With the continued rise in commercial interest and private-public collaboration in the space industry, small businesses are playing a vital role in advancing space logistics and related fields. We sat down with Jason L. Kessler, NASA’s Small Business Innovation Research/Small Business Technology Transfer (SBIR/STTR) Program Executive, at the recent Space Logistics Conference where he shared insights on the increasing engagement of small businesses in space technology development, stating that “small businesses are a critical component of the expanding space economy.”
NASA’s SBIR/STTR Programs
NASA’s SBIR/STTR programs are designed to address the agency’s specific technological needs, but they also foster innovation in the broader space logistics sector, including In-Space Assembly and Manufacturing (ISAM) and Active Debris Remediation (ADR). Kessler emphasized that NASA is particularly interested in advancing subsystem and component-level technologies that can integrate into larger systems. “What we’re seeing is this burgeoning opportunity where subsystems and components come together at a system level, and there’s interest from the financial community, whether that’s angel investors or venture capital,” he explained. The programs have become a gateway for small firms to develop and commercialize key technologies, with the recent shift in launch costs and market dynamics creating a “playground” for small businesses to thrive, according to Kessler.
The NASA SBIR program offers around $200 million in funding annually across various technology areas. The program is highly selective; out of the thousands of proposals NASA receives, only about 300 make it to Phase I, and a smaller number progress to Phase II and beyond. Furthermore, SBIR is part of a larger ecosystem, with 11 SBIR programs across different government agencies, each offering non-dilutive seed investments, as Kessler explained.
For Phase I, NASA provides $150,000 for feasibility studies over 6-13 months, depending on whether there is a partnership with a research institution. “At this stage, firms are paired with a technical monitor to guide the project and align it with NASA’s goals,” Kessler noted. Phase II contracts can be up to $850,000 for projects lasting up to 24 months, where the focus shifts to prototyping and advancing technology readiness levels (TRL) up to TRL 5. “We’re even seeing examples of firms partnering with other SBIR awardees to address different components of a larger mission,” he added. NASA offers several post-Phase II mechanisms, some of which require matching funds. This allows companies to leverage venture capital on a dollar-for-dollar basis, which can accelerate development, particularly in the ADR and ISAM areas.
Navigating Funding and Commercial Markets
As the space tech industry rapidly evolves, the overlap between government funding and private sector investment is creating more opportunities for small businesses to thrive. “What’s exciting is the convergence of government funding with venture capital interest,” Kessler said, noting that the combination of investment sources allows companies to address both short-term market needs and long-term ambitions.
Starfish Space is a great example of this. The Washington-based company is developing satellite servicing capabilities and recently secured a Phase III SBIR contract for the first commercial debris inspection mission funded by NASA. “Their business plan is to provide space logistics for satellites, whether it’s refueling, changing orbits, or deorbiting,” Kessler explained. Starfish Space has attracted private sector interest alongside NASA support, underscoring how companies can benefit from this dual-funding approach.
In addition to the main SBIR/STTR solicitation, NASA also offers Ignite, a solicitation focused on dual-use technologies, which attracts companies that seek customers beyond NASA. “Ignite allows us to attract firms that are further along in development and have commercial potential beyond NASA,” Kessler said, adding that the program has seen greater interest in matching funds for Post-Phase II contract from the venture finance.
Kessler actively encourages companies to look beyond its programs, too. “Other agencies like the Air Force Research Lab and Space Force have substantial budgets and overlapping interests with ours,” he mentioned. Furthermore, small businesses can connect with subject matter experts across NASA’s centers, offering valuable guidance and insights on navigating the agency’s technical needs.
Strategic Alignment and the Importance of Focus
While NASA provides non-dilutive funding, Kessler warned that companies should carefully evaluate their participation to ensure it makes sense for their long-term business goals. “I worry that sometimes firms see government funding as non-dilutive cash but end up being pulled away from their commercial market,” Kessler cautioned. He stressed the importance of understanding NASA’s technology needs and aligning the company’s core commercial objectives.
Kessler advised entrepreneurs to thoroughly review NASA’s solicitation requirements and evaluation criteria before submitting a proposal. The proposal process can be lengthy and resource-intensive, with Phase I applications requiring technical proposals up to 19 pages. “It’s heartbreaking when firms pour time and effort into a proposal that ultimately doesn’t align with NASA’s specific priorities,” he said. Companies can avoid missteps and enhance their chances of success by fully understanding the evaluation criteria and ensuring their solutions directly address NASA’s stated needs.
Kessler’s key advice to entrepreneurs is simple but crucial: take the time to ensure your technology is a strategic fit, and don’t underestimate the importance of preparing a focused, well-aligned proposal.
A Call for Collaboration: Addressing NASA’s Technology Shortfalls
Kessler highlighted NASA’s ongoing effort to prioritize technology needs across its mission areas, underscoring a new openness to external collaboration. The Space Technology Mission Directorate recently engaged a wide range of stakeholders from NASA’s science and exploration mission directorates to commercial firms to academia which resulted in feedback on the 187 identified technology shortfalls relevant to the entire aerospace sector. “The agency’s really open for engagement,” Kessler emphasized, pointing out that this marks a significant shift in NASA’s approach. “I haven’t always seen the agency act in that manner, so I think it’s a particularly special time for those outside of the agency to think about being a collaborator or sharing in the effort.”
Kessler encouraged entrepreneurs and space tech innovators to review these shortfalls as potential areas where they could make impactful contributions. “There are going to be space logistics-related technologies identified there,” he noted, suggesting that interested parties look beyond the specific SBIR/STTR subtopics to find other areas of alignment. By addressing these identified needs, companies have the chance to influence where NASA directs its limited resources, allowing them to play a key role in shaping the agency’s focus.
In addition, Kessler spoke about the broader ecosystem of government and commercial partnerships that is now part of NASA’s strategy. He cited the Space Force as an example of how other government entities are investing in complementary areas, creating a cross-pollination effect that benefits the entire space sector. “There’s real outside money on the table for consideration,” he said, acknowledging that while investment in space has recently declined due to macroeconomic factors, the opportunities for public-private partnerships remain strong.
Opportunities Ahead for Space Tech Entrepreneurs
For space tech entrepreneurs, Kessler’s message is clear: while NASA’s funding can provide a significant boost, success comes from aligning technology development with both commercial markets and government needs. “It’s an incredibly exciting time for small businesses to be able to meaningfully contribute because there’s a lot of funding opportunity and a tremendous amount of need,” he emphasized.
With the support of NASA’s SBIR/STTR programs, as well as broader interest from venture capital and other government agencies, small businesses have more opportunities than ever to drive innovation in space logistics and beyond.
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