There are so many non-dilutive federal funding opportunities for small businesses. Below, we provide short summaries of those that are most applicable to companies developing products and/or services focused on improving human health.
What Are SBIR and STTR Funding?
The Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) programs are two funding mechanisms that are available at various federal agencies — like the National Institutes of Health (NIH), National Science Foundation (NSF) and the Department of Defense (DoD).
SBIR and STTR opportunities are highly competitive and uniquely focused on providing small businesses funding to advance promising products, services, and technology towards commercialization. The US Small Business Administration (SBA) coordinates the SBIR/STTR program within the government, and the baseline requirements of SBIR/STTR mechanisms are the same across all federal organizations; importantly, each agency is allowed to adjust certain requirements based on their preferences. See here and here for more details.
The SBIR/STTR programs are implemented with two main phases of funding, where Phase I (PhI) applications typically focus on proof-of-concept, and Phase II (PhII) applications advance products towards commercialization (typically including manufacturing milestones, small and/or large animal testing, and/or human clinical trials). There is an established cap on funding amounts for PhI and PhII SBIR and STTR awards, and the SBA adjusts these amounts each year for inflation. Each agency can then request an SBA-approved waiver to increase these limits if they so choose — therefore each agency, and often institutes within each agency, have their own funding limitations for each funding mechanism.
A few key differences between SBIR and STTR funding mechanisms are summarized below:
| SBIR Funding Mechanisms | STTR Funding Mechanisms |
| Primary Goal: Provide critical R&D funding to advance promising products towards commercialization | Primary Goal: Facilitate the transfer of promising technologies from non-profit organizations (typically universities) to small businesses to advance the product(s) towards commercialization |
| Approx. Government Spend Per Year: $3.2B | Approx. Government Spend Per Year: $450M |
| 11 federal agencies participate (must have an extramural R&D budget greater than $100M) | 5 federal agencies participate (must have an extramural R&D budget greater than $1B) |
| At least 66% of funding in a PhI and 50% of funding in a PhII must go to the Small Business Concern (SBC) | MUST have a non-profit partner applying with the SBC; At least 40% of funding must go to the SBC and at least 30% of funding must go to the non-profit partner in each Phase of funding. |
| Some federal agencies allow the SBC to be majority-owned by venture capital | SBC cannot be majority-owned by venture capital |
| Principal Investigator must be 50.1% or more employed by the SBC | Principal Investigator can be employed by either the non-profit partner or the SBC |
| SBC and non-profit partner MUST establish an intellectual property agreement that allows SBC to further commercialize the product |
Department of Defense: Broad Agency announcements (BAAs) and the Congressionally-Directed Medical research Programs (CDMRP)
The Armed Forces conduct significant R&D each year, and through their various Broad Agency Announcements (BAAs), there is a lot of funding available for small businesses to advance products that are of particular interest to the military. We recommend reviewing the Dept. of the Army’s Medical Research and Development Command BAA as well as the US Special Operations Command BAA.
In addition, each year since 1992, the CDMRP has provided over $7B in funding for Special Interest Topics in Medical Research. Funding opportunities change every year, but typically include cancer, military health, neurological conditions, and more.
Advanced research Projects Agency for Health (ARPA-H)
ARPA-H is a relatively new agency within the government — established only in 2022. Its goal is to accelerate better health outcomes by supporting high impact, societal solutions to the most complex problems. ARPA-H is a high-risk, high-reward funding agency, so their opportunities mimic this idea. More information can be found here and here.
Biomedical Advanced Research and Development Authority (BARDA)
BARDA seeks to partner with industry to develop products and tools that could help combat future public health emergencies. The development of these ‘medical countermeasures’ through various funding opportunities allows the government to increase preparedness in advance of these health security threats. Many of these opportunities require cost sharing in association with the receipt of funding — so this typically lends itself to more established small businesses. The BARDA DRIVE EZ-BAA, a smaller funding and shorter term opportunity, can be found here, whereas the larger BAA can be found here.
To assess general interest from BARDA for your product, request a TechWatch. And particularly for the larger BAA, and for a specific Area of Interest, a Stage 1, Pre-Submission call with the Technical Point of Contact is strongly recommended (read: required) to assess programmatic alignment prior to a Stage 2, Abstract submission. A Stage 3, Full Proposal Submission is then by invitation based on the Stage 2 submission. While an offeror can skip to Stage 3 directly (without an invitation), this would be a significant amount of work and unlikely to be successful.
DeBusk & Fife 