SBIR and STTR are the two largest federal grant programs specifically for small businesses doing research and development. Together they award over $4 billion annually. Both are non-dilutive — you keep your equity.
If you're building something technically innovative, one of these programs almost certainly applies to you. Here's the difference and how to choose.
The Short Version
SBIR (Small Business Innovation Research): Your company does the R&D. You can use university researchers as consultants, but the primary work stays in-house.
STTR (Small Business Technology Transfer): You partner formally with a university or federal research lab. The research institution does a meaningful portion of the work (at least 30%) — this isn't just a logo partnership.
If you have a university research partner already engaged in your technology, STTR is worth considering. If you don't, SBIR is the simpler path.
How Both Programs Work
Both programs have three phases:
Phase I — Proof of Concept
- SBIR: Up to $275,000, typically 6–12 months
- STTR: Up to $275,000, typically 12 months
- Goal: Demonstrate the technical feasibility of your innovation
Phase II — R&D
- SBIR: Up to $1.75 million, typically 2 years
- STTR: Up to $1.75 million, typically 2 years
- Goal: Full R&D development; requires successful Phase I
- Note: Some agencies accept "Direct to Phase II" applications without prior Phase I
Phase III — Commercialization
- No direct federal SBIR/STTR funding (with some exceptions)
- Focus on bringing the technology to market
- Can lead to sole-source government contracts for the technology you developed
Which Agencies Participate?
Eleven federal agencies are required to participate in SBIR. Five participate in STTR. Each agency has its own priorities, funding topics, and timelines.
SBIR participants (major ones):
- NIH — health, medicine, biotechnology
- NSF — broad scientific and technological innovation
- DOD — defense technology (Air Force, Army, Navy, DARPA each have separate programs)
- DOE — energy technology
- NASA — aerospace and related tech
- USDA — agriculture and food
STTR participants:
- NIH, NSF, DOD, DOE, NASA
Each agency publishes its own Solicitations — documents describing specific topic areas they want to fund. Your application must align with one of these topics.
Key Differences in Detail
Primary Performance Requirement
SBIR: At least 67% of the Phase I work must be performed by the small business. Consultants are fine, but your company has to do most of it.
STTR: At least 40% of the work must be performed by the small business. At least 30% must be performed by the research partner. The remaining 30% is flexible.
Research Partner Requirement
SBIR: No formal research partner required. You can collaborate with universities informally.
STTR: Requires a formal written agreement with a US-based nonprofit research institution (university, federally funded R&D center, or nonprofit research institution). The agreement must specify each party's role, IP rights, and the work allocation.
IP Ownership
Both programs allow the small business to retain IP rights to what they develop — this is one of the most significant advantages over other government contracts.
Under STTR, your agreement with the research partner must address IP rights upfront. Universities typically have technology transfer offices that will negotiate these terms. Start that conversation early.
How to Find Open Solicitations
SBIR.gov is the central portal. Each agency posts its solicitations there, with topic descriptions, deadlines, and agency contacts.
SBIR solicitations open and close on agency-specific schedules. NIH, for example, has three annual deadlines. NSF runs rolling applications. DOD publishes solicitations twice a year (spring and fall).
Set up email alerts at SBIR.gov for your relevant agencies and keywords.
Writing a Competitive Application
SBIR/STTR applications are scored on:
- Significance — does this solve an important problem?
- Innovation — is this genuinely new? What makes it better than what exists?
- Approach — is your research plan rigorous and feasible?
- Team — do you have the expertise to execute?
- Commercialization potential — is there a real market for this?
The biggest mistake applicants make: writing a great science application without a convincing commercialization section. Reviewers want to fund research that will become a product — make that path explicit.
What to Do Before You Apply
- Get your SAM.gov registration active — required for submission; takes 7–10 business days
- Identify your target agency and topic — your project must fit a published solicitation topic
- Talk to the program officer — almost every agency encourages pre-application conversations with the program officer listed in the solicitation. Use this. They'll tell you if your project fits.
- Review funded abstracts — SBIR.gov has a database of funded awards. Reading abstracts from your target agency gives you a model for the language and framing that works.
The Honest Assessment
SBIR is competitive. Accept rates vary by agency from roughly 10% to 25% for Phase I. Multiple submissions are normal — many successful SBIR recipients applied 2–3 times before their first award.
The funding is worth the effort. A $275,000 Phase I award buys 6–12 months of R&D runway with zero dilution. A Phase II award is $1.75 million. For early-stage deeptech companies, this is often better than seed funding.
Founder Kit identifies SBIR and STTR opportunities matched to your business profile and helps you understand which solicitations are the best fit before you invest time in an application.