In this panel discussion, Stacy Chin, co‑founder of Scout.ai, shares practical guidance for med‑tech founders seeking non‑dilutive federal funding, especially SBIR grants. She introduces Scout.ai’s AI‑driven SaaS platform that accelerates high‑quality SBIR applications, saving roughly 70% of the time normally required. Drawing on her experience as a PhD chemist, former NIH and NSF reviewer, and PI on multiple SBIR and ARPA‑H projects, she outlines the full grant‑seeking workflow: (1) early engagement with program officers to align proposals with agency priorities; (2) crafting commercialization‑focused specific aims that demonstrate market need and superiority over existing solutions; (3) balancing grant funding with equity financing, noting when startups should prioritize de‑risking via grants versus scaling with VC money; (4) navigating policy shifts such as the upcoming SBIR re‑authorization bill that could raise agency allocation from 3.2% to 7%; (5) ensuring U.S. ownership to meet eligibility, and avoiding foreign‑entity complications; (6) leveraging AI to increase both the quality and volume of submissions while preserving the nuanced narrative reviewers expect; (7) emphasizing clear, reviewer‑friendly writing, avoiding excessive technical detail, and maintaining grammatical precision. She stresses the importance of diversity in funding strategies, the need for founders to stay in the driver’s seat of their narrative, and the pitfalls of relying on generic tools like ChatGPT for grant writing. Overall, the talk provides a roadmap for founders to secure federal money without sacrificing equity, using AI‑enhanced processes and strategic relationship‑building.
Chapters
Thank you so much for having me here today. As Nicole said, I'm Stacy Chin, one of the co-founders of Scout.ai, and we have an AI platform to help founders write high-quality SBIR grants, saving about 70% of your time and effort without jeopardizing the quality. And so our team has raised over $500 million of funding to date, and we bring lots of expertise in this healthcare sector. We're all formal PIs, SBIR reviewers, and also past strategists from the larger big firms. And so we're trying to package decades of knowledge and bring the best practices and try and deliver that at scale. In a SaaS platform. So myself, I have background in as a PhD chemist. I was a PI for an NIH SBIR Phase 1 and Phase 2 application. I was a reviewer for NIH and NSF for about 5 years, had my own consulting firm, shared over $40 million of funding, including one of the first large ARPA-H applications and contracts. And I'm looking forward to this panel and helping you guys get some non-dilutive grants. Yeah, that's a great question, and I think it's important to discuss why is it important to meet with the program officers. I think early in my career I didn't understand the importance of it, but I'm now realizing how important it is to do this critical step. You want to make sure your proposal is aligned to the agency's priorities, and before you even start writing, right? And these conversations are really powerful because you do want to build relationship with these program officers. They do have magical powers behind the scenes. So I have seen proposals that haven't gotten great scores from a review panel that has gotten awarded because they have good relationships with the program officer, for example. So how do you find them, right? There is a list of program officers on the NIH website. If you type in or Google NIH SBIR, like, program officers or agencies, there's a list of in there. And I would strongly recommend going in prepared by having a specific aims draft done before you even start engaging with the program officer. And that's just a nice professional way saying that you've prepared yourself and you're ready for a conversation. Um, typically if you're going for other applications like a larger ARPA-H federal contract, we strongly, strongly, strongly recommend to engage with the program officer because that's a little bit of a different game. And usually those that do not engage with the ARPA-H program officer have a very low chance of getting these awarded. Something all startups kind of struggle with, you know, what's the balance between going after equity funding versus grants? And the majority of them are going for both simultaneously. Usually startups at the earlier stages who are still developing that proof of concept, needs those early results, they would heavily rely on grants. And that's a great way to de-risk your technical hurdles before approaching investors, because usually, and not all cases, the investors would either take more ownership early on or may not be interested until you're further along de-risking technology. But if you are further along and want to focus on speed and scalability, these startups typically lean more heavily on the VC or the equity funding because of the timeline and that they can come in much more easily— not easily, but rather quicker at times than grants. We also work with a lot of like excellent, brilliant like scientists, engineers from the top universities like PhD and Harvard and all these hospitals too. What I find trips up mostly first-time entrepreneurs is that this is a commercialization proposal, right? SBIRs are all about commercialization. It's not about developing some sort of technology and proving it with through scientific experiments. And so the way you want to structure specific aims in your strategy is to develop something and then to prove that it's better than what's currently out there. We want to fund new innovations that is better than the current standard, whether it's faster, cheaper, higher efficacy. I've seen a lot of people developing med devices and say, hey, we want to propose to develop a new technology, and that's it. Or we want to prove this in an animal study, and they forget the last question is why. And so the way for me, it was a mind shift coming out of grad school towards this role of how do I think about what's the market need and figure out how to prepare my aims based on the market or clinical need versus just preparing more experiments for a peer-reviewed journal or an article. And also to add there too, yes, they're— everyone's nervous about the cuts, right? And they're kind of— we're seeing our clients kind of hold back a little bit saying, I'm really nervous about that. But then the clients that we are helping that are moving forward are actually now getting things awarded. So this is still a game we still have to push through. I think we've all seen turmoil like this in the past as well too, and those that actually persist and continue to go for grant funding despite these delays are the ones that are winning out. We are keeping a close eye as well too on the reauthorization bill that should pass through hopefully end of September. Right now each agency is required to allocate at least 3.2% of the budget. We're seeing that both sides of the parties are bullish in passing this new authorization bill, which will make the SBIR program— and we might even see the increase from 3.2% to 7% per agency. So it's not that the government is like woo-woo about new innovations. They do support new innovations. We just have to figure out what that alignment looks like next month when that comes through. Yeah, I think just diversity is going to be the name of the game, just kind of going hard in terms of exploring both non-dilutive side, whether it's grants, SBIR, foundational nonprofits, or even just on the equity side. Again, like those that are holding back on the grants, you're missing the boat of when these do become awarded down the road. And so we're just seeing a lot of companies are just diversifying more, looking at different opportunities even within SBIR program, trying to go harder on quality and also look at different opportunities across the board to see what makes sense as well. We're also seeing some, like, maybe not this population, but some biotech companies as well too, biopharma investors are asking, are you applying for SBIR grants? So it kind of goes both ways. They kind of don't— we're finding it's hard and hard to get some of these med tech and healthcare proposals are VC funded because they're looking for companies that are along. So they're asking and keeping an eye if you do have a non-dilutive strategy. So I think it's more important than ever, especially like everyone resonates here. Diversity is always going to be the best thing at this time. As a founder and PI, this is your proposal, right? This is— you should be in the driver's seat. You know your technology, your go-to-market, and your strategy the best. And so when working with a grant writer, I've been doing it for 10 years, our goal is to figure out how to extract that information from you and then kind of massage it in a way that'll proceed well to the review. It takes a lot of time. Like usually writing one SBIR application takes around 60 to 70 I'm sure Ricky and Kurt can also resonate to that too. It's time commitment and it's an investment. And these are really competitive where stars can have anywhere from like a 10 to 15 shot of getting this the first time around. So there's an art of how to put together an SBA application that people have seen over and over and over and over again can kind of tell you whether or not you're in the right direction or not. And so if you do go for a great writer, you want to make sure you have a team with a successful record and someone that's working with you and actually cares about what you're doing and actually is investing time in you to craft your narrative. I personally don't think you can ChatGPT an application. That's just not how app like SBIR applications work. I've seen so much junk that's out there and it's absolutely horrible. And so, but things in this space, it's all about quality and the quality comes with cost. And so I think that's, that's kind of some of the pain points we're trying to address here at Scout is how can we take AI, transform and just speed up the time to write that without just ChatGPTing everything. And we have it in a way where, you know, we can still high quality applications, touchpoint with SBIR experts. While you as the PI and the founder still stays in the driver's seat. And so we have a way just to accelerate your efforts with AI properly. Fabrication of data is a big no-no. We want to make sure everything still has that, that flair of what reviewers are looking for. And that's really, really important. How you pitch your startup towards a grant or an SBIR application is completely different compared to how you pitch it to a VC or a different investor. We have lots of excellent and really brilliant PhD scientists, engineers that are going after SBIR grants, but when checking out their pitch decks, It has to be completely revised. So we're also trying to help them as well to just figure out, hey, this is not how you exactly do a pitch deck, or how do you present to investors as well too. And it's completely different skill set. I've been there myself. But this is something just to keep in mind if you're going for both avenues. The deck and the narrative have to be different between the different parties. For the SBIR program, one of the requirements is that it has to be majority owned by U.S. citizens or permanent residents. And so those that have a foreign entity, especially this day and age, might have really a lot of challenges getting awarded. We had one client under due diligence for an NIH application, but they got drawn just because there's a subsidiary tied to China, right? So we have to be really careful, especially this certain time around. Yeah, and that's so— that's why we also encourage— it's a volume game. We don't want to like do 40 applications, like one PI different NIH, but rather it's going back in the pot again, trying different agencies out, tailoring your narrative and proposal across different subsections. And so it's about quality and also getting that volume up there, but that gets very time-consuming and very time-intensive and also resource-intensive too. So that's why I think AI for us is a nice tool to kind of get that level of quality and volume that you might not in other areas too. But that's one way we're trying to get more funding in the door, getting more shots on goal. And one thing I find a lot with coming from the academic world myself, sometimes too much technical details, right? Yes, the end value is important. Yes, the controls are important and all the different variables in your experiment. But sometimes not all of that is necessary in an SBIR application. And so the focus on commercialization and how do you translate R&D towards commercialization is a very different scope that I think, at least for us, we try to help guide those that are with a stronger academic background, revisit what they're doing and kind of reposition their narrative towards that end goal. And one thing to note, during my time as a reviewer, I had a long day and I'm tired, and then I had to review all these applications. So I really appreciate it if SBIRs are written in a way that makes it easy for the reviewer to understand your pain points. Make it organized, don't have any grammatical mistakes, and just to make sure it's easy for us to understand what's the technology, what is the problem you're solving, and why should we fund this application? So that's why having some outside comments or just someone that knows how to craft a narrative could be very important in this space.
