Before venturing down the path to becoming a lawyer, I spent several years building up a start-up drug development company.
One of our key concerns, especially as a start-up pharmaceutical company with significant overhead, was finding the funding necessary to build and grow our business. While some start-ups are fortunate enough to gather initial funds through the “three Fs” (Family, Friends, and Fools), most need outside help.
While venture capital or angel investments are an option, they are often not a realistic option for an early stage science-based business. Most private equity investors won’t take on such a high-risk investment without substantial data to validate the technology, even if the potential return is significant. Therefore, one of the best alternatives is Federal grant money.
SBIR (Small Business Innovative Research) and STTR (Small Business Technology Transfer) programs distribute more than $2.5 billion every year to qualifying small businesses. These two programs consist of three separate grant phases: Phase I, Phase II, and Phase III. The Phase I program focuses on evaluating the feasibility of the idea, while Phase II allows companies to develop a prototype. In Phase III, a company typically focuses on commercialization and receives funding from sources other than the federal grants programs. While each specific program varies, generally a company will receive valuable support and advise for generating a commercialization strategy.
At the conclusion of the program, participants along with local businesses and entrepreneurs, government agencies, universities, and investors attend a national conference that rotates cities every year. Grant participants are given the opportunity to pitch their business while local start-ups have a chance to learn more about applying to these federal programs.
This November 13-15, Portland will host the Small Business Research Innovation Conference at the Doubletree Hotel. If you are a small business looking for federal funding, I highly suggest you attend the conference and speak with the federal program managers on hand. It is also a great opportunity for local Oregon businesses and entrepreneurs to network with government officials, investors, and other business owners. I, for one, will be there.