Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards are federal grant programs for early stage innovative technology development. SBIR is a highly competitive program that encourages small business to explore their technological potential and provides the incentive to profit from its commercialization. By including qualified small businesses in the nation's R&D arena, high-tech innovation is stimulated and the United States gains entrepreneurial spirit as it meets its specific research and development needs.

SBIR awards are used by companies as initial start-up funding, or by existing companies to create new products and move into new markets. SBIR pays for the research and the findings are reported to the government; but the firm owns the idea and can use it for its own purposes.

Which federal agencies participate?

Eleven federal agencies independently and competitively award grants in categories of research supporting their strategic priorities:

  • Dept of Agriculture
  • Dept of Commerce
  • Dept of Defense
  • Dept of Education
  • Dept of Energy
  • Dept of Health & Human Services
  • Dept of Homeland Security
  • Dept of Transportation
  • Environmental Protection Agency
  • Nat’l Aeronautics & Space Admin.
  • National Science Foundation

Products and services developed through these programs profit the company and the country. Over 50% of both innovations and new jobs are created by small businesses. By supporting companies during the early, high-risk, stages of development, the government stimulates innovation and helps to build a strong economy.

Three-Phase Program

Following submission of proposals, agencies make SBIR awards based on small business qualification, degree of innovation, technical merit, and future market potential. Award recipients then begin a three-phase program:

  • Phase I is the start-up phase. Awards of up to $150,000 for approximately six months support exploration of the technical merit or feasibility of an idea or technology.
  • Phase II awards up to $1 million for as many as two years to expand Phase I results. During this time, research and development is performed and the developer evaluates commercialization potential. Only Phase I winners are considered for Phase II.
  • Phase III is the period during which Phase II innovation moves from the laboratory into the marketplace. No SBIR funds support this phase, but companies are eligible for contracts to implement the technology on a non-competitive basis. 


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This printout was brought to you by the Central New York Technology Development Organization.