Defense startups win SBIR Phase II then die waiting 2-3 years for a Phase III production contract

The SBIR program funds promising defense technology through Phase I ($150K proof of concept) and Phase II ($1M prototype), but Phase III -- the transition to production contracts -- has no dedicated funding. Startups must find a Program of Record willing to adopt their technology, which requires navigating a different contracting office, different requirements documents, and a new program manager who was not involved in Phase I/II. The average wait between Phase II completion and Phase III award is 2-3 years, during which the startup burns through venture capital with no revenue. This persists because SBIR is managed by the Office of the Secretary of Defense while production contracts are managed by individual service acquisition offices with no institutional connection to SBIR outcomes.