How to Get Invited to Apply for $305K in NSF SBIR Funding || Step-by-Step Guide

Well, as you guys know, I'm Stacy, founder of Keep Your Equity, and today in the next 20 minutes, you're going to learn how to write an NSF project pitch. It's a short application that gets you invited to apply up to $305,000, and of course, you get to keep 100% of your equity. So we're going to start with the basics. As you guys know, the SBIR program stands for Small Business Innovation Research. It is a federal program. Program that pays US small businesses to do the early risky innovations. Hey, thanks for joining us as well. So yeah, the SBIR stands for Small Business Innovation Research. It is a federal program that pays US small businesses to do the early risky research and development. 11 federal agencies run it, and together they call it America's seed fund. And this is why it matters. By law, the agencies must set set aside 3.2% of their outside research budget for small businesses just like yours. And this can add up to roughly $4 billion every single year. And so at NSF, a single Phase 1 award can go up to $305,000. But the most important part is you want to treat this as also an investment. But even though no one takes your equity and you don't have to pay it back, and because this set-aside is written by law, The money is there every single year, so it doesn't depend on the investor's mood, as you guys know, or the market. And because Congress reauthorized the program through September 30th, 2031, this 2026 reauthorization has also raised the ceilings as well. So the program is stable and the checks got bigger. So let's talk about the agency that I like to recommend the most to founders, which is the NSF SBIR program. So the NSF, or the National Science Foundation, as you guys know, is for deep tech startups. Whether it's engineering, physical sciences, computing, biotech, and energy, NSF funds these sciences technology innovations that might be too early or risky for investors. So there's 4 things that make the NSF SBIR program different compared to other agencies. One, there's no topic list. Maybe many agencies tell you exactly what the problems they want to solve, like a CIBER grant or a contract rather, but NSF does not. So if you have a high-level, a high-risky innovation to market, you can definitely apply. Second, there's also a dual bar. So reviewers are scoring your technology and your market, and you're going to need both. So great science with no customer won't win, but great business with no science won't win either. Also, you don't need a governmental customer. Defense agencies want to sponsor inside the military, for example. The NSF just wants to see a big commercial market opportunity. And finally, the money is real and does come in stages, as you guys know, up to $305,000 for Phase 1 to prove it works, and then $2.5 million for Phase 2 to build it towards the market, along with a Phase 2B. So you guys should care about the NSF program for a couple of different reasons. One, keep all your equity. There's no shares, no board seats, no repayment. It's a credibility stamp. When NSF funds you, the investors, customers, and partners, they notice. And a panel of experts pretty much have validated your science. 3, it pays for the risky part. Investors don't want to pay for the experiments that might fall, so NSF does. And that's exactly what the money is for. And then 4, it's the bridge. Phase 1 opens the door to Phase 2 and then to the state matching funds. And then when you do raise private capital, you walk in with proof, and that changes the conversation for you guys. So now let's talk about what we're here today, the NSF project pitch. Think of this as the front door, because at NSF you cannot submit a full Phase 1 proposal without one. So no pitch, no proposal. As you guys know, 4 questions, and NSF reads it and decides one thing, whether your idea fits the program. And that answer before— and they give you that answer before you spend weeks on an application. 3 things to know. If you get a no, it's likely a fit decision. It's not a judgment of whether your idea is not a good one or not. It's also fast. Even though you might hear from 1 to 2 months back from their response, I've seen some startups get a response within 1 or 2 weeks. So depending on their bandwidth, you might hear back sooner. And it's— this is also capped. So each company gets 2 pitches per year. So do not rush one or half-ass one. You only get 2 singular shots. And the goal, if NSF does say yes to you, you do officially get the invite to submit a full Phase I application. Even though that invitation does not guarantee money, without it, the invitation is right now the prize. So that's what we're kind of aiming for today. So even though there's 4 quote-unquote simple prompts, there's a lot that goes to each and every single one of those applications. And as I think many of you have seen, it's getting more and more competitive to get these pitches approved. So technology innovation, what's the breakthrough, why is it better, only 3,500 characters. 2, technical objectives and challenges, what experiments will prove it works, And also 3,500 characters. 3, describe the market opportunity and pain points. Who's the customers? How big's the market? 1,750 characters. And then finally, company and team. Who's doing it? Who's the people involved? And also the same character limit as well. All right, so we're gonna walk through each of these one, and then we can talk through at the end, like, go into each of these more in more detail. So number 1, The technology innovation. This is your first prompt. A lot of people just jump into, this is my innovation, this is why it's so fantastic, this is why I should get the pitch accepted. I like to take a step back in my project pitches and just first structure it in 2 different paragraphs. From the get-go, describe the problem. Then paragraph 2 is when you do your pitch. Why? Because when you describe the problem first, it gives the context to the reviewers what you're trying to solve, and it helps create the gap. The reviewers need that context within that small 3,500-character limit of why the technology is needed. So start off with the problem and start with a hard number, something like 30% of devices fall in the first year. And then name who gets hurt by the problem. Who's the pain point, right? And that's why it's a fault and why things fall short today. Because once you've had that frame, then you introduce your innovation. That leads to step 2. Define the gap. What do products do today and why does your company exist to solve that gap? Then tell me your innovation. Walk me through. What is it? How does it work? Where does it come from? And why is it fundamentally bigger, better than everything else here today. So anytime you can quantitate the outcomes of your innovation, that's gonna be picked up by the reviewers and also seen as a huge positive. So do lead with the risky technical breakthrough and back it up with the gap, with the real statistics. And don't just avoid, just don't put in lists and features of why my technology's so fantastic and all the shiny bells and whistles. NSF plainly says that's not enough, and reviewers want to know what's new in the science and not just in your little brochure. So that's the first prompt. Let's talk about the second. So the technical objectives and challenges, this is going to be the most critiqued one, so aka the make it or break it. And so when I review SBIR applications, this is where I decide if the So step 1, write one line to say that what you approve in phase 1 and what we have in the end. State the goal. What's the purpose of this? Upon the completion of phase 1, this is what we want to achieve. And that's something of, along with the proof of concept, validating feasibility or validating commercial viability. That's important. Key that up front. Step 2, break the work into 2 to 4 big experiments, which I like to call as technical objectives. For each one, what will you test? What risks does it move? And what success will prove? 3, make each objective a go or no-go. What's the quantitative metric? What does success look like? Every objective needs a result that you can measure. And then finally, close this with a phase 2 bridge. Say what's in phase 1 and then proves, and then what does that lead to in phase 2? And even though This is again my proprietary structure of how I typically structure and use my framework in terms of project pitches. There are many ways to do these applications, but I just find this structure works very, very, very well. All right. 3, the market opportunity. 1,750 characters. Half the space, so it's gonna be tight. There's 2 parts that you wanna answer, the market and then the customer. So step 1, Size the market in dollars. If I read through a market opportunity and I don't see no dollar sign, I'm going to ask you how big the market is and you want to— they want you to describe the TAM, SAM, SOM. So give your dollar amount, what's the total market, the part you can serve, and what can you realistically win. And that's the trend we want to ride. And then name your customer. Who exactly, who are they, what's their pain point, right? What's the real job title or the real company? We want to name that concretely to show the reviewers that you actually gave some thought of who this person might be. And finally, if you've done any customer interviews, say so. That's a huge positive for the NSF and agencies. Even a handful of conversations to confirm who needs your device can make your case so much stronger. So either way, when you describe the market, Use real numbers and dollar amounts, and then show who you're up against. Do not say— do not describe a vague market, because when a reviewer reads, everyone's our customer, this is a huge TAM, we have a billion-dollar market, they're going to say, we have no customers, we're not focused, they don't understand the market. So be tangible and concrete when you describe the market. Finally, the company and team, also 1,750 characters. So one question we want to answer here is, can the team do this research? So first, describe the company in 3 to 4 sentences. How did you start? What's your mission? And what have you already achieved? And then add up your experiences. Our team has a combined 30 years in engineering, medicine, and software, as an example. And then profile you and the PI. For each one, what's the role, the background, why are they the right fit to complete the project? And then finally, step 4, name your gaps. Who's gonna fill them in? What skills do you need? Do you need an advisor, plan to hire some partner through the work? 'Cause reviewers are gonna trust founders to know what they don't know. So either way, tie every credential back to the research goals, and then just don't copy and paste resumes. And relate their backgrounds to what you want to accomplish. All right, so that's kind of the overview of how to go about the pitches, and we can go into more details and questions afterwards. When you're done writing the pitch, I recommend taking at least a couple hours to do so, even with AI. You want to now submit the application. So before you write a single word, look at NSF Project Fit Assessment to make sure it's a good fit on their website. And then you want to create an account on the portal, fill in the details per box, and then submit. And then the portal link is here, and you can also just Google, you know, Project Pitch submission, and it should show up. And remember, it's one pitch per submission window, 2 pitches per company per year. All right. So once you submit, what happens next? Your four questions goes to the NSF program staff. The program directors will review them for the fit and interest, and so hopefully you should hear back in one or two months. But I have heard startup founders hear back within a couple weeks, but no guarantees. If you want to hit the November deadline, definitely submit your pitch ASAP. There could be two outcomes: one, you can get an official. invitation to submit a full Phase 1 application, and your deadline runs from the date of that invitation to a year later. So that clock starts that day. You might also get a decline, which is a short note to say why it didn't fit. You can resubmit it and fix— you can fix and resubmit it for another window. But then again, if you get a no, it's not about the fit. It's, it's might be due to the fit and not due to a bad idea. So just don't take anything personally. And many times they might even follow up with you asking you for subsequent follow-up information. So that's just another opportunity to give the reviewers more context with your problem statement or the innovation within, within 500 words. So that's a very common ask, so don't freak out if you get that ask. And then so big picture, from the day you start writing to the day the money lands in your bank account is usually 9 to 14 months. It is a long cycle. So if you need money next year, start this year and try to submit everything early. And so when preparing for your NSF SBIR Phase 1 application, let's just say, let's just get an invitation, right? This is where the real work starts. So the day you get that email, start writing, and you want 6 things to go on simultaneously. The project description. Turn your pitch objectives into a Full research plan with milestones, methods, a backup hurdle if something falls apart. Start thinking about your budget: $305,000 in direct costs, indirect costs, and small business fees. And I can do another webinar on how to break up the budget then. Your team members, your PI must be primarily employed by the company. Collect letters of support, subawards if you have to, and also biosketches. And everyone needs to sign. Sign up inside ENCV. And then most importantly, the registrations, the big nasty registrations, SAM.gov, SBIR.gov, SBA registry, login.gov, research.gov. This is the one that founders typically leave behind and often forget. And as you guys know, this can take weeks to complete. So start now. That should be the first thing that you can jump on once you get the invitation. And then 5, think about your go-to-market and commercialization strategy. Even with these R&D applications, think about how each of those experiments will tie into your go-to-market and eventually how you solve a customer pain point and eventually make money. This is an investment. They do want to see the ROI, and that's what their reviewers are looking for. And then 6, think of Phase 2, right? As you write through your Phase 1, what are the milestones you have to complete in order to strengthen your position to pursue a Phase 2 application? And then mention in a paragraph form, what does Phase 2 look like? And so that was just going to help you so that you're not starting from zero. And so with that presentation, a couple of things, questions I get all the time. One, is my idea too early? If the technical risk is real and the science is unproven but plausible, you're on the right track. So they love early risky innovations, and you want to start early on. 2, Do I need a PhD? No, you do not. Can I resubmit after a no? Yes, you can, but just remember you have a limited number of tries. And then everything, also this resources box, everything you need here in case you need additional support. Like you said, you can also go to my YouTube channel or come to this expert strategy session so we can also talk through some of your challenges, some questions you have on the project pitch. So it did take me 16 tries to win my first grant, you guys. I haven't shared that with you already. So hopefully you don't need 16. And with that, thank you so much for coming to today's webinar, and I'll be happy to answer any questions you guys have.