SBIR and STTR

What are the SBIR and STTR programs?

The Small Business Technology Transfer (STTR) and the Small Business Innovation Research (SBIR) are governmental programs that require eligible governmental agencies to set aside a percentage of their budget for small businesses with a strong potential for technology commercialization to engage in R&D. Federal agencies with extramural research budgets over $100 million are required to set-aside a certain percentage of their budget to SBIR, and those with research budgets over $1 billion are required to set aside a portion of these funds for STTR.

Both the SBIR and STTR programs are divided into three phases:

 

Phase I: Feasibility and Proof of Concept

The objective of this phase is to establish the technical merit, feasibility, and commercial potential of the proposed R/R&D/ Phase I awards normally do not exceed $150,000 total costs for 6 months (SBIR) or 1 year (STTR).

 

Phase II: Research/Research and Development

The objective of this phase is to continue the R/R&D efforts initiated in the previous phase based on its results. Only Phase I awardees are eligible for a Phase II award. SBIR/STTR Phase II awards normally do not exceed $1,000,000 total costs for 2 years.

 

Phase III: Commercialization

The objective of this phase is for the small business to pursue commercialization objectives resulting from the Phase I/II R/R&D activities. (Some agencies such as the NIH SBIR/STTR programs do not fund Phase III).

SBIR and STTR Critical Differences

Principal Investigator (PI)

SBIR: PI must be primarily employed (more than half of the PI’s time) with the small business at the time of award and for the duration of the project period (unless a waiver is granted).

STTR: PI may be primarily employed by either the small business concern or the collaborating non-profit research institution at the time of award and for the duration of the project period.

 

Non-Profit Research Partner

SBIR:  Research partnerships are permitted and encouraged between small businesses and non-profit research institutions. The research institution can complete up to 33 percent of the total effort for a Phase I, and up to 50 percent of the total effort for Phase II.

STTR: Small businesses must formally collaborate with a non-profit research institution. The small business must perform at least 40 percent of the work and the research institution must perform at least 30 percent. The remaining 30 percent may be with the small business concern, the collaborating non-profit research institution, or additional third party/parties.

 

Small Business Eligibility Criteria

Only United States small business concerns are eligible to submit applications SBIR and STTR solicitations. See the SBA’s Eligibility Guide for more detailed information.

A small business concern is one that meets all of the below criteria:

  1. Is organized for profit, with a place of business located in the United States, which operates primarily within the United States or which makes a significant contribution to the United States economy through payment of taxes or use of American products, materials or labor;
  2. Is in the legal form of an individual proprietorship, partnership, limited liability company, corporation, joint venture, association, trust or cooperative, except that where the form is a joint venture, there must be less than 50 percent participation by foreign business entities in the joint venture;
  3. (i) SBIR and STTR. Be a concern which is more than 50% directly owned and controlled by one or more individuals (who are citizens or permanent resident aliens of the United States), other business concerns (each of which is more than 50% directly owned and controlled by individuals who are citizens or permanent resident aliens of the United States), or any combination of these; OR(ii) SBIR-only. Be a concern which is more than 50% owned by multiple venture capital operating companies, hedge funds, private equity firms, or any combination of these. No single venture capital operating company, hedge fund, or private equity firm may own more than 50% of the concern; OR

    (iii) SBIR and STTR. Be a joint venture in which each entity to the joint venture must meet the requirements set forth in paragraph 3 (i) or 3 (ii) of this section. A joint venture that includes one or more concerns that meet the requirements of paragraph (ii) of this section must comply with § 121.705(b) concerning registration and proposal requirements.

  • Has, including its affiliates, not more than 500 employees.