Before even beginning the SBIR or STTR grant application process, there are eligibility requirements that must be met. The most important ones include:
- Being a for-profit organization with a place of business within the United States. Must also be based primarily within the U.S.
- Must have less than 50 percent participation by a foreign business entity.
- Must be more than 50% directly owned and controlled by U.S. citizens or permanent residents of the United States and for most agencies, less than 50% owned by multiple venture capital operating companies, hedge funds, private equity firms, or any combination of these (some agencies allow majority VC-owned startups).
- Must have no more than 500 employees.
However even with the eligibility requirements being met, there are additional requirements established by the SBIR/STTR solicitations before submitting the desired grant proposal. One of the requirements that most small businesses get stuck on is appointing/obtaining a Principal Investigator (PI). This blog post will answer the most common questions small businesses have regarding PIs.
What is a Principal Investigator?
A principal investigator or PI is an individual assigned to an SBIR/STTR proposal by the applicant organization as the leader of the project. A PI is usually a technical expert in the field and knowledgeable enough to lead all aspects of the proposed R&D effort. When a PI is assigned, it means that the applicant organization has decided he/she has the required level of authority and responsibility to lead the proposed project supported by the award.
Who Can Serve as a Principal Investigator?
A PI most often has to be majority employed by the small business at the time of the award. As such it is usually best practice for a startup’s CTO or CSO to serve as the PI. But at times startups also bring in external individuals to supplement the technical gap with the goal of bringing the person on payroll majority time upon winning the award.
It is important to find someone who is credible not just in terms of education but also work and project management experience. A PhD is not required in order to serve as a PI. While it helps to support the individual's expertise, it is by no means a requirement. The PI also does not need to be a US citizen, however they must be legally residing and have the appropriate right to work for the organization within the United States. There are different expectations for PIs depending on whether or not the proposal is an SBIR or STTR.
For SBIR proposals the PI must be considered “primarily employed” by the small business during the SBIR award period. One thing to keep in mind is that not all agencies have the same definition of “primarily employed” but one thing they do all agree on is that the PI cannot be considered a full time employee elsewhere. It is essential to carefully read the solicitation posted by the agency or get in contact with an expert in the field. It may also be helpful to refer to expert consultants who routinely support small businesses through SBIR/STTR applications. If you have the desire to hire a PI that is employed at a university or other research institution, some positions can allow the individual to take a leave of absence or more than 50% employment by the small business until the SBIR process has been completed.
For STTR proposals requirements for PIs are a little laxer, and some agencies do allow the PI to remain primarily employed at a university that is subcontracted by the small business. In either case, the PI must still have a formal role with the small business. The requirements of an STTR also state that the research institution must provide at least 30% of the needed research effort and only 60% of this effort can be subcontracted via an STTR award. This means the other 40% must be provided by the small business. While the STTR PI requirements set a lower bar, it is important to consider who will own the PI if the research institution completes between 30-60% of the research. It is recommended to speak to the research institution and discuss what is to happen if this scenario were to occur before beginning the STTR process.
Where Can I Find a Good PI?
There are many different routes one can take to find a qualified PI. The startup should first look internally within its own technical team to find a suitable candidate. If not available, an expert at a nearby university might be worth researching. Universities and research institutions often list their research staff on their websites, including their contact information. It can also be helpful to get into contact with SBIR/STTR application experts, who have connections with PIs as well as the SBIR/STTR agencies. We at TurboSBIR have successfully helped startups determine the most appropriate PI for their projects, as well as paired startups with suitable researchers to help them win SBIR/STTR applications across several agencies.
References
https://www.neiu.edu/academics/research-resources/office-of-research-and-sponsored-projects/responsibilities-of-principal-investigator-grant#:~:text=A%20Program%20Director%2FPrincipal%20Investigator,the%20project%2C%20intellectually%20and%20logistically
https://www.neiu.edu/academics/research-resources/office-of-research-and-sponsored-projects/responsibilities-of-principal-investigator-grant#:~:text=A%20Program%20Director%2FPrincipal%20Investigator,the%20project%2C%20intellectually%20and%20logistically
https://www.sbir.gov/tutorials/program-basics/tutorial-2
https://science.osti.gov/SBIRLearning/FAQs/Tutorial-15
https://www.nsf.gov/pubs/2017/nsf17029/nsf17029.jsp#q33
https://seed.nih.gov/faqs
https://www.washington.edu/research/faq/whats-difference-pipd-multiple-pi-co-pi-co-investigator-application-pi/
https://icahn.mssm.edu/files/ISMMS/Assets/Research/GCO/SBIR-STTR.pdf
