• meet federal research and development needs,
• increase employment,
• foster and encourage participation in technological innovation by socially and economically disadvantaged persons,
• increase private-sector commercialization of innovations derived from federal research and development.

The program will not fund market research, marketing activities or minor improvements to existing products.

SBIR Program Advantages

The SBIR program offers a number of benefits to entrepreneurs and small businesses. Some of these benefits include the following:

• Provides over $1 billion annually to small businesses to research high risk innovations
• Solicits research in a variety of subject areas
• Most patent and proprietary rights remain with the small business
• Funds do not have to be repaid---SBIR is not a loan program
• Does not require owner to sacrifice equity in the company

SBIR Program Realities

While the SBIR program offers great opportunities to entrepreneurs and small businesses it is not applicable to all small business ventures. The program is limited to entrepreneurs or businesses developing innovative products and processes. Individuals need to consider several factors when entering the SBIR program:

Competitive: Historically less than fifteen percent of all Phase I proposals are funded and about thirty percent of Phase II proposals are funded. The South Dakota SBIR Center can help you improve your odds of receiving fan award.

Hard Work: Preparing a competitive Phase I SBIR proposal takes time, energy, and in some cases money.

Slow Process: Most agencies accept proposals only once a year and the Phase I review process can take months. There is frequently a gap of months between the end of Phase I and funding for Phase II.

Commercialization: The real pay off is in Phase III if the business can commercialize the research results. Phase I and II funding helps develop the product but the company generally does not make much money on these two phases. A sound and well financed commercialization plan is critical to success in the SBIR program.