By Josh Bar-on, SBIR Advisor at Akela Consulting
At Akela Consulting, we specialize in helping deep-tech and dual-use startups secure non-dilutive funding from the U.S. federal government. In this guide, we’ll break down the U.S. Air Force’s Small Business Innovation Research (SBIR) program, particularly AFWERX, and show how it can be your gateway to defense contracting.
What is the SBIR Program and How Does It Work?
The SBIR program funds U.S. startups annually close to $4 billion across virtually every industry sector. The Department of Defense (DoD) has the largest SBIR budget among federal agencies, providing a unique opportunity for dual-use technologies to break into the defense market. The SBIR program is a critical source of non-dilutive capital, helping businesses advance technology solutions with both commercial and military applications.
AFWERX: The U.S. Air Force’s Innovation Gateway
AFWERX is the U.S. Air Force’s innovation hub, designed to engage small businesses and startups through the SBIR program. AFWERX calls their SBIR efforts, AF Ventures. The initiative connects commercial innovation with military needs, fostering collaboration that benefits both startups and the Air Force.
Why Does the U.S. Air Force Run SBIR Programs?
The Air Force needs cutting-edge technology to maintain its competitive edge, and the SBIR program allows it to tap into the innovation happening in startups. This opens the door for small businesses to secure lucrative contracts and for the Air Force to access rapid technological solutions.
Understanding AFWERX SBIR Phases: A Breakdown
The SBIR program has three key phases, each providing different levels of funding as your project progresses:
Phase I: This initial phase funds feasibility studies, offering up to $75,000 (SBIR) or $110,000 (STTR) to test your technology concept.
Phase II: Companies that succeed in Phase I can receive up to $1.25M (SBIR) or $1.8M (STTR) to continue developing and testing their solutions. To move forward, you’ll need a Memorandum of Understanding (MoU) from a potential Air Force customer showing interest in your solution.
STRATFI/TACFI: After Phase II, high-potential technologies can apply for either the Tactical Funding Increase (TACFI) or Strategic Funding Increase (STRATFI) programs. These offer $375,000 to $15 million to scale up solutions, ensuring continued development and possible widespread adoption within the Air Force.
Phase III: The final phase is commercialization, where companies secure contracts without competitive bidding if their technology proves viable for Air Force needs.
Open Topic vs. Specific Topic: Two Paths to Air Force SBIR Funding
Open Topic: The front door for commercial innovation. Startups can submit existing technologies and pitch how their solution could benefit the Air Force. This offers broad opportunities to enter Phase I, Phase II, or Direct to Phase II (D2P2).
Specific Topic: Focuses on solving clearly defined problems set by an Air Force end-user. Companies that apply here work directly with the end-user to address specific capability gaps.
The Importance of the MoU for AFWERX Phase II Funding
To secure Phase II funding, you must obtain a signed Memorandum of Understanding (MoU) from an Air Force customer. This document demonstrates that the customer is interested in your technology once it’s fully developed, which can significantly improve your chances of moving into Phase III or landing a sole-source contract. Although this step can be challenging, it’s a crucial milestone for startups aiming to commercialize their solutions.
AFWERX Funding Metrics: A Look at 2024’s Success So Far
Let’s look at AFWERX’s funding metrics from this year alone from 24.1 and 24.2:
158 companies selected
$583M in SBIR funds
$703M in matching government funds
$620M in matching private funds
Upcoming AFWERX SBIR 2024 Programs and Key Dates
Space-Only Specific Topic Solicitation (DoD SBIR/STTR 24.3/C)
Pre-release: August 21, 2024
Open Date: September 18, 2024
Close Date: October 16, 2024, at 12 PM ET
2. Air Force-Only Specific Topic Solicitation (DoD SBIR/STTR 24.4/D)
Pre-release: September 4, 2024
Open Date: October 2, 2024
Close Date: November 6, 2024, at 12 PM ET
3. Air Force AFX24.7 (SBIR) and AFX24.E (STTR) Phase I Open Topic
Open Date: September 11, 2024
Close Date: October 10, 2024, at 12 PM ET
4. Program Year 2025 (PY25.1) STRATFI
Only for recent AFWERX winners
Submission window extended to close on Wednesday, October 2, 2024, at noon ET.
How Akela Consulting Can Help You Navigate AFWERX SBIRs
Navigating the SBIR process can feel complicated, but it doesn’t have to be. At Akela Consulting, we help clients avoid common mistakes, streamline the application process, and improve their chances of winning. Even if you don’t succeed on your first try, remember that the SBIR program offers multiple cycles across various agencies, funding nearly $4 billion in innovation annually.
