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SBIR Funding: Dreadfully Wonderful
by Dan White on 09/10/13 05:45:00 am   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

So, you have a brilliant product idea and you think Uncle Sam should fund it. I can't blame you. Compared to VC money, SBIR (Small Business Innovation Research) funding comes with relatively few strings attached. Most importantly: you don't have to give up any equity. So what's the catch? I'm glad you asked! One, the funding rate is low (typically ~15%), and two, the application process will make you cry and beg for mercy. Before applying for an SBIR, steel yourself to write dozens of pages of argumentative text in answer to an extensive list of intimidating questions, buried within a dense application that's riddled with esoteric rules.

"No problem," you say. I'm a good writer and can craft compelling arguments to boot. Congratulations! That's a great start, but you can't just shoot from the hip. Those dozens of pages need to be comprised of clearly written claims that are substantiated by research and other forms of evidence. The first SBIR I wrote took longer than my Master's Thesis, and I had help.

By now you're no doubt teeming with excitement. But wait, there's more! SBIR RFPs are typically released in November and proposals are due in January, so plan to not enjoy your holiday. Option A is to spend your holiday writing your proposal and Option B is to spend your holiday racked with guilt for eschewing Option A in favor of relaxing and spending time with your loved ones. Also, assuming you submit on time (yes, I had a proposal rejected for being five minutes late), your fate will rest in the hands of a review panel (AKA, a collection of human beings) and be subject to all the unwitting biases and blind spots therein. Good proposals will sometimes get rejected and bad proposals funded. Tough potatoes.

But you, dear reader, having ventured this far, are clearly indefatigable...or a masochist. Either way, I like the cut of your jib, sir/madam! After all, the hurdles described above aren't accidental. They're the mechanisms that separate the wheat from the chaff, as it were. People often refer to SBIR dollars as "free money,' which is true assuming you don't value your time. Still, the grueling application process is a necessary defense against the masses of startups that flock to no-strings capital as a matter of course.

Alas, I digress. If you're reading this then you're likely a gamer, which means you no doubt expect an award for "beating" the first four paragraphs of this article. Fair enough. The following are pointers that will help you power up your proposal; free advice on how to obtain free money, if you will:

  1. Prepare. SBIR proposals require a sizeable time investment. Don't wait for the RFP to be released. Use the prior year's RFP to get started early.
  2. Program Officers can review draft proposals in advance of the RFP and offer sage advice. Get with them early and often.
  3. Don't seek funding for products that aren't innovative/risky. Incremental advancements are not the purview of most SBIR programs.
  4. Don't seek funding for products that aren't sustainable. You don't need to pitch hockey stick growth curves; you just need to show how you will generate substantive taxable income over time.
  5. Make sure your business case is evidence-based. Substantiate every claim.
  6. Include both bottom-up and top-down market analyses. Don't say, "the market is X big so we only need to capture Y% to get filthy rich." You will diminish my faith in humanity.
  7. Hey, there's an "R" in there! It stands for Research. If you don't have a fancy degree or extensive experience conducting research, you'd best...
  8. Line up some good partners: researchers, pilot test subjects, distributors, etc. On a related note...
  9. Letters of support are invaluable. Don't underestimate their value, especially letters from prospective customers who express an earnest interest in your product.
  10. Ideally, create an MVP and initiate diligence before the RPF is released. All told, you'll likely invest more than you're awarded, so it's more important to convince yourself of the market potential than the review committee.
  11. If you heed nothing else I've said, heed this: save time for the appendixes!

Bottom line: SBIRs are great. Winning them is even better. They offer fledgling companies a chance to acquire sizeable chunks of cash without the perils of venture capital. The up-front time investment is high and the odds of success aren't, but if you're an entrepreneur, that's obviously not going to stop you. Good luck!


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Comments


James Yee
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*Raises his hand*

Okay, so I read the whole thing, but I have to ask, what kind of businesses can be funded using an SBIR? I mean it doesn't sound like a game dev studio is something to fund using this and hence an odd story to have here on Gamasutra. Did I miss something?

Maxwell Zierath
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Lots of businesses can be funded through SBIR, including game devs. Although the RFP that goes out with them may be looking for advancement in a specific field (such as when the Department of Ed does theirs). Basically, if you want to get off the ground as a start up game dev, seeking SBIR funding is a legitimate alternative strategy to gaining initial investment and building a base for the company.

For instance, Filament has won SBIR grants specifically for creating games.

Gene Koo
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Filament develops learning games, so the funder here was the U.S. Department of Education. There are many agencies investigating video games / gamification / etc to achieve their goals, so other SBIR programs might suit you better. (I was one of Dan's partners in securing this grant : http://1.usa.gov/17tgRPa ).

As with any funding source, you need to invest. If you've done government funding before, SBIRs will be relatively easy to apply for. If not, it may take a lot of time to learn the ropes, network with the appropriate officers, and probably fail before you succeed. (And grant programs are not great places to rapid-iterate -- failure can mean a 1-year wait.)

Dan White
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Hey James, game development studios (with fewer than 500 employees) are as eligible as any other business to receive SBIR funding. The "catch", I suppose, is that the government cares about specific things. For example, the U.S. Department of Education cares about, you know, education. So if you want to pitch a game to the DOE's SBIR program, your game should teach people things. For better or worse, until there's a U.S. Department of Entertainment, SBIRs will not be a viable way to fund games whose sole purpose is to entertain.


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