Startups seeking non-dilutive financing find solace in alternatives such as government offered small business grants. As suggested by Richard Giersch, a seasoned grant applicant, securing this kind of funding necessitates a blend of innovative concepts, data, and industry credentials.
Giersch stresses the importance of startups being able to cogently express their unique innovative ideas, backed by concrete data indicative of success potential. Industry credentials also contribute in asserting the company’s credibility and growth potential.
Along with showcasing the commercial viability of an idea, the SBIR and STTR grants have expedited the growth of small businesses by providing massive funding. In Washington state alone, over $1.6 billion was allotted to 4,577 enterprises. However, Giersch emphasizes that a unique idea alone does not guarantee funding. Businesses need to prove the feasibility of potential markets and provide realistic ROI projections.
Successful startups such as Histone Therapeutics, Phase Genomics, and Talus Biosciences were supported by these grants. Interestingly, even established industry giants like Seagen, which was acquired by Pfizer for an astounding $43 billion, got their initial support from these programs.
These grants can be instrumental in demonstrating the value of a technology and setting the stage for further investments. Major grant-giving institutions like the U.S. National Science Foundation, the National Institutes of Health, and the U.S. Department of Energy play a seminal role in the process. These grants not only reduce risks for investors but also elevate the credibility of a business.
The two initial phases of SBIR/STTR grants, with average fundings of about $307,000 in Phase I and up to $2.05 million in Phase II, emphasize proof-of-concept and feasibility studies, and more comprehensive developments correspondingly. However, Phase III does not offer additional funding but eases the commercialization process of the developed product.
The grant programs highly encourage applications from first-time applicants and underrepresented groups, including minorities and women business owners. To assist startups in the application process, Giersch and his colleagues have established a support program in 2022. Giersch suggests initiating the application process about ten weeks before the deadline to maximize the chances of success.
