A Guide to the SBIR and STTR Programs

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are two programs powered by the U.S. Small Business Administration (SBA). SBIR and STTR are designed to engage in federal research and development, in part by creating partnerships between small business government contractors and nonprofit research groups.

This guide will explain how the SBIR and STTR work, the differences between SBIR and STTR, and what your small business can do to leverage these two government contracting programs.

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The SBIR / STTR programs were created by the SBA to help stimulate technological innovation, and for the government, to meet Federal research and development needs. These programs foster and encourage participation in innovation and entrepreneurship by women and socially or economically disadvantaged persons. Additionally, SBIR and STTR can help increase private-sector commercialization of innovations that come from U.S. federal government research and development funding.

The SBIR and STTR Extension Act was introduced on September 20, 2022, and became law on September 30, 2022 (the same day the SBIR/STTR program was set to expire). The SBIR and STTR programs were extended through September 30, 2025 via this act.

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The SBIR and STTR programs have the same general goal and share many commonalities, and both are available to small businesses based in the United States that meet all eligibility requirements. But there are a few differences between these two small business programs.

What is SBIR?

SBIR stands for Small Business Innovation Research. The program was established under the Small Business Innovation Development Act of 1982.

SBIR has been a lucrative program for small businesses who are aiming to perform research-based activities for the federal government. Through FY 2019, over 179,000 awards have been made totaling more than $54.3 billion.

What is STTR?

STTR, or Small Business Technology Transfer, was established as a pilot program by the Small Business Technology Transfer Act of 1992 and was modeled after the SBIR program.

One element that is unique to STTR is that one of its goals is to foster technology transfer through cooperative R&D between small businesses and research institutions. As of 2023, there were also more federal agencies participating in SBIR than in STTR.

Difference between SBIR and STTR

According to the SBA, there are three important differences between SBIR and STTR:

1. In the STTR program, the small business awardee and its partnering institution are required to establish an intellectual property agreement detailing the allocation of intellectual property rights and rights to carry out follow-on research, development or commercialization activities.
2. STTR requires that the small business performs at least 40% of the R&D and a single partnering research institution perform at least 30% of the R&D.
3. The STTR program allows the Principal Investigator to be primarily employed by the partnering research institution.

If you are interested in winning funding through SBIR or STTR, you need to make sure that your business meets the eligibility criteria for these programs.

As both SBIR and STTR are programs developed by the U.S. federal government, only U.S. small businesses are eligible to participate. Additionally, eligible businesses must be:

1. Organized for profit and with a place of business in the U.S.
2. Owned and controlled at least 50% by one or more individuals who are citizens or permanent resident aliens of the U.S, or by other small business concerns meeting this criteria.
3. Made up of no more than 500 employees (including affiliates).

The SBIR and STTR programs are established in three unique phases. The agencies participating must follow a uniform competitive process of the following three phases, with grant funding amounts fitting into the approved range, unless there is an exception.

• Phase 1: Concept Development. This stage lasts for six months to a year and can offer grant funding from $50,000 to $295,000. Any larger award requires a waiver from the SBA.
• Phase 2: Prototype Development. In this stage, around 24 months, the grant award funding amounts can run from $500,000 to approximately $1.9M. As in Phase 1, any award above these levels must be approved by an SBA waiver.
• Phase 3: Commercialization. Funding at this stage comes via Non-SBIR or Non-STTR dollars.

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Now that you have the basics of what SBIR and STTR are, the differences between the two and the ways that your business can become eligible, you are ready to take the next step and capitalize on these grant opportunities to increase your small business’s revenue.

Tools like GovWin IQ can help you identify where SBIR and STTR grant funding is coming from through its unique Federal Spending Analytics platform, along with other key agency and grant information. GovWin IQ is the industry-leading platform for government contractors that helps small businesses find early-stage opportunities, deep planning intelligence, potential teaming partnerships, and strategic insight to get ahead of the competition.

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