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Starting a Business

Uncle Sam Wants You

Funding from the Small Business Innovation Research program

This story appears in the April 2000 issue of Startups. Subscribe »

Searching for free money to launch the business of your dreams? You may not find it, but one government program comes close. Each year, the Small Business Innovation Research (SBIR) program awards $1.1 billion in funding to small businesses on the cutting edge of technology.

The main prerequisite for these funds is having an invention desired by one of 11 participating government agencies. The SBIR program pays you to develop that technology, and you're free to eventually sell the product commercially. For Matthew Schor, 37, president of Eagle Eye Technologies Inc., the SBIR program provided badly needed seed money. The Herndon, Virginia, company created a satellite tracking system that can pinpoint the geographic location of a person or object anywhere in the world.

After submitting a detailed proposal to the Defense Advanced Research Projects Agency (DARPA), part of the Department of Defense (DOD), Schor received a Phase I grant of $100,000 in July 1994 to test his theories for six months and a Phase II grant in November 1995 to develop the technology. Since then, he's received two SBIR grants from the Air Force: $100,000 in 1998 and $750,000 in 1999.

SBIR awards are open to small businesses that have 500 or fewer employees and are at least 51 percent U.S.-owned. There are regular SBIR conferences where you can speak with SBIR descision-makers and other recipients. For upcoming conference information and SBIR solicitations, visit the DOD Web site ( or the DARPA SBIR home page (, which links you to all other SBIR home sites.

Julie Bawden Davis specializes in small-business issues.