Hey Inventor,
Every academic spinout seems to start with the same reflex: "We'll get an SBIR"
It feels safe. It keeps the lights on. It buys time in the lab. But... after advising dozens of academic spinouts, I've seen this safety net become a trap.
SBIRs aren't a business model. They are a funding mechanism, not a commercialization strategy.
The SBIR Trap
The trap: Too many startups get stuck in what I call the "SBIR loop." They spend years filing progress reports, securing the next round of grant money, and convincing themselves they're making progress. But when they look up, there are no customers, no clear commercial model, and no path to acquisition. Just another cycle of paperwork.
Grants reward scientific novelty. Markets reward economic clarity.
Confusing the two is the trap.
The Questions That Matter
SBIRs buy time, but they don't answer the questions that matter to acquirers or investors or more importantly... YOU:
- Who pays, and how much?
- What recurring revenue looks like?
- Can this be sold, delivered, and supported outside the lab?
The academic system selects for research brilliance: novelty, rigor, publishability.
The commercial system selects for operational traction: rights secured, unit economics proven, customers signed, acquirer metrics met.
From Research to Revenue
From wet labs to pathogen detection, diagnostics to muscle recovery, and everything in between.
When the science is solid but the commercialization muscle needs work...
When you know the TTO won't save you, SBIRs aren't a business model, and product ≠ publication.
That's the distinction that matters. SBIRs get written for reviewers. Acquisitions happen because a buyer sees unit economics, pilots, and integration. Confuse the two, and you end up with a research project that looks busy but is commercially dead.
The Right Use of Grant Dollars
SBIRs can bridge the gap only if you treat them as fuel for proof, not the destination itself.
Use them to:
- Build prototypes that acquirers can evaluate
- Run pilots with paying partners
- Test pricing assumptions in real-world conditions
- Create data that reduces transaction risk
But don't confuse grant success with commercial success. The market doesn't care about your progress reports. It cares about your ability to deliver value at scale.
The Commercial Reality
Acquirers don't buy research projects. They buy companies that can:
- Generate recurring revenue
- Scale operations
- Integrate into existing workflows
- Provide ongoing support and maintenance
SBIRs can help you get there, but only if you use them strategically to build commercial proof, not just technical proof.
Remember: Grants are a means to an end, not an end in themselves. The end is a company that can stand on its own in the market.