4 US government funding sources for your next invention 

Of all the funding sources available to hardware founders, government grants may not be the typical first choice, as they can take a long time to come though. However, for companies whose inventions align with federal agencies and programs, the money exists and will go out to the business leaders who persist through the application process and qualify. While it might not be obvious initially, given the number of initiatives in defense, energy, and healthcare, your invention may be just what an agency is waiting for.

The following are four key sources of US government funding for your invention:

1. Small Business Innovation Research Program (SBIR)

The SBIR encourages small companies to research and develop products and technologies that support the objectives of multiple federal departments, some of which include:

• Department of Agriculture (USDA)
• Department of Defense (DoD)
• Department of Homeland Security (DHS)
• Department of Transportation (DOT)
• Environmental Protection Agency (EPA)

The SBIR directs itself toward US-based, for-profit companies under 500 employees in size. Companies must have an R&D focus and not be repackaging older technology. And as for other funding sources, candidate companies can work with venture capital companies (VCs), but no single VC can own more than a 50% share. 

SBIR can offer $50K to $250K of assistance in Phase One (concept development), then $500K to $1.5M in Phase Two (prototype development). The SBIR doesn’t assist in Phase Three or commercialization. Some examples of tech potentially supported by current SBIR grants include:

• Augmented and virtual reality systems
• Instrumentation and hardware systems
• Mobility systems
• Electronic control units in autonomous vehicles
• Wearable tech to monitor the real-time health of military personnel

To determine if SBIR funds are a viable source of your product, check out the Federal and State Technology partnership program (FAST), which helps fund SBIR applicants’ mentoring and training.

2. Defense Advanced Research Projects Agency (DARPA)

DARPA’s goal is to support the development of groundbreaking defense technology over minor advances. 

DARPA works with academic institutions as well as US-based businesses of all sizes. It’s important to note that DARPA uses SBIR funding for some of its initiatives, but not all of them. So an inquiry through the SBIR alone only covers some DARPA sources. 

DARPA’s fiscal year 2022 budget was $3.86 billion, with a large percentage devoted to research. For fiscal year 2024, President Biden has requested $4.11 billion. Specific award sizes vary widely between the DARPA grants sought.

As for examples of technology funded by DARPA, one needn’t look far. Not only have DARPA grants financed projects like the F-117A stealth fighter, but they also made possible inventions like GPS, voice recognition technology used in Siri and Alexa, and last but not least, the Internet itself. In terms of current funding opportunities, some examples of technologies DARPA currently supports are:

• Microbial sense and response devices for environmental monitoring
• Hardware supporting quantum communication
• High-operational temperature sensors

To explore DARPA’s funding sources, start with the DARPA Small Business Program Office (SBPO). They provide education and direction into the agencies and procedures essential to applying for and winning grants. 

3. Advanced Research Projects Agency for Energy (ARPA-E)

ARPA-E is a program that seeks to advance high-potential, high-impact energy technology for the private sector. Their goal is to aid the development of new ways to generate, store, and use energy. 

ARPA-E focuses solely on US-based companies or US affiliates of foreign-based firms. For qualified applicants, the process involves finding and answering Funding Opportunity Announcements (FOAs) that the program publishes. Unsolicited funding requests aren’t accepted.

Although the agency doesn’t publish specific funding ranges, they’ve achieved the following milestones:

• $3.48 billion in funding delivered since 2009
• $1.4 billion in follow-on private sector funding generated from 204 projects
• 27 exits with a total valuation of over $21.8 billion from mergers, acquisitions, and IPOs
• 1000+ patents issued

The program’s successes center around a variety of energy-based topics. Some current opportunities in the hardware space include calls for:

• Sensing technology to detect undersea carbon
• Wireless technologies to aid the operation and protection of power lines

The program maintains a list of active FOAs on its site, and to start the process, applicants must submit a concept paper detailing their invention before submitting a full funding application.  

4. National Institutes of Health (NIH)

NIH has supported many of the most critical health and medicine discoveries and shaped the American medical system. Their mission is to “enhance health, extend healthy lives, and reduce the burden of illness and disability.”

Although the NIH is known for supporting institutional research, it does offer programs to support for-profit organizations, including over $1.3 billion in funding for small businesses. Specific grant eligibility varies from program to program; many are provided through the SBIR.

Some of the latest NIH-funded research involving hardware have included:

• Wearable devices to monitor biomarkers in cancer patients to improve diagnosis, treatment, and follow-up
• Wearable devices to monitor circulating nutrients and hormones within the body
• An implantable device to monitor and treat heart disease
• Ingestible capsules to study the relationship between the gut and the brain
• Technology that allows sensors to be drawn on the skin with an ink pen

To get started with NIH funding, visit their Grant Process Overview page.

Government funding: It’s worth investigating

Given the US government’s drive to stay ahead of defense threats, pandemics, and climate change, they’re willing to support the right inventions. Therefore, founders shouldn’t dismiss federal grants as a viable source of capital. 

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