Federal Grants Fund Female Founders While Expo Makes Connections
A source of funding for innovative disruptive startups is Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants, also known as America’s Seed Fund. Eleven federal agencies participate in these programs, providing $4 billion a year of debt- and equity-free funding. These grants enable pioneering small businesses to explore their technological potential and ways to commercialize.
The U.S. Small Business Administration (SBA) coordinates the programs. Its 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 the SBA’s goals was to have women apply and participate, and it accomplished this goal in spades. Seven of 12 participating companies have women on 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 Isabella Casillas Guzman, administrator of the SBA. But women’s innovations are often overlooked.
“The SBA is committed to helping ensure that those ideas receive the necessary support from federal programs and innovation ecosystems so that they can commercialize and grow into resilient businesses,” continued Guzman. The Expo showcases exceptional entrepreneurs who have leveraged federal research and development funding through the SBIR/STTR program in four industries:
- Agtech and food security
- Climate and energy
- National security and defense
- Supply-chain resiliency
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 financing, new markets, customers, and top talent. Evidence suggests that female founders have smaller networks than their male counterparts. A small network can limit the growth potential of female-founded startups. Accelerators provide education and connections, but research shows that women are often underrepresented in these programs.
“We know the public and private sectors must work together to nurture these small businesses with big ideas over many years so they may sustain and grow,” said Bailey DeVries, associate administrator, OII. “America’s Seed Fund Startup Expo will lift up big ideas and provide a platform for our national innovation community to support the businesses of tomorrow.”
One of the Startup Expo’s goals is fostering and encouraging women’s participation in innovation and entrepreneurship. Four of the 12 presenting companies were Women-Owned Small Businesses (WSBO), which means they are at least 51% owned and controlled by women. Three other companies have women leadership but don’t qualify as WSBOs.
“The giants of future industries so often start as small-business startups with big ideas,” said DeVries. Obviously, many of these future giants can be founded by women.
One of the Startup Expo WSBO participants, BadVR (Bring All your Data Into VR), uses augmented and virtual reality (AR / VR) technology to empower people with the ability to—literally—step inside their data. Suzanne Borders is its CEO and co-founder. BadVR’s tech makes the discovery of valuable insights faster, easier, and more accessible to all. The company is located in Los Angeles, CA. It employs 20 engineers, designers, and dreamers, with diverse 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 Directorate of the Air Force Research Laboratory (AFRL) and the innovation arm of the Department Air Force.
Typically, seed capital from the venture capitalists comes at a high cost. Young companies usually have a low valuation and have to give up a significant stake in the company in exchange for equity investments. Grants provided at the earliest stage of a company enable founders to bring on venture capitalists later on when the company’s valuation is higher. BadVR raised a $350,000 pre-seed round in 2019 from angels, friends, and family. It is currently raising another small angel round.
“When a lot of people were uncertain about the future of the technology, we were still able to move quickly and maintain vision, direction, and control,” said Borders. “It also allowed us to be growing and hiring during a particularly turbulent period of the tech industry when COVID first hit.”
In addition to money, SBIR grants come with other benefits. “We’ve been blown away by the support offered by all the agencies that have funded us, including all the programs and guidance that have been offered,” said Borders. “The 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, either from a purchasing or investing perspective.
Being selected to participate in the Expo generated press coverage and industry cache for BadVR. Notably, “Many specific groups we were hoping to connect with—potential customers and investors—have already reached out to us since the event ended.”
How are you taking advantage of government resources to grow your business?