In this video, Stacy Chin, founder of keepyourequity.co, outlines five compelling reasons why science and technology startups should consider applying for Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants in 2024. She begins by noting the difficulty of raising equity during a looming recession, especially for high‑risk, early‑stage ventures, and positions SBIR/STTR as a non‑dilutive financing alternative that can bridge the gap between concept and market‑ready product. The second reason highlights the prestige and market validation that comes from securing a federal grant, which can signal credibility to investors, customers, and partners. The third reason emphasizes that these grants do not require equity, allowing founders to retain full ownership and control. The fourth reason explains how SBIR/STTR programs are uniquely designed to fund high‑risk R&D, enabling ambitious scientific and technological projects without immediate commercial pressure. Finally, the fifth reason describes the phased structure of the programs—Phase 1 (up to $500k) and Phase 2 (typically $1‑2 million)—and how success in Phase 1 improves chances for Phase 2 funding and eligibility for state matching grants, effectively multiplying available resources. Throughout, Chin encourages viewers to explore further resources on her website and subscribe for more guidance on preserving equity while securing funding.
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In this video, I'm going to share 5 reasons why you should consider SBIR and STTR funding in 2024. And these tips are going to provide you founders with the necessary insights to understand how these programs can propel your startup into new heights in this crazy competitive tech landscape. Hey guys, welcome back to the channel. I'm Stacy Chin from keepyourequity.co, and our mission is to help startups secure non-dilutive funding. We specialize in helping science and tech startups secure funding from federal programs such as that from the SBIR and the STTR. So if you're interested in learning more about these programs, I'll leave a link in the description to another video below. And we also help lots of other businesses in the private and public sector as well as NGOs in navigating the federal grants and contracting landscape. So my first reason as to why startups should consider SBIR or STTR funding in 2024, because today it is quite difficult to secure equity-based fundraising, especially when a recession is heading our way. And in general, for many startups, securing equity fundraising from venture capitalists angel investors can be challenging, and this is especially true for science and tech startups since these companies are developing high-risk new innovations. Equity-based investors may consider these early-stage companies a bit too risky for them to invest in, especially in the early days. However, they may consider jumping in down the road once the startup further de-risks their technology and technical hurdles. But to do so, you're going to need funding to support your R&D efforts. And that's when the SBIR and STTR program can come in to save the day. These programs are meant to fund startups to support high-risk and high-reward projects that might not yet be appealing to private investors. And this non-dilutive funding opportunity could be a great way to bridge the gap between initial concept and a market-ready product, reducing the risk profile of the business, making it way more attractive for an equity investment in the future. And additionally, the prestige and validation of securing a governmental grant can in itself be a super compelling factor for future investors and even customers. And that leads to my reason number 2 of why you should consider SBIR funding in 2024. And that is because securing an award will give you and your startup validation and credibility. If you're one of the lucky ones that have secured SBIR or STTR funding, this can be a powerful endorsement from the federal government signaling to the market that your technology has been rigorously evaluated and deemed worthy of an investment by a panel of experts. And this level of validation can be very crucial, especially in the early days of a startup's life cycle, especially when a company might lack the substantial track record of market presence to independently assess the validity and potential of the technology or business idea. So therefore, securing SBIR Securing SPR funding in this manner can be a great way to validate your startup's potential and to provide your company with a competitive edge, making it very appealing to customers, partners, and future investors. Now, my third reason as to why you should consider SPR and STTR funding in 2024 is because this program can give you non-dilutive funding. And this aspect is particularly crucial for startups, especially in the early days, who still want to maintain full control and ownership. In the traditional venture capitalist or angel investor raises, securing financial backing typically involves trading a portion of your company's equity equity in return for the investment, and this exchange often leads to the dilution of the founder's ownership stake, potentially reducing their control over the company's direction and decisions. In contrast, SBIR and STTR grants provide funds without demanding any equity in return. That means startups can leverage these grants to propel their R&D efforts, scale their operations, and refine their products without worrying about diluting their ownership. And reason number 4 as to why startups should consider SBIR and STTR funding in 2024 is because these programs are an excellent way to support research and development, or R&D, efforts for new innovative scientific or technology endeavors. So the SBIR and STTR program are uniquely positioned to support early-stage R&D activities, particularly those that involve a higher degree of risk. And this characteristic is a fundamental aspect that sets this program apart from typical private investment channels. And these federal programs understand the nature of scientific and technology innovation. It's a path fraught with uncertainty, and breakthroughs can be very unpredictable. So providing funding for these types of R&D efforts These grants enable startups to undertake ambitious, innovative projects without the pressure of immediate commercial success. Finally, my last and fifth reason as to why you should pursue SBIR and STTR funding in 2024 is that securing a grant can actually serve as a potential gateway to secure even follow-up and further funding. The SBIR and STTR program is structured into distinct phases, with Phase 1 and Phase 2 being the most common. In Phase 1, startups can even secure up to $500,000 at times, depending on the agency, to pursue R&D efforts to validate the proof concept. And if you're one of the lucky ones who have secured a Phase 1 SBIR grant, then likely you have a chance to pursue a follow-up funding round within Phase 2 to support your commercialization effort. Here, startups can secure anywhere from $1 to $2 million of non-dilutive funding. And being a Phase 1 awardee actually significantly improves your chances of getting a Phase 2 SBIR awarded. Additionally, many states have federal programs in place to further support SBIR awardees, and these programs sometimes offer matching grants, which means that additional funding is available to match the amount provided by the SBIR program. And this supports only typically available to SBIR awardees. So pursuing these matching opportunities could be another effective way to just double the resources available to a startup. Who doesn't want more free money? And so with that, thank you so much for watching until the end of this video. I hope you found these tips helpful if you're thinking of pursuing an SBIR or a CTR grant in 2024. And if you haven't done so, please like this video and subscribe to this channel so you can continue to learn new ways to keep your equity throughout your fundraising journey. And as always, don't forget to check out our website at keepyourequity.co where you'll find lots of other resources, templates, and soon courses to help you secure SBIR our funding. And with that, thank you so much for joining me today, and I'll see you in the video very soon.
