3 Tips for Medical Device SBIR Grant Budgets
SBIR grants are an excellent way to generate non-dilutive funding for early stage medical device startups and entrepreneurs looking to develop an idea into a product. The National Institutes of Health (NIH) and the National Science Foundation (NSF) are two organizations which accept SBIR grant applications throughout the year and are frequent vehicles for early stage funding. One of the key activities in submitting for SBIR grant funding is the development of a budget which dictates how you anticipate the funds will be used. Here we offer up three tips on how to maximize the effectiveness of your SBIR grant budget:
Up to 33% of the SBIR Grant Phase I Award and 50% of the SBIR Grant Phase II Award can be applied to a subcontractor or medical device consultant. For entrepreneurs or early stage medical device startups (“Small Business Conerns” or SBCs) this is often the most effective use of SBIR award funds to ramp up quickly on early stage R&D, and is frequently how Ontogen Medtech participates in grant-funded product development. For example, with a maximum NIH phase I award amount of $256,580, up to $84,671 can be used toward external medical device development services.
Technical and Business Assistance (TABA) can provide an extra $6500 in grant money for Phase I and up to $50,000 for Phase II. It is possible for TABA funds to be requested above and beyond the listed award caps for Phase I or Phase II grants. The SBC can decide which vendor they would like to use for TABA support, but note that the TABA vendor may not be the SBC, an affiliate of the SBC, an investor of the SBC, or a subcontractor or consultant of the SBC otherwise required as part of the paid portion of the research effort. Examples of technical and business services that can be supported by TABA Funding include, but are not limited to:
Access to subject matter experts
Assistance with product sales
Intellectual property protections
Market research and/or validation
Development of regulatory plans
Development of manufacturing plans
Access to technical and business literature available through on-line databases
TABA costs cannot go toward:
Activities that the recipient can provide internally
General maintenance of or investment in an applicant/division within the small business, an affiliate/investor of the small business, or a subcontractor/consultant required as part of the awarded Phase I or Phase II
Contributions to the SBIR/STTR fee
Audit services
Bookkeeping services, including payroll management or general accounting services
A ‘FEE’ of up to 7% of total costs can be included in the budget, which is considered as a reasonable profit for the SBC and can be used for any purpose. For example, with a maximum NIH phase I award amount of $256,580, a Fee of up to $17,960 can be requested, and for a maximum Phase II award of $1,120,586 the Fee can be up to $78,441!
If you would like to discuss an upcoming SBIR grant application or if you need help navigating the SBIR process for a medical device submission please reach out to us.
