Stacy Chin explains the STTR program, a federal grant for science startups that requires partnering with a nonprofit research institution. The key trade-off: you get non-dilutive funding and access to specialized expertise, but you must share or co-own intellectual property with your research partner, unlike SBIR grants where you keep full IP control.
In this video, we're going to dive into the world of startup funding by exploring the Small Business Technology Transfer program, or more commonly known as the STTR. If you're a science or tech founder looking for money to fund your startup in order to progress your developments on a brand new innovation, then you've came to the right place. So today I'll share what is an STTR grant, how it differs from the Small Business Innovation Research grant, or the SBIR, when you should consider an STTR proposal, and some really important considerations between the SBIR and the STTR program. There's a lot to cover, so let's just get started. Hey guys, welcome Welcome back to the channel. I'm Stacy Chin from KeepYourEquity.co, and our mission is to help science and tech founders secure non-diluted funding from federal programs such as those from the SBIR and STTR. If you're interested in learning more about these funding opportunities, I'll leave a link in the description to another video below. We also consult lots of other businesses, like in the private and public sector, along with NGOs, to help them get the grant funding they need to support projects that will make a big impact on some of today's biggest global issues. First, let's just get to the basics. What is the Small Business Technology Transfer program, or more commonly known as the STTR? The STTR is a funding program that was established by the Small Business Administration, or SBA, to encourage collaboration between small businesses with nonprofit institutions like university hospitals, academic labs, or federal laboratories. So this program provides grants or non-dilutive funding to startups and small businesses at the really early stages of their development to advance new innovative ideas and technologies. And importantly, what sets the STTR program apart from other federal funding opportunities and programs is its emphasis to establish partnerships between small businesses and nonprofit research entities. That is the key. So in an STTR project, usually the small business have to work closely with the research institution by leveraging its expertise, resources, and facilities to help bridge the gap between scientific research and commercialization, with the ultimate goal of bringing new innovative products and technologies to the commercial market. Now keep in mind, STTR grants are crazy competitive. Competitive and highly sought after by startups to several key benefits, which we'll cover more later in this video. But now, since we understand what the STTR program is and what sets it apart from other federal funding opportunities, there's two key reasons that you need to keep in mind if you want to consider applying for an STTR versus other opportunities such as an SBIR. But before we get into those reasons, we greatly appreciate if you take a moment to like this video, subscribe to this channel, and to comment below. And by doing so, you'll gain a wealth of knowledge on how you can secure non-dilutive funding for your startup so that you can keep your equity start your fundraising journey. And of course, don't forget to check out our website at keepyourequity.co where you find lots of other templates, advice, and resources to help you in your fundraising goals. All right, now let's jump into it. So the first reason you should consider an STTR application is if you and your startup needs access to specialized expertise and capabilities that a research institution would provide you. Examples of this could be cutting-edge equipment, scientific knowledge, or specific research facilities. And collaborating with such a research institution would enable you to tap into the expertise of really experienced researchers and to expand beyond your own capabilities just as a small startup. And by doing so, startups can also bring onto their team additional expertise and skill sets that would help benefit and strengthen their STTR application. Now, it's important to know that the STTR permits up to 60% of the work to be subcontracted to the research institution of your choice. And this helps to provide flexibility for small businesses to collaborate with these really specialized nonprofit research institutions. Now, in contrast to an SBIR grant, these opportunities only allow up to one-third of the work to be subcontracted instead. So if your startup startup really needs to depend on a research institution's facilities and expertise in order to fully carry out the proposed efforts, then an STTR might be the way to go. Now, the second consideration that you have to keep in mind to figure out whether or not the STTR program is the right fit for you is to consider whether or not you want your intellectual property, or IP, to be jointly owned by the startup and that research institution. Many of my clients that go for an STTR application already have established relationships with research institutions like laboratories or research hospitals, and in these cases, those are the entities that own the IP. And so the STTR program provides funding for both the research institution and the startup to not only further progress in their developments but also support in the transfer of that technology and IP to the startup. And that's because the focus of the STTR program is to bring these new innovative ideas towards the commercial market by establishing new products and services. So if your startup is in a situation where you're heavily reliant upon a research institution's or nonprofit's IP portfolio, or are you interested in bringing technology from an academic setting towards the commercial market, that's still must be further developed by the researchers themselves, then perhaps the STTR program might be a good fit for you. Either way, the startup has to make a decision as to whether they think sharing IP rights or co-ownership with that academic institution or nonprofit entity would be aligned to their long-term business objectives. Some of my clients have established licensing agreements so that they can have full ownership of that IP portfolio from the university, or you might consider having a discussion with their technology transfer office to see if you can arrange some sort of licensing or royalty agreement. But either way, if maintaining full control over your IP is of critical importance for you, then perhaps the SBIR program instead might be a better option. And so with that, those are the two reasons why you might consider pursuing non-diluted funding opportunities through the STTR program versus other federal programs like the SBIR. Thank you so much for watching till the end of this video. I hope you found these tips helpful to figure out whether the STTR program is the right fit for you and your startup. And if you haven't done so, please like this video, subscribe to this channel, and leave a comment below so that you can learn other ways to keep your equity throughout your fundraising journey. And of course, don't forget to check out our website at keepyourequity.co where you find lots of other resources to help you in your fundraising journey. Thank you so much for watching to the end of this video, and I'll see you in a video very soon.
