Guiding Kansas Innovators Through SBIR/STTR Success

Each year, federal departments and agencies reserve a portion of their R&D funds to award small businesses. Through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, America’s Seed Fund awards non-dilutive funding to develop your technology and chart a path toward commercialization.

What is the SBIR Program?

The Small Business Innovation Research (SBIR) program is a highly competitive program that encourages domestic small businesses to engage in Federal Research/Research and Development that has the potential for commercialization. Through a competitive award process, SBIR enables small businesses to explore their technological potential and provides the incentive to profit from commercialization. By including qualified small businesses in the nation's research and development (R&D) arena, high-tech innovation is stimulated, and the United States gains entrepreneurial spirit as it meets its specific R&D needs.

What is the STTR Program?

The Small Business Technology Transfer (STTR) program expands funding opportunities in the federal innovation arena. Central to the program is the expansion of the public/private sector partnership to include joint venture opportunities between small businesses and nonprofit research institutions. The unique feature of the STTR program is the requirement for the small business to formally collaborate with a research institution in Phase I and Phase II. STTR's most important role is to bridge the gap between performance of basic science and commercialization of resulting innovations.

Participating in America's Seed Fund happens in three phases:

Infographic: The three phases of SBIR/STTR are Proof of Concept, 6 to 12 months, $50,000 to $315,000; , Technology Development, 24 months, $650,000 to $2.1 million; and Commercialization, take your product to the commercial market or sell in the multi-billion dollar federal contracting marketplace.

SBIR Three Phases

The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed Federal Research /R&D efforts and to determine the quality of performance of the small business awardee organization prior to providing further Federal support in Phase II.  SBIR Phase I awards normally do not exceed $150,000 and have a six-month period of performance.

The objective of Phase II is to continue the Federal Research/R&D efforts initiated in Phase I. Funding is based on the results achieved in Phase I and the scientific and technical merit and commercial potential of the project proposed in Phase II.  Generally, only Phase I awardees are eligible for a Phase II award. SBIR Phase II awards normally do not exceed $1,000,000 and have a two-year period of performance.

The objective of Phase III, where appropriate, is for the small business to pursue commercialization objectives resulting from the Phase I and Phase II Federal Research/R&D activities. The SBIR program does not fund Phase III awards.  In some Federal agencies, Phase III may involve follow-on non-SBIR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government.

STTR Three Phases

The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed Federal Research/R&D efforts and to determine the quality of performance of the small businesses prior to providing further Federal support in Phase II. STTR Phase I awards normally do not exceed $150,000 total costs for 1 year.

The objective of Phase II is to continue the Federal Research/R&D efforts initiated in Phase I. Funding is based on the results achieved in Phase I and the scientific and technical merit and commercial potential of the Phase II project proposed. Only Phase I awardees are eligible for a Phase II award. STTR Phase II awards normally do not exceed $1,000,000 total costs for 2 years.

The objective of Phase III, where appropriate, is for the small business to pursue commercialization objectives resulting from the Phase I/II R/R&D activities. STTR does not fund Phase III awards. In some Federal agencies, Phase III may involve follow-on non-STTR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government.

Infographic supplying some information on SBIR and STTR funding. It states that 4 billion dollars in funds are invested each year, 4,000 is the average number of companies funded per year, and 0 percent equity or IP ownership is taken by the government.

What is the difference?

SBIR: Small Business Innovation Research

  • Allows but does not require the involvement of a non-profit research institution.
  • Principal investigator (PI) must have primary employment with the small business.
  • 11 federal agencies participate.

STTR: Small Business Technology Transfer

  • Requires partnering with a U.S. non-profit research institution or university.
  • Principal Investigator (PI) may be employed by either the small business or the research institution (except at NSF).
  • 6 federal agencies participate.
Participating Federal Agencies

SBIR:

STTR:

Are you Eligible?

You must meet the following requirements to be eligible for SBIR/STTR programs:

  • Does your business employ 500 or fewer employees?
  • Is your business located in the U.S.
  • Is your business at least 51% owned and operated by a U.S. citizen or permanent resident?
  • Is your business a for-profit entity or will you form a for-profit entity?
  • Is your principle investigator (main researcher) devoting at least 51% time to the business? (This is required for SBIR but not STTR).