The potential SBIR rewards far outweigh the challenges, and with determination, your startup could be the next success story. Photo via Getty Images

Expert: Demystifying SBIR grants for Houston startups

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Grants are everywhere, all the time, but often seem unobtainable for startups. Most companies tell me about their competitors winning grants but don’t know how to secure non-dilutive funding for themselves. It’s true that the SBIR program is competitive — with only 10 to 15 percent of applicants receiving awards — but with a little guidance and perseverance, they are most definitely obtainable.

An SBIR overview

The Small Business Innovation Research program was introduced on the federal level in 1982 with the purpose of de-risking early technologies. While most investors are hesitant to invest in a company that’s still in ideation, the SBIR program would provide an initial level of feasibility funding to develop a prototype. The program issues funds to companies without taking any equity, IP, or asking for the money back.

Since its inception, the SBIR program has funded over 200,000 projects through 11 different federal agencies, including, but not limited to, the Department of Defense, the National Institute of Health, and the National Science Foundation. Federal agencies with R&D budgets over $100 million dedicate at least 3.2 percent of their budget to the SBIR program to fund research initiated by small businesses.

Eligibility and application process

It is no surprise that only small businesses can apply for this non-dilutive funding. For SBIR purposes, a small business is defined as being a for-profit entity, smaller than 500 employees, 51 percent owned by US citizens or permanent residents, and not primarily owned by venture capital groups. This small business must also have the rights to the IP that needs de-risking.

To apply, the small business must have a specific project that needs funding. Normally, this project will have three specific aims that detail the action items that will be attempted during the funded period. Some agencies require a pre-application, like a letter of intent (DOE) or a project pitch (NSF). Others don’t have a screening process and you can simply submit a full application at the deadline. Most agencies published examples of funded or denied applications for you to review.

SBIR phases

Phase I of the SBIR program is the normal entry point for every agency. It takes your product from ideation, through a feasibility study, to having a prototype. While agencies provide various funding amounts, the range is between $75,000 to $300,000 for 3 to 12 months of R&D activities. Applications contain a feasibility research plan (around six pages), an abstract, specific aims, supporting documents, and a budget.

While some programs allow for Direct to Phase II (D2P2) applications, most don’t apply for Phase II until they have secured Phase I funding. This second phase allows companies with completed feasibility studies to test their new prototype at a larger scale. The budgets for this phase range from $600,000 to $3 million and span an average of two years. The research plan is twice as robust and a commercialization plan is also needed.

Tips for success

If you’re wondering if your technology would be a good fit for a certain program, you can start by looking at the SBIR website to see the previously funded projects. The more recent projects will give you an idea of the funding priorities for each agency. Most abstracts will allude to the specific aims, meaning you can get a sense of the research projects that were approved. If you regularly see an agency funding projects similar to yours, you can search sbir.gov/topics for that agency’s research topics and upcoming deadlines.

Your team is one of the most important aspects of the application. Since you will be reviewed by academic experts, it’s helpful to have a principal investigator on your project that has a history of experience or publications with similar technology. Keep in mind that this principal investigator must be primarily employed by your company at the time of the grant. If this individual is employed by a university or nonprofit research organization, consider taking the STTR route so you can utilize their expertise.

Preparing Phase I applications should take no less than eight weeks, and Phase II should take at least ten. Your first step should be read the entire solicitation and create action items. The early action items should be

  1. Completing government registrations, like SAM.gov
  2. Writing your abstract and specific aims
  3. Contacting the program manager or director for early feedback

Any bids, estimates, or letters of support may also take time to receive, so don’t delay pursuing these items.

Don’t stop trying

If you speak to any program officer, they will encourage you to keep applying. For resubmissions, you will have a chance to explain why your previous application was denied and what you’ve done to improve. Most companies receive funding on the resubmission. If you get the feeling that a specific agency isn’t the right fit, reach out to other agencies that may be interested in the technology. You may realize that a small pivot may open up better opportunities.

There are frequently published webinars from different agencies that will give overviews of the specific solicitations and allow for Q&A. If you feel stuck or are still concerned about getting started, reach out to an individual or group that can provide guidance. There are plenty of grant writers, some of which have reviewed for the SBIR program for different agencies, who can provide strategy, guidance, reviews, and writing services to provide different levels of help.

Securing SBIR funding can be a game-changer for startups. While the process may seem daunting at first, with the right approach and persistence, it’s very obtainable. Remember, each application is a learning experience, and every iteration brings you closer to success. Whether you seek support from webinars, program officers, or professional grant writers, the key is to keep pushing forward. The potential rewards far outweigh the challenges, and with determination, your startup could be the next SBIR success story.

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Robert Wegner is the director of business development for Euroleader.

Comcast is looking out for the one-third of businesses in the Houston metro area that are minority-owned. Photo courtesy of comcast.

Tech company to grant funds to Houston-area BIPOC small business owners

comcast cares

Comcast, the telecom, media, and entertainment conglomerate, is awarding $1 million in grants to small businesses in Houston owned by entrepreneurs who are Black, indigenous or people of color (BIPOC).

In all, 100 grants of $10,000 each will be given to BIPOC-owned small businesses in Houston. Local businesses can apply for the grants March 1-14. Grant recipients will be announced in April and awarded in May.

"Unfortunately, many small businesses in Houston were not able to withstand the many months of suppressed revenues [amid the pandemic]. While we remain optimistic about our economic recovery, public-private partnerships will play a vital role in minimizing the disruptions that so many small businesses, specifically minority-owned businesses, are facing," says Vice Mayor Pro Tem Martha Castex-Tatum, who chairs the Houston City Council's Economic Development Committee.

The Houston grants are part of a $5 million investment fund sponsored by Comcast RISE, which launched last year to provide resources to BIPOC-owned small businesses around the country. Under this initiative, grants also will be awarded in Atlanta, Chicago, Detroit, and Philadelphia.

Studies show BIPOC-owned small businesses have been particularly hard hit by the pandemic, and recent research by JPMorgan Chase Institute found that Atlanta, Chicago, Detroit, Houston and Philadelphia were among the top markets for sharp declines in local spending. Additionally, the majority of applications for the marketing and technology services component of Comcast RISE are from these five cities.

To qualify for a Comcast RISE grant in Houston, a BIPOC-owned small business:

  • Must be located in either Harris County or Fort Bend County.
  • Must have been in business for at least three years.
  • Must employ no more than 25 people.

To drive outreach about the program and provide support, training, and mentorship, Comcast also has awarded more than $2 million to six Houston business groups: Houston Hispanic Chamber of Commerce, Greater Houston Black Chamber, Asian Chamber of Commerce, Greater Houston LGBT Chamber of Commerce, Houston East End Chamber, and Cámara de Empresarios Latinos de Houston.

"Small businesses have always played an integral role in Houston's growth and future," Ralph Martinez, senior vice president for Comcast's Houston region, says in a February 9 release. "In the midst of the pandemic, these entrepreneurs provided many of the services and resources that have kept our communities up and running."

About one-third of businesses in the Houston metro area are minority-owned. Among largest metros in the U.S., Houston ranks fifth for the percentage of minority-owned startups (30.45 percent).

Comcast RISE is part of a broader $100 million diversity, equity, and inclusion initiative that launched last summer. In June, Comcast NBCUniversal announced a multiyear plan to allocate $75 million in cash and $25 million worth of media over the next three years to fight injustice and inequality against any race, ethnicity, gender identity, sexual orientation, or ability.

Houston startup Grant Source, which helps its clients find the right grants to apply for, has seen a surge in business amid the coronavirus shutdown. Getty Images

This Houston tech startup is helping businesses find the funds during COVID-19 crisis and beyond

Taken for granted

Since 2015, Grant Source has perfected the art of helping businesses, foundations, and organizations find and secure grant funding — and now their expertise has become vital to COVID-19 response initiatives.

With the devastation caused by the novel coronavirus, America's medical organizations have been scrambling to obtain the funds required to purchase the testing kits, masks, PPE, and other life-saving products needed to help curb the effects of the global pandemic and now, thanks to the mobile and web platform, they're getting the assistance they need to accomplish that goal.

"COVID-19 response is actually our claim to fame right now," says Allen Thornton, founder and CEO of Grant Source. "We have probably done more business in the last few months than we have since we started. Simply because we are helping people find grants with the CARES Act. There's over $500 billion out there, which has created overnight a $40 billion market opportunity for us."

Grant Source has worked extensively with city, county, state, and government agencies to secure grant funding, which is why they have become a game changer for those that need emergency capital to combat COVID-19's challenges.

"Initially, it was scary because we lost some of our clients, but then a bunch of medical clients came to us and asked if we could help them find funding for COVID-19 outreach," Thornton says. "We've found that they have a higher probability of success right now because with COVID-19 outreach, the procurement cycle has gone from six to nine months down to 30 days, which is unheard of."

In addition to telemedicine companies, Grant Source has been helping write grants for clients that range from airports to technology companies in order to help provide them with a path forward in the fight against the novel coronavirus.

Grant Source has created a database and a suite of resources for companies looking for grants. Photo via grantsource.com


Preventing federal funding waste

Outside of the context of a pandemic, the government uses grants as a way to fund ideas and projects that provide public services and stimulate the economy.

Grants are also essential when it comes to supporting critical recovery initiatives and innovative research, but on a fundamental level, very few even know how or where to start when it comes to applying for one and it becomes even more esoteric when it comes to getting funded. That's why so much grant money goes unclaimed, with millions of nonprofits and businesses going underfunded and not maximizing their impact.

"Over $3.2 billion in grant money goes unclaimed every single year," says Thornton. "We have a broken system and we wondered what we could do to change it, so we started Grant Source, our revolutionary grant funding system, to help organizations find and secure money for their mission."

Client-focused services and support

In addition to helping clients find grants, Grant Source assists with the necessary pre-work to apply for a grant.

"We started out as just a database where you could find grants and grant writers," says Thornton. "But in listening to our customers, they wanted us to do everything full service, too. So, I flew all across the country from Minneapolis to Kansas to Los Angeles to Toronto and put all the top grant writing associations on retainer and created what is Grant Source today, which is pretty much mobile for grants."

Thornton says Grant Source has more than 1,500 consultants across the U.S. and Canada, and these professionals each have different specialties — much like a lawyer or a doctor — and relationships in different states.

For a flat fee that ranges from $500 to $5,000 per month, Grant Source will set out to procure its clients grants that range anywhere from $50,000 to $1 million based on their goals. To date, Grant Source has helped businesses and organizations find and secure over $6 million in grant funding.

New clients first sign up for an assessment with Grant Source that establishes what the client's goals are and how the company is set up. Once Grant Source has established a few options for the client, they get started on submitting to the grants. In order to protect its customers from the uncertainty of the process, Grant Source offers investment protection for 12 months.

"We have the investment protection so customers won't be left empty handed," says Thornton. "It's risk free, so if they don't at least get their investment back within the first 12 months, we'll either continue their grant at no cost or we'll give them a credit for the difference."

Founded from a personal need

Treating customers with fairness is important for Grant Source because they started out as a nonprofit seeking grant funding themselves and soon learned that there was a lot that they did not know about the process.

"When I was at UTSA in 2006, the African American graduation population was less than 6 percent, which was unacceptable, so we started a nonprofit," says Thornton. "We made a lot of impact in just a few years. We increased the graduation population from 6 percent to about 38 percent, And, for the 2008 election, we were able to register over 3,200 students."

After graduation, Thornton says he saw an opportunity to expand to other colleges, but lacked funding to do so.

"We saw grants as a huge opportunity and they are, but unfortunately, they're also a huge hassle and it takes a lot of time and energy and effort to even find one that you qualify for," he remembers. "And even when you do, if you don't know how to write the proposal, you're dead in the water."

After the grant process failed, Thornton's money was gone with no communication or valid reason as to why. That frustrated him to the point where he wanted to provide coherent solutions to the problem himself.

"I spent a ton of money on education and researching top grant writing associations," says Thornton. "Most people don't know where to find grants, and there are so many different types of grants and places you can find them. For instance, we're working on a federal proposal with the federal government, there's 26 different agencies that still don't even know how to talk to each other."

Creating a lasting impact

From the outset, Grant Source started creating corporate responsibility programs and impact within a cost center for organizations that were for profit companies. They seek to put them in ideal situations to create the kind of impact that warrants grant funding.

"What we teach our clients is that you can't approach the process with the idea that you will get the grant money and then go out and create come impact," says Thornton. "You have to focus on being able to showcase the impact that you're already creating and then we can go find money for that. If you can articulate the impact of whatever you're doing is creating, we can find the person that cares about that.

In addition providing the software and platform for grant seekers, Grant Source offers a book, courses, seminars, workshops, and conferences that offer the baseline information needed to secure grant funding.

"At the end of the day, Grant Source is a technology platform that helps organizations find money for their mission," says Thornton. "We've streamlined the grant writing process and the grant finding process. At Grant Source, we don't focus on the money, we focus on the impact and then we give people a clear path to make it happen."

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CultureMap Emails are Awesome

Rice Alliance names Houston healthtech exec as first head of platform

new hire

The Rice Alliance for Technology and Entrepreneurship has named its first head of platform.

Houston entrepreneur Laura Neder stepped into the newly created role last month, according to an email from Rice Alliance. Neder will focus on building and growing Houston’s Venture Advantage Platform.

The emerging platform, which is being promoted by Rice Alliance and the Ion, aims to connect founders with the "people, capital and expertise they need to scale."

"I’ve spent a lot of time thinking about what it takes to make an innovation ecosystem more navigable, more connected, and more useful for founders," Neder said in a LinkedIn post. "I’m grateful for the opportunity to do that work at Rice Alliance, alongside a team with a long history of supporting entrepreneurship and innovation."

"Houston has the talent, institutions, and industry base to create real advantage for founders," she added. "I’m looking forward to listening, learning, and building stronger pathways across the ecosystem."

Neder most recently served as CEO of Houston-based Careset, where she helped bring the Medicare data startup to commercialization. Prior to that, Neder served as COO of Houston-based telemedicine startup 2nd.MD, which was acquired for $460 million by Accolade in 2021.

"Laura brings a rare combination of founder empathy, operational experience and ecosystem leadership," Rice Alliance shared.

Neder and Rice Alliance also shared that the organization is hiring developers to design the new Venture Advantage Platform. Learn more here.

Elon Musk's SpaceX files initial paperwork to sell shares to the public

Incoming IPO

Elon Musk's space exploration company has filed preliminary paperwork to sell shares to the public, according to two sources familiar with the filing, a blockbuster offering that would likely rank as the biggest ever and could make its founder the world's first trillionaire.

A SpaceX IPO promises to be one of the biggest Wall Street events of the year, with several investment banks lining up to help raise tens of billions to fund Musk's ambitions to set up a base on the moon, put datacenters the size of several football fields in orbit and possibly one day send a man to Mars.

The sources spoke on condition of anonymity because they were not authorized to talk publicly about the confidential registration with the Securities and Exchange Commission.

SpaceX did not respond immediately to a request for comment.

Exactly how much SpaceX plans to raise has not been disclosed but the figure is reportedly as much as $75 billion. At that level, the offering would easily eclipse the $29 billion that Saudi Aramco raised in its IPO in 2019.

The offering, coming possibly in June, could value all the shares of SpaceX at $1.5 trillion, nearly double what the company was valued in December when some minority owners sold their stakes, according to research firm Pitchbook, before an acquisition that increased its size.

Musk owns 42% of the SpaceX now, according to Pitchbook, though that figure will change with the IPO when new owners are issued shares. In any case, he is likely to pierce the trillion dollar mark because he is already close. Forbes magazine estimates Musk's net worth at roughly $823 billion.

In addition to making reusable rockets to hurl astronauts and hardware into orbit, SpaceX owns Starlink, the world’s largest satellite communications company. The company also recently brought under its roof two other Musk businesses, social media platform X, formerly Twitter, and artificial intelligence business, xAI, in a controversial transaction because both the seller and the buyer were controlled by him.

SpaceX has become the biggest commercial launch company in its industry, responsible for sending payloads into orbit for customers across the globe, but has also benefited from big taxpayer spending. That has raised conflicts of interest issues given that Musk was the biggest donor to President Donald Trump's campaign and is still a big backer.

In the past five years, SpaceX won $6 billion in contracts from NASA, the Defense Department and other U.S. government agencies, according to USAspending.gov.

Among current SpaceX owners is Donald Trump Jr, the president's oldest son. He owns a shares through 1789 Capital. That venture capital firm made him a partner shortly after his father won the presidency for a second time and has been buying up federal contractors seeking to win taxpayer money ever since.

The White House and Trump himself have repeatedly denied there are any conflicts of interest between his role as president and his family's businesses.

8+ can't-miss Houston business and innovation events in April

where to be

Editor’s note: Houston's weeklong innovation festival kicks off April, followed by Rice University's globally recognized pitch competition returning for its 26th year. Plus, find coworking pop-ups, industry meetups, pitch battles and even a crawfish boil on the calendar. Here’s what not to miss and how to register. Please note: this article might be updated to add more events.

March 30-April 4 — H-Town Roundup

Celebrate innovation, entrepreneurship and collaboration at Houston Exponential's sixth-annual H-Town Roundup. During the free event series, previously known as Houston Tech Rodeo, attendees can expect insightful talks, workshops and networking events at venues across the city.

This event began March 30. Register here.

April 2 — Industrious Coworking Day

Enjoy a complimentary day of cowering at Industrious and network with professionals at the Ion. Breakfast, snacks, wifi and workspace tours are included. Following the cowering day, Industrious will host happy hour at Second Draught from 4-6 p.m.

This event is Thursday, April 2, from 8:30 a.m.-5 p.m. at the Ion. Register here.

April 2 — Technology Summit for Women

The fourth annual Women in Tech Cummil will feature speakers across three core tracks: Transformation + Digital strategy, Cyber + Risk + Resilience, and AI in Practice. Pearl Chu, director of technical domains and university relations at SLB, will give the opening remarks. Other panelists come from CenterPoint Energy, BP, Technip Energies and other leading companies.

This event is Thursday, April 2, from 2-5 p.m. at the Ion. Register here.

April 8 — Veterans Business Battle

Hear pitches from veterans and entrepreneurs as they compete for more than $10 million in investments at Rice Businesses' 12th annual Veterans Business Battle. This year, the two-day event will also feature a Small Business Expo, which invites Houston-based, veteran-owned businesses to participate in education, networking and the opportunity to showcase their business. Moonshots Capital and Mercury Fund will also host a fireside chat.

This event begins Wednesday, April 8, at 11 a.m. at the Ion. Click here to register.

April 9-11 — Rice Business Plan Competition

The Rice Alliance for Technology and Entrepreneurship will host the 26th annual Rice Business Plan Competition this month. Forty-two student-led teams from around the world, including one team from Rice, will present their plans before more than 300 angel, venture capital, and corporate investors to compete for more than $1 million in prizes.

This event begins Thursday, April 9. Find more information here.

April 10 — BioHouston Chili Cookoff

Connect with Houston's life sciences community at BioHouston's 21st annual chili cookout. This event is geared toward startup founders, researchers and industry veterans alike.

This event is Friday, April 10, from noon-4 p.m. at Bayou City Event Center. Register here.

April 14 — Mercury Fund Day at the Ion: Agentic Commerce

Don’t miss the latest installment of Mercury Fund Day at the Ion, previously known as Software Day. The recurring monthly event features office hours (by application), a keynote and networking opportunities. This month's topic focuses on agentic commerce.

This event is Tuesday, April 14, from 3:30-7 p.m. at the Ion. Register here.

April 19 – UH Energy Industry Crawfish Boil

Head to the UH Cullen College of Engineering Green Space for the 35th annual UH Energy Industry Crawfish Boil. The event will include a student showcase, STEM activities, a kids zone, live music, networking and, of course, crawfish. Proceeds from the event will support the multidisciplinary capstone fund that aims to increase professional readiness for Cullen College engineering and technology students.

This event is Sunday, April 19, from 1-5 p.m. at the Cullen College of Engineering Green Space. Find more information here.

April 24 — Rice Business Healthcare Conference

Leading experts, innovators and the next generation of healthcare leaders will converge at the Rice Business Healthcare Conference. Hosted by the Rice Business Healthcare Association, the conference will explore AI's potential impact on the sector.

This event is Friday, April 24, from 8 a.m.-2 p.m. at McNair Hall on Rice University's campus. Find more information here.