SBIR and STTR Awards

The federal government maintains STTR and SBIR programs for small businesses; the Small Business Administration acts as the coordinating agency for those programs.  Approximately 11 federal agencies participate in the SBIR program and five in the STTR program.

This program encourages small businesses to explore their technological potential and provides the incentive to profit from its commercialization.  SBIRs target entrepreneurial companies since that is where innovation resides.  The program helps to reduce the risk and expense of conducting serious R&D efforts in-house.  SBIR supports the startup and development stages and it encourages technology commercialization.

Small businesses must meet certain eligibility criteria to participate in the SBIR program.

SBIR awards are based on company qualification, innovation, technical merit, and future market potential.  Awardees begin a three-phase program.

• Phase I offers awards up to $100,000 for approximately 6 months, to explore the technical merit or feasibility of an idea or technology.  Successful Phase I awardees are asked to apply for Phase II awards.
• Phase II awards are up to $750,000 and 2 years, to Phase I results.  Additional R&D work is performed and the developer evaluates potential commercialization.
• Phase III represents the movement of the innovation into the marketplace.  There is no SBIR during this phase.

This program is similar to SBIR.  However, for both Phase I and Phase II STTR projects, at least 40% of the work must be performed by the small business, and at least 30% of the work must be performed by a non-profit research institution, e.g., universities.

Small businesses must meet certain eligibility criteria to participate in the STTR Program:

• American-owned and independently operated
• For-profit
• Principal investigator need not be employed by the business
• Company size limited to 500 employees
• Principal place of business located in the United States;

The phases of STTR parallel those of SBIR.  STTR web sites:

• Dept. of Defense
• Dept. of Energy
• NIH/DHHS
• NSF