It can be exciting to start a small business in the tech sector, but it can also be overwhelming to estimate how much you’ll have to spend to get your ideas off the ground.
If you’re looking for a bridge, grants don’t require a small business owner to pay them back or give up an equity stake in their company, unlike credit, loans, or venture capitalism. Grants can give you more leverage in your industry, so you can hit the ground running once you’re ready to debut your product.
The catch is that grants aren’t just competitive, the highly specific criteria can box many players out of the process. Here, we’ll look at both how these resources work and some programs that could be worth pursuing.
What are small business innovation grants and how do they work?
Innovation loans usually fund the research process, including experimentation and new technology, rather than your general operating costs. Here, we’ll look at how that breaks down.
What is a small business innovation research (SBIR) grant?
A small business innovation research (SBIR) grant is a federal-backed program that supports research and development. These grants can help a small business commercialize their products or protocols, whether it’s a new surgical device or a fintech application. These grants are usually awarded in three phases, starting with the earliest phase of research. So, even if you haven’t proved your idea is economically feasible, you have room to explore its worth in the first phase.
How business innovation grants work
Business innovation grants start with an application. While every grant works differently, you’re usually required to write a technical proposal or research plan. These highly competitive grants will set parameters for applicants, though the terms and conditions can range based on the grant. If you’re approved, you’ll need to submit progress reports or show certain milestones to continue onto the next phase.
Are innovation grants really “free money”?
Free money is an overstatement.
While grants do not require you to repay them, you’ll devote a good deal of time to securing and retaining them. From application to reporting to ongoing communications, it can feel unrealistic to carve out the manpower if you’re already time-strapped. Plus, if you’re not selected, you can end up devoting a lot of time to the application process alone.
This is just one reason why it’s important to not just read the general application rules, but to understand what kind of research, technology, and innovation is likely to be favored by the grant-giver.
Why innovation and technology grants exist
Innovation and technology grants are meant to encourage innovation and economic growth. Of course, you could argue that this is true for nearly all grants. To understand how they work, it helps to understand what it means to remove risk for early-stage research and emerging technologies.
The favored categories include AI, health, sustainability, and infrastructure, though there’s obviously plenty of crossover within the tech sector. It’s also important to recognize how terminology is used because not all grants have the same terms and conditions.
Small business technology grants vs. accelerators and challenges
Small businesses have a lot of help available to them, and not just in terms of funding. Some grants will provide straight cash, while others will offer perks like infrastructure or technical support. For example, offering a house for your team to live in for the first six months of the project. Or connecting you to an experienced tech mentor who can offer you advice at each stage of the way.
While all of these benefits can reduce your costs and expedite your go-to market date, it’s important to know what you’re applying for and how exactly you’ll use the resources. If you’re not clear on what you’re getting, you can easily squander an opportunity or partnership.
Top small business innovation grants to explore
Whether you’re interested in AI grants or innovation challenges, we’ll look at some reputable options, what they offer, and who they’re right for. Please note that all grants and programs are subject to change based on funding, application dates, legalities, and economic shifts.
NSF SBIR Phase I (AI topics)
The National Science Foundation (NSF) SBIR Phase I grant funds both AI hardware and deep-learning AI programs. The grant works under a larger fund that’s spread across businesses and industries. If you’re applying under the AI topics, appropriate categories include cognitive science, sustainability, computer-vision, language-based, and conversational technologies. The NSF supports early-stage feasibility and technical validation, and it’s best for startups with novel AI technology with strong commercial potential.
Sanofi iNext Pitching Competition
The Sanofi iNext Pitching Competition is a global initiative to support high-risk ideas within the pharmaceutical industry. Projects are eligible for up to $500,000 to support 18 months of research plus access to Sanofi’s research and development team. Sanofi also offers additional opportunities, such as External Innovation. This program is a flexible partnering model that can include research agreements or larger partnerships. This might be a good avenue if you’re in the digital health or biotech sector.
Amazon “Go Build 2026”
The Amazon Go Build 2026 is an accelerator opportunity, thanks to a partnership between Greentown Labs and Amazon. This program supports startups in mineralization and carbonation technologies. It offers collaboration opportunities with Amazon to discuss how your company can work with the conglomerate to fight climate change. This could be a good grant if you have an innovative idea to improve the sustainable building industry. Ideally, the technology can be integrated with modern concrete-production techniques to bring down emissions.
Google Founders Funds
The Google Founders Fund has provided $58 million to founders in an effort to improve generational wealth. In addition, the company offers hands-on support to help founders get their business off the ground. While this fund is technically open to all founders, tech companies may get more out of partnering with the juggernaut’s highly experienced team. However, given the low application bar, it may be more difficult to stand out in the applicant pool.
NVIDIA Inception Program
NVIDIA Inception is a startup program that can guide AI companies through the NVIDIA platform. With this program, you can not only discover new opportunities, you have access to the supportive technology that can help you grow your Artificial Intelligence. The Inception portal offers preferred pricing, free cloud credits from NVIDIA’s partners, and technical training for your team. The application criteria is fairly broad, but specifically excludes consulting, crypto, cloud-service providers, resellers, or public companies.
AWS Generative AI Accelerator
The AWS Gen AI Accelerator is an 8-week program that supports generative and agentic AI startups. The application process typically opens during the spring and closes in the fall. The accelerator offers tools, advice, and a community that founders can use to kickstart their ideas and prove what’s possible.The accelerator provides up to $1 million in AWS promotional credits to build and launch your startup.
What to do before applying for innovation or AI grants
The right program for you comes down to what type of support you need. Whether it’s straight cash or a trusted partner, doing the research can make a world of difference. Before you apply, here are our tips to prep:
- Understand requirements: Before you prove your company, you need to have a solid understanding of what each team is looking for. For example, if the application asks for evidence of traction, you’ll need to clarify what that means. Consider reviewing past winners for ideas for your own application.
- Business structure: Whether you’re a C-corp, LLC, or sole proprietorship, you’ll need to have all of your documentation in order before you apply.
- IP or core technology: Your tech must be unique, documented, and have strong potential in its intended industry. Provide a clear summary and research plan to boost your chances of approval.
Tips for innovation grant applications
As you move through each step of the application, consider the following:
- Specificity: Clearly state the problem and how your innovative tech will solve it. Consider that you need to stand out in a crowd, so make your words as memorable and impactful as possible.
- Alignment: Whether the goal is to bring down carbon emissions or extend the average lifespan, make sure that your application speaks directly to the grant’s stated purpose.
- Patience: It takes time to research, apply, and wait for a decision. The more you commit to the process, the more likely you are to be approved.
Conclusion
Small business innovation grants can support your early-stage tech or AI development, but it’s important to set realistic expectations. This crowded field may be rife with opportunity, but it’s also easy to get drowned out by your competitors.
To strengthen your odds, it helps to develop an approach to finding, applying, and waiting for these grants. Remember that preparation and persistence can be the key to avoiding high interest rates and can lead to the kinds of partnership that sustain your career.