Higgler:
Planedr has an interesting idea for you, and I wanted to give just a little bit more info.
He suggests having a DER approve the data with an FAA Form 8110-3, rather than go for an STC or an FAA Form 337 approval.
As long as you keep in mind the differences between an 8110-3 approval and an STC, you may find his suggestion to just seek DER approval of your data may be the way to go. It is important to remember that a DER may approve engineering data, but may not approve installations.
To install a product (that causes a change to the original type certificated configuration) on an aircraft that is certificated with a standard airworthiness certificate (as opposed to a special airworthiness certificate, which includes experimental), there is typically a two step process. First, is approval of the engineering data to make the configuration change. Second is approval of the installation.
Lets consider each step individually. Keep in mind that I may not be recording all the various nuances of the process, and others more experienced than I may chime in here. Also, although I worked in general aviation years ago, now I work almost exclusively with Part 25 aircraft in the transport catagory, so I don't know (or remember) all the possible approval paths that may exist in other catagories.
Engineering data approval. May be accomplished by an FAA engineer (normally from the Aircraft Certification Office, ACO) or by an appropriately rated DER (who stands in place of the FAA for the purpose of data approval). This approval will be documented on an FAA Form 8110-3 (I am ignoring the DAS process for now, as I am assuming you and your friend are not a DAS nor associated with one). Once the data is approved, then the installation may take place. What planedr is suggesting is that you go this far and stop, if I understand correctly.
Installation approval. May be accomplished by an FAA inspector (normally from the Maintenance and Inspection District Office, MIDO) or by an appropriately rated DAR or DMIR. This approval will be documented on an FAA Form 8130-9. Once the installation is approved, the aircraft may be returned to service.
Keep in mind that if you sell the customer a DER approved data package, the customer must bear all the costs and logistics of finding an appropriately rated installer, making the findings of compliance with the prototype installation, performing the testing and analysis necessary to substantiate the installation, performing required ground/flight testing as needed, etc. This will have to occur for every single aircraft into which your DER approval data package is installed.
If you sell the customer the right to install an STC, then for the aircraft type covered by that STC, all the customer needs to do is find an appropriately rated installer who will install the STC kit in accordance with the STC data, and perform any operational testing (usually significantly less detailed than the ground/flight testing required for the issuance of the STC, because the really rough and costly stuff (making the findings of compliance with the prototype installation, performing the testing and analysis necessary to substantiate the installation, performing required ground/flight testing as needed, etc) has already been accomplished to obtain the STC.
Consequently, you must consider your target market. If your target market will be fleets of similar aircraft in the transport/commuter catagories of the standard certificate, you may want to bear the cost upfront of one STC package for each fleet type you believe you can sell to profitably. Those types of fleet operators will almost always prefer a product that already has an STC.
If you will market to a mixed bag of aircraft (such as general aviation and some levels of business aviation), usually each one owned by a different customer, rarely have similar types, etc...then get a DER approval of your engineering data as planedr said.
Sorry to provide a long and probably boring breakdown, but from what you describe (that your intended market is general aviation rather than commercial fleets of transports or commuters), you are probably much better off to consider seriously the suggestion by planedr to just get DER approval of your data. If I am wrong though, I hope you can use the information above to more clearly define your options.
debodine