A source of funding for innovative disruptive startups is Small Business Innovation Research (SBIR) and the Small Business Technology Transfer Grants (STTR), also known as America’s Seed Fund. Eleven federal agencies participate in these programs, providing $4 billion a year in debt-free and equity-free financing. These grants allow pioneering small businesses to explore their technological potential and means of commercialization.
The United States Small Business Administration (SBA) coordinates the programs. His Office of Investment and Innovation (OII) hosted the winners of the inaugural America’s Seed Fund Startup Expo competition held on May 25, 2022. One of SBA’s goals was to get women to apply and participate, and it achieved that goal at the shovel. Seven of the 12 participating companies have women in the founding team or women owners.
“Every day, in communities across America, entrepreneurs are solving our nation’s most pressing challenges, from climate change to feeding and healing the world,” said SBA Administrator Isabella Casillas Guzman. . But women’s innovations are often overlooked.
“The SBA is committed to ensuring that these ideas receive the necessary support from federal programs and innovation ecosystems so they can be commercialized and grow into resilient businesses,” Guzman continued. The Expo showcases outstanding entrepreneurs who have leveraged federal research and development funding through the SBIR/STTR program in four areas:
- Agtech and food security
- Climate and energy
- National Security and Defense
- Supply chain resilience
Participating entrepreneurs are then connected to resources to advance their game-changing innovations.
Network connections are a source of information and business opportunities, which can lead to funding, new markets, customers and top talent. Evidence suggests that female founders have small networks than their male counterparts. A small network can limit the growth potential of startups founded by women. Accelerators provide education and connections, but research shows that women are often underrepresented in these programs.
“We know the public and private sectors need to work together to nurture these small businesses with big ideas for many years to come so they can sustain and grow,” said Bailey DeVries, Associate Director, OII. “America’s Seed Fund Startup Expo will spark big ideas and provide a platform for our national innovation community to support the businesses of tomorrow.”
One of the objectives of the Startup Expo is to foster and encourage the participation of women in innovation and entrepreneurship. Four of the 12 presenting companies were Women-Owned Small Businesses (WSBO), which means that they are at least 51% owned and controlled by women. Three other companies have women at their helm but are not WSBO qualified.
“The giants of future industries so often start out as small start-ups with big ideas,” DeVries said. Obviously, many of these future giants can be founded by women.
One of the WSBO Startup Expo attendees, BadVR (Bring All your Data Into VR), uses augmented and virtual reality (AR/VR) technology to give people the ability to literally step inside their data. Suzanne Borders is the CEO and co-founder. BadVR’s technology makes discovering valuable information faster, easier, and more accessible to everyone. The company is located in Los Angeles, California. It employs 20 engineers, designers and dreamers, with varied backgrounds in computer engineering, neuroscience and cognitive psychology.
The company has received $4.4 million in funding from federal sources, including SBIR grants and contracts from the National Science Foundation (NSF), National Oceanic and Atmospheric Administration (NOAA), National Institute of Standards and Technology (NIST) and AFWERX, a technology company Directorate of the Air Force Research Laboratory (AFRL) and the innovation branch of the Air Force Department.
Typically, seed capital from venture capitalists comes at a high cost. Young companies generally have a low valuation and must give up a large stake in the company in exchange for equity investments. Grants given at the very beginning of a company allow founders to bring in venture capital investors later, when the company’s valuation is higher. BadVR raised a $350,000 pre-seed round in 2019 from angels, friends and family. He is currently raising another little round angel.
“When a lot of people were uncertain about the future of technology, we were always able to move quickly and maintain vision, direction and control,” Borders said. “It also allowed us to grow and hire during a particularly turbulent time for the tech industry when COVID first hit.”
In addition to money, SBIR grants come with other benefits. “We have been blown away by the support from all of the agencies that have funded us, including all of the programs and advice that have been offered,” Borders said. “NSF encouraged us to participate in a bootcamp and the I-Corps program, which was like a technology accelerator that greatly helped us better understand our business model and go-to-market strategy.”
Importantly, agencies also make intros to connect companies with people interested in the company’s technology, whether from a buying or investing perspective.
Being selected to participate in the Expo generated media coverage and industry cache for BadVR. Notably, “Many specific groups we were hoping to connect with – customers and potential investors – have already contacted us since the event ended.”
How do you take advantage of government resources to grow your business?