About SBIR/STTR

The following information applies to both the SBIR and STTR Programs.

Over $2 billion and only for small businesses! Congress has mandated that almost 3 percent, $2.2 billion in 2007, of all the extramural R&D funding each year be designated for small businesses through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs. SBIR/STTR is competitively awarded, set-aside program for entrepreneurs and small businesses to engage in federal research and development. The research must have the potential for commercialization. The program encourages entrepreneurs and small businesses to explore their technological potential and provides the incentive to profit from its commercialization. To qualify as a small business for the program, businesses must be: 
     American-owned and independently operated 
     For-profit 
     Principal researcher must be employed by business (this requirement is for SBIR only), and   
     500 employees or less (No size limit for nonprofit research institution)

Here’s how it works! Each year, 11 federal departments and agencies are required by SBIR/STTR to reserve a portion of their R&D funds for award to small businesses. Over $2 billion was awarded through the program in 2007 and virtually all scientific disciplines are represented in the various Agency Topic Areas of the departments and agencies.
These agencies designate R&D topics and accept proposals at various times throughout the year. Agencies are increasingly developing their own rules & regulations. Funding ceilings, R&D topic areas, and length of performance can vary widely for each participating agency.

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. Small businesses that receive awards or grants then begin a three-phase program. 

Phase I is the startup phase in which the small business works to improve the feasibility/proff of concept.  Awards of up to $100,000, for approximately six to nine months, support exploration of the technical merit or feasibility of an idea or technology.

Phase II awards average from $500,000 to $750,000, but can go over $1 million with some agencies. This phase may last up to two years and has a focus of expanding Phase I results. During this time, R&D work is performed, the developer evaluates commercialization potential, and prototype development and field testing is conducted. Only Phase I award winners can be 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. The small business must find funding in the private sector or through other non-SBIR federal funding. Highly successful small businesses are eligible to receive sole-source funding from the government during Phase III.

STTR Differences

STTR can be viewed as a sibling program to SBIR. There are two primary differences between SBIR and STTR. The first difference is that while partnering with, and participation by, a nonprofit research institution is encouraged in the SBIR program, it is required in the STTR program. The second major difference is that the principal researcher does not have to be primarily employed by the small-business concern, as is the case with SBIR. STTR allows the principal researcher to be primarily employed by the nonprofit research institution partner, or, in some cases, by another small-business concern.

STTR Qualifications: Small businesses must meet certain eligibility criteria to participate in the STTR Program. 
     American-owned and independently operated 
     For-profit 
     Principal researcher need not be employed by small business 
     500 employees or less (No size limit for nonprofit research institution)

The nonprofit research institution must also meet certain eligibility criteria. 
     Located in the United States 
     Meet one of three definitions 
        • Nonprofit college or university 
        • Domestic nonprofit research organization 
        • Federally funded R&D center (FFRDC)

Help for Small Businesses

State Grant! Assistance in preparing and developing federal R&D grant proposals - with potential for commercialization - is available to Idahoans statewide through the Idaho Grant Proposal Incentive (GPI) Fund. A small grant, up to $3,000, is available to help with the costs of applying for a federal R&D grant. Services include helping to determine the viability of submitting a proposal; assisting in the development of superior proposals; helping to fine tune business and commercialization strategies; and assessment of the final submission package.

To benefit from this free and educational statewide service, follow the steps outlined in the Apply for Assistance section. A representative from the Idaho GPI Fund will contact you following receipt of your Request for Idaho GPI Fund Assistance form in order to provide eligibility determination and one-on-one assistance.