SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) are U.S. federal grant programs that fund early-stage R&D and commercialization of technology in small businesses. Both are ; recipients keep 100% of their company. STTR differs from SBIR mainly in requiring a formal partnership with a university or federal research lab. Together they award roughly $4 billion per year across 11 participating federal agencies.
Eleven agencies (NIH, NSF, DoD with each branch separate, DOE, NASA, USDA, Department of Education, Department of Commerce, EPA, HHS, and DoT) run their own solicitations on their own timelines. Each agency posts topics matching its mission. A small business writes a proposal, submits to a specific topic on a specific deadline, and is reviewed by subject-matter experts. The structure is three phases:
Phase I. Proof of concept. Up to about $314K, period of performance 6–12 months.
Phase II. R&D and prototyping. Up to about $2.15M, period of performance 24 months.
Phase III. Private-sector commercialization. No SBIR/STTR cash, but Phase III contracts can be sole-source awards from the originating agency, which is the real value.
The applicant must be a U.S.-based small business (under 500 employees), with majority U.S. citizen ownership and the principal investigator employed by the company. STTR additionally requires a research-institution partner doing at least 30% of the work. There's no requirement to have a product, revenue, or any prior funding. Many SBIR awards go to single-founder companies pre-incorporation.
The programs lost their statutory authority on September 30, 2025, then got reauthorized through FY2031 in April 2026 under the Small Business Innovation and Economic Security Act. Solicitations are open again, but agency-level timelines are still catching up. Verify current openings at sbir.gov on the day you plan to apply, since deadlines, topics, and budgets are still being normalized agency-by-agency.
Time. Phase I proposals are typically 15–25 pages of dense technical writing with strict formatting and a defined scope. Even strong applicants spend 60–100 hours per proposal; success rates by agency range from about 10% (NIH, NSF in popular topics) to about 25% (specialized DoD topics). Once awarded, federal grant compliance (financial reporting, audits, allowable-cost rules, indirect-rate negotiations) adds ongoing overhead. Budget at least one full-time equivalent of program-management time during a Phase II.