Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) contracts are a great way to snag some equity-free R&D funding. Solicitations can be difficult to decode and while these are supposed to be competitive bid contracts reserved for US small businesses, that doesn’t mean there aren’t some loopholes. With the dozens of solicitations posted, it can be overwhelming to decide which ones are worth pursuing. The question arises: To bid, or not to bid?

Below is our framework we use to assess which proposals we actually stand a chance of winning and are worth our precious sweat equity hours.

1. Is the Proposal Crafted for a Specific Company?

One of the first things we ask when evaluating an SBIR or STTR topic is whether it was posted with a specific company in mind. While this is not supposed to be how SBIR/STTR is used - it happens EVERY SINGLE CYCLE. These solicitations are called “shaped” or “crafted” topics because they were designed with requirements that only one company can properly meet.

Here’s how we spot a shaped proposal:

Specific or niche jargon. It’s riddled with non-industry standard terms to describe the requirements. If we come across an obscure term we will give it a Google and if a company pops up using the exact same or very similar language to describe their innovation, you’re probably looking at a crafted proposal. This works for phrases and even whole sentences that seem suspect.
Vague Integration Requirements or Non-Public Technical Requirements. If the proposal references things the average defense contractors would not know ahead of a proposal (ie “must integrate with a system currently used” but there are no details provided in the solicitation or Q&A on the requirements for that integration.) it’s a sign that it’s intended for someone with insider knowledge.
Similarity to Previously Awarded Work. Check previous award data for something similar, if there's nearly an exact match, there's a good chance this one was shaped to be just different enough to award again.
Scrutinize the Phase 1 Feasibility Requirements for a D2P2. Most D2P2s are shaped and a waste of time to go after, especially for those new to SBIR (STTR doesn’t offer D2P2s). One of the submission requirements for a D2P2 is a “Phase 1-like feasibility study”. That study cannot be funded by SBIR/STTR. So if we find incredibly specific and obscure feasibility study requirements where it’s unlikely that many companies could demonstrate this work, we know we may be looking at a shaped proposal.

If the proposal seems overly specialized, it may not be the best fit for your team’s current skill set or product development stage. A misaligned proposal could require a significant amount of time and resources to even get to the submission stage, which could end up being a waste of your time and effort if your startup isn’t competitive.

2. How Closely Does the Core Ask Align with Your Business’s Capabilities, Technology, and Expertise?

The success of a proposal hinges on how well the company’s core strengths align with the objectives of the funding agency. If the SBIR/STTR solicitation closely matches existing technology, research focus, or business goals, we know that we are in a much stronger position to submit a compelling proposal.

Key questions to consider:

Technology Fit: Do we have the relevant technology or research expertise to meet the problem the agency is trying to solve?

If you’ve already been working in a related field or have an existing product that fits the request, this could be a good match. If it’s an adjacent technology, you may have a more difficult time demonstrating that your business is the right one to solve the need.

Team Expertise: Does the team possess the right mix of technical and business expertise to respond to the solicitation?

Strong teams are often a key factor in winning awards, so assess whether you have the right personnel or need to seek additional expertise or partnerships.

If the core ask aligns well with your startup’s capabilities, this is an opportunity where your chances of success are much higher. Conversely, if there is a significant gap between your current expertise and what the proposal requires, the effort may be too high relative to the potential reward.

3. What is the Level of Effort for Your Team to Submit/Respond?

Submitting a high-quality SBIR or STTR proposal can be a time-consuming and resource-intensive process, even with the help of AI tools. From writing the technical content to creating detailed budgets and aligning with the proposal guidelines, this effort requires a dedicated team and resources. As a startup, we weigh the potential return on investment before diving in. This means considering:

Proposal Complexity: Does the proposal require substantial technical documentation, testing, or data collection that the team cannot easily provide?

If yes, you may need to recruit external experts or consultants, which will increase your costs.

Time Commitment: Evaluate how much time the team can realistically dedicate to the proposal without disrupting other business operations.

A proposal may require several weeks to months to complete, and this could pull your team away from product development or client outreach.

Probability of Success, or P(Win): If we’re up against a more established competitor who has prior performance with the DoD, it may take more effort to make your proposal stand out.

Weigh this effort against the chances of receiving the award.

If we can allocate the necessary time and resources and have a clear chance of success, this is a good opportunity. However, if the effort seems disproportionately high, reconsider.

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4. Are You Prepared to Scale if You Win the Grant?

Another question we consider before bidding on an SBIR or STTR opportunity is whether our startup is prepared to scale if we win the grant. Winning the funding is just the beginning, and not everyone wants to scale all of the time. The ability to execute on your project will require additional resources, staff, and operational capacity.

Scalability: Do we have the infrastructure and operational processes in place to handle the increased demand if you secure the funding?
Growth Capacity: Will we need to hire additional employees or establish new partnerships to meet the objectives of the project?

If so, are you ready to take on that responsibility?

Being prepared for the post-award phase will not only help you deliver on the contract but also ensure that your startup remains agile and responsive to new opportunities.

5. What is the Competitive Landscape?

Before committing to a proposal, take time to assess the competitive landscape.

Number of Applicants: Some SBIR and STTR solicitations get dozens or even hundreds of proposals. This can make it harder to stand out. If the competition is light, your chances of success improve significantly.

While not a foolproof solution, the number of questions submitted under the topic is a good indicator of how popular it is. More questions = more bidders.

Strategic Fit: Does our startup bring a unique perspective or technology that would give you an edge over other applicants?

If you offer something different from others in the space, this could be a compelling reason to move forward with the proposal.

Final Thoughts & Key Takeaways

The decision to bid on an SBIR or STTR proposal shouldn’t be made lightly. By asking the right questions and evaluating each opportunity carefully, you can identify the proposals with the highest potential for success. A strong alignment between your business’s capabilities, technology, and the proposal’s requirements is critical to increasing your chances of winning.

Takeaways:

Assess whether the proposal is a good fit for your company’s expertise and technology.
Determine the level of effort required and whether your team can realistically meet the deadlines and requirements.
Consider scalability and whether your startup is prepared for growth post-award.
Research the competitive landscape to better understand the chances of success.

If you’re ready to get started with your SBIR/STTR proposal, check out our SBIR and STTR templates and guides to streamline the process and improve your chances of success.

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