Typical Sources of Funding
The typical sources of funding for businesses include:
- Friends and Family
- Lending Institutions – Banks and Credit Unions
- Angel, Private Equity and Venture capital
- Community Development Loan Funds
- Governmental and NGO Grants
In addition to these sources of funding for businesses, companies based on a technology or innovation actually have access to grants.
SBIR and STTR Grants
There are two types of grants from federal agencies:
- Small Business Innovative Research (SBIR)
- Small Business Technology Transfer (STTR)
Congress created the Small Business Innovation Research (SBIR) Program in 1982. The program is designed to stimulate innovative research by small businesses while providing government agencies with new, cost-effective solutions to technical and scientific problems. Over $2.5 billion in SBIR and Small Business Technology Transfer (STTR) funds are available each year to qualifying companies, making these the largest pool of seed-stage R&D money available. Only companies organized for profit may propose. Qualifications include employer of 500 or fewer, independent of large company control, predominantly U.S. owned and willing to perform project work in the U.S. SBIR and STTR opportunities exist for a very broad range of projects, offered in an understandable structured manner with little red-tape, making these grants the “best in class”.
Some things to remember:
- The proposal must solve a problem
- The work must be truly innovative
- Works best with principal investigator (or a partner) with recognized expertise
- Retain IP and equity
- Long time frames to obtain grant
How SBIR and STTR Work
Program Overview – click here for the PDF.
Funding Your Tech Innovation Through SBIR/STTR – click here for the PDF.
Phase Zero Incentive Program – click here for the PDF.