How to Sell Your AI Technology to the US Government Using the SBIR and STTR Programs
The U.S. Government is one of the world’s largest buyers of technology. Every year they invest billions of dollars in research and development. For small businesses with cutting-edge AI technology, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs offer an unmatched opportunity to access government contracts, secure equity-free funding, and potentially scale their businesses. Below we explain how these two programs can help you sell your AI technology to the government, and how to navigate the application process to maximize your chances of success.
What are the SBIR and STTR Programs?
Before diving into the specifics of how to sell your AI technology, it’s important to understand the distinction between the two programs.
SBIR: The Small Business Innovation Research program provides funding to small businesses (under 500 employees) to conduct early-stage research and development (R&D) that addresses specific government needs. The program is highly competitive, but it provides significant funding and support to develop your technology and bring it to market. Read our more detailed breakdown of the program here.
STTR: The Small Business Technology Transfer program is similar to SBIR, but it requires collaboration with a nonprofit research institution (such as a university or federal lab). This collaboration is meant to foster the commercialization of new technologies that combine both the expertise of the business and academic research. Read our more detailed breakdown of the program here.
Both programs are effective ways for small businesses to bring new innovations, including AI technologies, to government agencies that need them.
Why the Government is Interested in AI
The government is investing in AI technologies for a range of applications, including national defense, healthcare, cybersecurity, and transportation. For AI technology providers, this creates a significant opportunity to develop solutions that serve government needs, while also benefiting from public funding and support.
How to Sell Your AI Technology Using SBIR and STTR Programs
Selling your AI technology to the government through the SBIR and STTR programs requires a strategic approach to stand out from the competition. Below are the steps you should take to successfully apply for and win government contracts:
1. Understand the Government's Needs
The first step in selling your AI technology to the government is understanding the specific needs of federal agencies. Agencies like the Department of Defense (DoD), the Department of Health and Human Services (HHS), the National Aeronautics and Space Administration (NASA), and others regularly issue topics in their solicitations that outline the problems they are looking to solve.
- Identify Relevant Topics: Regularly monitor the SBIR.gov website or SAM.gov for new solicitations that match the capabilities of your AI technology.
- Study Past Awards: Review past SBIR/STTR awards to identify trends and get an idea of what kinds of AI technologies have been successful in securing government funding.
- Contact Program Managers: Reach out to program managers at the relevant government agencies to better understand their needs and discuss how your AI solution aligns with their requirements.
2. Prepare a Strong Proposal
The SBIR and STTR programs require a detailed proposal outlining how your AI technology will meet the government’s needs. Make sure your startup is ready to do business with the government as the process can take a few weeks time. A strong proposal is essential for securing funding, so here are key elements to include:
- Problem Statement: Clearly define the problem your AI technology addresses. Use real-world examples that demonstrate the impact of the problem and the government’s interest in solving it.
- Innovation: Highlight what makes your AI solution innovative. What sets it apart from existing solutions, from your competitors, and why is it a game-changer for the government agency in question?
- Technical Approach: Describe the technical details of your AI solution, and be sure to align it with the government’s objectives outlined in the solicitation.
- Feasibility: Provide evidence that your AI solution is technically feasible and scalable. This includes milestones, timelines, and any preliminary data that demonstrate its viability.
- Commercialization Plan: While the government is primarily funding R&D, you must show how your technology will eventually be commercialized and scaled. Highlight potential market opportunities for your AI product beyond government contracts.
Avoid common mistakes other small business owners have learned the hard way.
3. Leverage the STTR Program’s Collaboration Requirement
If you are applying for an STTR grant, you will need to partner with a nonprofit research institution such as a university or a federal laboratory. This collaboration can help you access advanced research expertise, improve your technology, and enhance the credibility of your AI solution.
- Choose the Right Research Partner: Select a research partner with expertise in AI or the specific area you are addressing. This partnership can strengthen your proposal and increase your chances of success.
- Build a Strong Relationship: Foster a collaborative relationship with your research partner early in the process to ensure that both parties contribute meaningfully to the development of the technology.
4. Be aware of the SBIR/STTR Phases
The SBIR and STTR programs are divided into three phases, each with different goals and funding levels. As an AI startup, it’s important to understand these phases and how to navigate them:
- Phase I: This phase typically provides funding for feasibility studies to prove that your AI technology works as proposed. For AI projects, this may involve initial model development, testing, and validation.
- Typical Funding: Up to $250,000 for 3-12 months.
- Phase II: If you’re successful in Phase I, you can apply for Phase II funding to develop a fully functional prototype of your AI technology. This phase is about advancing the technology to a commercial-ready stage.
- Typical Funding: Up to $3 million for 18-36 months.
- Phase III: This phase involves commercialization of your technology. While SBIR/STTR funding does not provide direct support in Phase III, it is expected that you will secure government contracts or private-sector funding to bring your technology to market.
5. Build Relationships and Network
Building relationships with key decision-makers in government agencies is crucial for the long-term success of your AI business. Attend SBIR/STTR conferences, matchmaking events, and networking sessions to connect with program managers, potential collaborators, and other small businesses working in the AI space.
- Government SBIR/STTR Conferences: These events allow you to learn more about specific agency needs and solicitations while giving you the opportunity to network with experts and potential partners.
- Use the NIH, DOD, and other government hubs: Agencies like the National Institutes of Health (NIH) and Department of Defense (DoD) host resources and events to help small businesses navigate the process.
6. Prepare for a Long Sales Cycle
Government procurement processes can be lengthy, especially for R&D and technology development projects. Be patient and persistent, as it may take several months before you hear back about your application. Stay in touch with program managers, and if you’re not successful in one round, use the feedback to improve your proposal for the next cycle.
The SBIR and STTR programs provide a pathway for small businesses with innovative AI technologies to secure funding and sell their solutions to the government. By carefully researching government needs, preparing strong proposals, leveraging partnerships, and navigating the phases of the program, your AI business can access valuable contracts and build a strong foundation for future growth. While the process may be competitive, the potential rewards—both in terms of funding and government contracts—are well worth the effort.
By tapping into these resources, AI startups and small businesses can not only contribute to the advancement of critical technologies but also position themselves for commercial success. With persistence, a solid understanding of government requirements, and a strategic approach to development and commercialization, you can adapt or extend your AI innovation into a viable product that meets the needs of the U.S. government.
Use our previously funded proposals to get you started or inform your AI proposal writer.
