companies with innovative technology. Through this program, the government may award research and development funds to small businesses to prove their concept, to demonstrate the viability of the product, and then agency procurement funds to pursue commercialization.
The SBIR program has certain requirements for participation that must be met, but it is an excellent way for young companies to access federal R&D funds to advance the development of their products instead of having to give equity away through private investment. SBIR awards are made more quickly (even sometimes on the spot via a government purchase card) and generally memorialized in an OTA instead of a traditional procurement contract (although not all SBIR awards use OTAs). More to come on the requirements of participating in SBIR in a future article.