So you’ve invented a new health technology, and you want to commercialize it by starting a for-profit company. How do you fund this early spinout? Non-dilutive funding from the National Institutes of Health (NIH) through the Small Business Innovation Research (SBIR) program is a great way to start.
Is This Post for Me?
The applicants preparing grants for startup companies come from diverse professional backgrounds. If you have an academic background, a PhD in science or engineering, experience preparing awarded R01s or academic fellowships, and are currently trying to spin out a technology from an academic lab into a commercial product, I am writing this post specifically to you. Consider this an introduction for teams that have landed traditional research grants before, but haven’t tackled an SBIR yet.
If you are an expert who has already been awarded multiple SBIR grants, you will likely find this post a bit too introductory. However, if you are a science or engineering professional with some grant experience, welcome!
Is a Startup Grant Like an Academic One?
When I made my headlong leap from academic research into a health technology startup back in 2015, I didn’t know what I was getting into. I came on board as employee number two, joining just the founder and one other employee. That meant we had to bulldoze through everything that needed to be done, regardless of whether we were well-qualified for the work or not. We all dove into domains we didn’t know yet.
The first time I sat down to write a grant application for our company, I breathed a huge, happy sigh. It was an absolute relief to start an effort from a position of skill instead of from the very bottom.
Sure, the specific formatting requirements of an SBIR grant are different from academic and fellowship grants—the emphasis, process, page numbers, and section requirements are unique. But remember: you are still talking to other scientists. The minor details can be learned.
Imagine my surprise when I later attended “grant writing for startup” seminars, where grant experts claimed that grants for startups are nothing like academic grants!
I say, hogwash.
If you have ever prepared a successful grant application or a research paper, you already possess the important skills needed to secure a grant for a startup. In fact, preparing that application might just be the most familiar skill set you use at your startup, save for building and testing your actual technology. Take heart; you aren’t starting from the beginning.
Startup Funding is Not a Three-Course Meal
There is a persistent thought error in the MedTech, Biotech, and Health tech space that funding must look like a rigid, linear three-course meal. The myth goes like this: you start with non-dilutive funding, set it aside when you finish, move on to equity financing for your second course, and finally set that aside once you achieve revenue.
Successful fundraising is much more intermixed, nuanced, and bespoke. You might start with a dash of non-dilutive funding, sprinkle in some venture funding, add some non-dilutive revenue, and then layer on a much larger non-dilutive grant.
At Enspectra Health, we built a diversified funding stack. We pulled in revenue early on by selling research-use systems to major universities before we even achieved our 510(k) regulatory clearance. We combined that early revenue with angel and venture capital equity investments, partnered with corporate giants to power research studies, and secured over $8 million in non-dilutive research grants from the NIH SBIR program.
I still hear founders say, “Well, we’re beyond the stage of non-dilutive funding.” I challenge you to re-examine that assumption. Non-dilutive capital has a place long after company founding; it just shifts to fit into different corners of your company over time.
The Three-Number Framework for Choosing Grants
The world of grants can easily become overwhelming due to the massive volume of documentation and instructions. I recommend distilling each grant opportunity into three critical numbers:
💰 The maximum size of the possible award
🎲 Your probability of getting that award if you apply
🥵 The amount of effort you must put into preparation
Before you waste months searching the internet, sit down and determine what ranges make sense for your company. What amount of money is actually meaningful to move the needle for your current milestones?
For instance, at Enspectra, our threshold for a meaningful award size was high. We purposefully looked for awards over $1 million. Defining that single parameter cut out about 99% of possible grant opportunities, narrowing our focus to the SBIR program.
What about one-off, “moonshot” type funding awards? Over the years, I noticed that these types of opportunities generate a massive amount of press, but they rarely offer much money, and everyone applies for them. These days, I approach one-shot opportunities with the same three-number framework I introduced here—and also a healthy dose of skepticism.
Who Funds Health Innovation: NIH vs. NSF & DOD
Let’s get back to the SBIR program. What agencies fund health innovation?
When you attend introductory grant presentations, speakers love to present the NIH, National Science Foundation (NSF), and Department of Defense (DoD) as equivalent bullet points for health innovation funding.
This is misleading. Of all the recent SBIR projects associated with health innovation, the NIH is responsible for funding over 80% of them. The NSF and DOD handle the remaining fraction of the SBIR health projects, and they are far more likely to fund niche-mission technologies rather than mainstream regulated MedTech and Biotech products. If you are building a regulated health technology, look first at the NIH.
Demystifying the Review Process
While the actual review process will always feel slightly mystical because the reviewers are anonymous, you can gain a massive advantage by understanding that your reviewers come from diverse professional backgrounds. I like to read applications through the lens of three prototype reviewers:
🎓 The Academic Domain Expert: They know your specific science and will spot inaccurate or imprecise claims.
💪 The Competitor: They actively work on competitive technologies. When you highlight the advantages of your technology, you must remain completely fair, respectful, and highly precise regarding the disadvantages of your competitors.
👔 The Commercialization Operator or Investor: They understand the broader startup ecosystem, commercialization realities, and business development.
Official NIH reviewers follow a strict rubric, assigning impact scores across five major areas: Significance, Investigator, Innovation, Approach, and Environment. However, reviewers are human. They develop an immediate gut feeling of excitement or disappointment as they read. Your goal shouldn’t just be checking off rubric boxes to chase points. It should be crafting a compelling narrative that drives genuine inspiration.
A Quick Word on AI Rules
At the NIH, reviewers are forbidden from using AI to review applications. It’s possible that a reviewer may use AI anyway. How would a large language model (LLM) chatbot evaluate your application compared to previously awarded grants? You should check yourself before sending in your application.
What about applicants? Can an applicant just use an LLM chatbot to write the whole thing? No. As an applicant, you are barred from using AI for substantial ideation or primary composition, though you can use it for editorial checks, formatting, or basic searching.
Does that mean no one is using AI for primary composition of their grant applications? No.
Like everywhere else, AI-generated content has flooded grant application venues.
Because many applicants inevitably overwhelm the system with polished, non-specific slop, creating a surgical, human-driven narrative would give you a competitive advantage. How can you display your humanity to stand out from the crowd of robots?
Timelines, Realities, and Shots on Goal
Why will your first SBIR grant application take so long? Preparing an SBIR grant application holds up a mirror to your company. It isn’t just the actual writing of the application that consumes time; it’s the process of forcing yourself to address all the addressable deficiencies in your company. The most common deficiencies I see include a limited network of domain experts who can write letters of support and join or consult for the company as-needed, underestimating regulatory or quality efforts, or lacking a clear Go-To-Market (GTM) strategy specifying exactly who will make that very first purchase.
Who is the Principal Investigator (PI) of the project? I want to keep my full-time academic job. SBIR projects require the PI to be at least 51% employed by the small business at the time the award is made. It’s not possible to be both the primary PI and a professor at a university. But it is possible to apply before having a full-time PI.
How long does it take? If you have already addressed your structural deficiencies, know what project you plan to fund, understand the costs and budget, have an extended team, possess crisp visual graphics for your preliminary data, and have a flawless grasp of existing literature, you could finish an application in 2 to 3 weeks. Realistically, if this is your first time, expect to spend at least two to three months of full-time focus.
The Submission Cycles: The NIH SBIR program operates on three hard deadlines per year: January 5th, April 5th, and September 5th.
The Waiting Game: You will receive a rough score from the review committee about two to three months after submission. The official Notice of Award arrives a few months after that, meaning it takes at least six months from initial submission to pulling funds into your bank account at a minimum.
What if You Get Rejected?
The nominal success rate for SBIR grants is low, typically around 5% to 10%, depending on the Institute.
If your initial application gets rejected, it is not a failure—it just means you are only partway through the process. Think of it like a scientific paper receiving a reject with suggestions for major revisions notice. You get two shots on goal with NIH SBIRs, and you should plan to take both. Use the reviewer feedback as a precise roadmap to write a highly nuanced, powerful resubmission for the next cycle.
Stop Going Small
If there is one piece of advice I can leave you with, it’s this: Stop applying for non-dilutive awards that are too small to make a difference. Your time is your most valuable resource as an entrepreneur. Don’t waste weeks churning through tiny grants or local pitch competitions if the funding amount won’t move your technology forward. Go bigger.
Who Can Help?
If you need a guide, you don’t have to navigate this complex funding landscape alone.
NIH Institute program officers. You can and should email your program officer directly to schedule a call. They will help you determine mission fit.
Federal and State Technology (FAST) providers available in nearly every state. Most states have a dedicated office designed to help small businesses secure federal funds, and they are highly incentivized to help you bring federal dollars into the state. Find your state here: https://www.sbir.gov/community/fast
And, of course, you can always ask me! Shoot me an email or schedule a call. If I have some bandwidth, I’d love to answer your questions quickly and on the house.
I founded Goldenrod Funding as my personal passion project, and it is now my full-time mission. I love to help deserving health innovation startups ramp up to high-impact federal funding while skipping the painful early churning process. Goldenrod runs lightweight, small-cohort courses where you maintain your story and domain expertise, and I pitch in with specialized grant success strategy—all at a fraction of the cost of full-service consulting.
To learn more, visit goldenrodfunding.com/bouvier.
