What is SBIR/STTR
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are unique opportunities for small businesses to receive federal research and development (R/R&D) dollars to move their innovation from idea to commercial market. The mission of the programs is to support scientific excellence and technological innovation through the investment of Federal research funds in critical American priorities to build a strong national economy, through three phases of investment.
Phase I tests the technical merit, feasibility, and commercial potential of the proposed effort.
Phase II further develops the Phase I effort and generally leads to a “market-ready” prototype.
Phase III is the market approach and commercialization of the developed innovation and is generally (put in because of limited Phase III awards) not directly funded by governmental agencies, though indirect funding might be available through companion or “follow-on” efforts.
Annually, these programs provide more than $2.5 billion in investment dollars into small businesses across the country, in a wide variety of thematic research areas and scientific disciplines. In total, 11 federal agencies participate in the SBIR program, and 5 of those agencies participate in the STTR program, funding innovations from areas such as health technologies, critical defense and force protection, border and port security, space exploration, food and agriculture, and even environmental monitoring and resource reclamation. No matter what area of scientific discovery you are working in, there is probably an SBIR/STTR opportunity for your business.
To participate, at a minimum, businesses must meet the SBA definition for “small”, must be for-profit, and must be majority owned by U.S. citizens or other U.S. based businesses. Eligibility requirements for the programs can be found here.
How does it help businesses?
The SBIR/STTR programs are often referred to as America’s seed fund. These programs provide non-dilutive, non-equity bearing funds to small businesses to help develop their innovative idea. This can provide small businesses with the capital they need to bring a product to market and grow, hire more staff, expand operations, or add to the breadth/depth of their product lines, while retaining all rights to the innovation.
To date, the SBIR/STTR programs have provided over $47 Billion to American small businesses.
Unlike traditional lending or capital models, SBIR/STTR funding allow you to move further along the innovation pipeline without relinquishing part of your idea, part of your business, or securing risky loans. Because the programs are setup for idea development and technical feasibility, they provide early seed stage funding to validate models, test approaches, and verify workflows and processes.
While SBIR/STTR funding typically will not fully launch a product, it provides a base level of funding for exploratory research and product development.