Announcer:   From the National Institutes of Health in Bethesda, Maryland, this is All   About Grants.


Megan: Welcome to another edition of All About Grants. My name is Megan Columbus in NIH's Office of Extramural Research, today sitting here with Dr. Matt Portnoy. He is NIH's SBIR/STTR Program Coordinator. Welcome, Matt.

Matt: Thanks for having me, Megan.

Megan:  Today we're going to be talking about, understanding NIH's Small Business Programs. NIH has a set-aside of money devoted to these programs and we're here to learn from Matt a little bit about the goals and,  how NIH uses these programs. So, Matt, can you talk to us about what the overarching goals is for NIH to support small business research?

Matt: Sure, so it's important at the highest levels to understand that what we're talking about today is small business research and development grants and contracts for the purposes of commercializing technology. There are two programs that the federal government supports for R&D for for-profit small businesses, and that's called the SBIR and STTR programs. And those stand for Small Business Innovation Research and Small Business Technology Transfer Research. These are programs that are mandated by Congress by which agencies set aside a portion of their  extramural budgets to support these programs. And NIH is one of 11 federal agencies that participate in the programs and is the second-largest of the agencies. Approximately,  $717 million in fiscal year 2012 was devoted to these programs.

Megan: Tell me how the program is structured.

Matt: So the programs are structured in phases whereby small businesses need to apply for a Phase I, grant where they're doing a feasibility or a proof-of-concept study. And then, when that's completed, they apply for a Phase II grant, which is a full R&D effort. The main differences are that a Phase I study typically takes six months to one year and is in the range of $150,000 to $200,000. A Phase II study typically takes around two years and in the range of $1 million to $1.5 million.

Megan:  Are those hard limits in terms of dollars?

Matt: The $225,000 for Phase I and the $1.5 million for Phase II are hard limits set by the SBA on this program. As always, with all NIH programs, we strongly encourage anyone thinking about submitting to contact an NIH program official for advice about the program.

Megan:  So, small business programs are actually very important in the federal government. In fact, NIH has money that's dedicated specifically to this program that we can spend on nothing else. Is that true?

Matt: That is correct. The nature of the programs set by Congress are that Congress wanted the federal government to be investing in the private sector, in for-profit small businesses, to encourage commercialization of federally-funded R&D and to get technology into the marketplace using federal dollars as an initial investment.

Megan:  So the message here is, "We're really interested in your ideas and it's worth your time to come investigate and see what we have for you."

Matt: That's exactly right. The program at NIH has a substantial amount of money each and every fiscal year and we have to spend it on for-profit small businesses to do these types of projects. And we are interested in innovative biomedical technology that has commercial potential. This is not research for research's sake or basic research, as many of our other programs fund. This is applied research and technology-focused research.

Megan:  You make a good point. So a small business can also apply for our regular research grants; they're certainly eligible for those as well.

Matt: That's correct. A little-known truth is that for our standard R01 and R21 and many of our other research type mechanisms, small businesses are eligible to reply and this doesn't have the requirements that the SBIR program has with it.

Megan:  I am sure that our listeners out there are wondering what the definition of small business is for these programs. Like, what does that mean in terms of eligibility and their being able to determine whether or not they're eligible?

Matt: . The eligibility criteria are defined by the statute which authorizes the program and is set by the Small Business Administration, and the eligibility criteria are key for this program. There's a very, discrete set of criteria. First of which, the business must be a for-profit business with a place of business in the United States which operates in the US. It needs to be—have 500 or fewer employees. And, importantly, the ownership structure of the company is the key here. The company needs to be a small business that is more than 50% directly owned and operated by one or more individuals who are US citizens or permanent residents, or it could be owned by another business which is itself greater than 50% owned and operated by individuals who are US citizens. A new, critical provision that we're going to be implementing in a few months will be that now companies that are majority-owned by multiple venture capital operating companies, hedge funds, and private equity firms, will soon be able to apply for the program, but not quite yet.

Megan:  Ah, so people should be on the lookout for that information.

Matt: Yeah, we'll be issuing some new funding opportunities and guide notices in the coming months when this provision is available to applicants.

Megan:  Okay, so you talked about funding opportunities. If- I'm a small business interested in looking for information and understanding how the program works, um, should I jump in and should I search or the NIH Guide for Funding Opportunities or should I be going to your small business website? Where should I start?

Matt: I strongly recommend that the start point be the NIH SBIR and STTR website, which is easy to find. It's or you can Google, "NIH SBIR", either way. That website has a full list of information: our funding opportunities, basics about the program, FAQs, and lots of, other available resources available to our small business community.

Megan:  You know, one of the things that I think might be particularly important for small businesses to remember are the registration requirements to apply for grants and for contracts with the federal government. Do you want to talk a little bit about that?

Matt: Absolutely. Many of our small business applicants are first-time applicants to the NIH and, as such, they need to be certainly aware of all of the multiple registration requirements, which are listed in all of our solicitations and funding opportunities. Firstly, companies need to be legally formed, they need to have registered with the IRS and have an EIN number. After that, they'll need to go to Duns & Bradstreet and get a DUNS number. Following that, they'll need to register at the System for Award Management, called SAM, formerly called the CCR if they're familiar with that. And then following that, they'll need to register at two places in order to be able to submit their application: the central federal government grants portal called and the NIH-specific system called NIH eRA Commons. And each of these registrations requires that you do the previous one and it takes at least six weeks to register in all the systems. So we strongly encourage all businesses, as soon as they're interested in thinking about an SBIR or STTR, to go to our website, find a funding opportunity, and get started on the registration process.

Megan:  Absolutely. So for those of you who are listening, if you're interested in the program, it sounds like there's a great website to go learn a little bit more. Start registration now. And, if you're interested, we're going to be following this podcast—with a subsequent podcast on writing a small business application.

Matt: Alright.

Megan:  Thanks for joining us, Matt. For NIH and OER, this is Megan Columbus.

Announcer: For more information on NIH's SBIR program visit or google "NIH SBIR"