About the Programs

Congress created the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to strengthen the role of small, innovative companies in federally supported research and development (R&D). These highly competitive awards-based programs support scientific excellence and technological innovation across 11 federal agencies.

Federal agencies with extramural research budgets greater than $100 million are required to set aside a certain percentage of their budget to SBIR; those with research budgets greater than $1 billion are also required to set aside a certain portion for STTR.

The current set-aside is 3.2% for SBIR and 0.45% for STTR.

The goals of the SBIR program are to:

  • Stimulate technological innovation
  • Increase private-sector commercialization of innovations derived from federal R&D funding
  • Foster and encourage participation in innovation and entrepreneurship by socially and economically disadvantaged persons
  • Meet federal R&D needs

Though similar in overall objectives and structure to SBIR, the STTR program aims to facilitate cooperative R&D between small business concerns and U.S. nonprofit research institutions. To do so, the STTR program requires the small business applicants to formally collaborate with a research institution.

Both the SBIR and STTR programs include three phases.

Phase I: Feasibility and Proof of Concept

The objective of Phase I (R41 for STTR or R43 for SBIR) is to establish the technical merit, feasibility, and commercial potential of the proposed R&D efforts and to determine the quality of performance of the small business awardee organization prior to providing further federal support in Phase II.

Phase II: Research/Research & Development (R/R&D)

The objective of Phase II (R42 for STTR or R44 for SBIR) is to continue the R&D efforts initiated in Phase I to develop the project's commercial viability. Funding is based on the results achieved in Phase I and the scientific and technical merit and commercial potential of the project proposed in Phase II.

Phase III: Commercialization

The objective of Phase III is to pursue commercialization objectives resulting from the Phase I/II R/R&D activities. Although commercialization is referred to as Phase III, commercialization activities are integral throughout the SBIR/STTR process. While the NIH SBIR/STTR programs do not fund Phase III, there are several programs and resources available to awardees at various stages in their SBIR/STTR process. Visit the Commercialization Resources page for more information.

Only U.S. small business concerns are eligible to participate in these programs. The NIH SBIR/STTR website provides detailed information on the small business concerns eligibility criteria for these programs. Additional information about eligibility requirements is available in the current Funding Opportunity Announcement.

For the SBIR program, the Program Director (PD)/Principal Investigator (PI) must be primarily employed (greater than half time) with the small business at the time of award and for the duration of the project period.

For the STTR program, the PD/PI may be primarily employed either by the small business concern or the collaborating nonprofit research institution.

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