The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are key U.S. government initiatives designed to support American high-tech startups and small businesses in developing and commercializing innovative technologies.

The program is coordinated by the Small Business Administration, who describes it as “America’s Seed Fund.” It provides non-dilutive (not an investment, no impact on ownership or equity) funding to help small businesses develop technology and chart a path towards commercialization. Many great companies have found the SBIR/STTR funding instrumental to funding R&D.

For high-tech startups, SBIR and STTR funding also acts as an important validation of technical feasibility and market potential, often attracting additional private investment and commercial partnerships. And it shows other government agencies that a tech can be adopted with less risk.

Although closely related, SBIR and STTR differ in their collaboration requirements. SBIR primarily funds small businesses conducting independent research, without mandating a partnership. In contrast, STTR explicitly requires collaboration with a nonprofit research institution such as a university or federal laboratory, with structured intellectual property agreements between partners. Both programs, however, share core eligibility criteria: applicants must be U.S.-based, for-profit businesses with fewer than 500 employees, majority-owned by U.S. citizens or permanent residents, and must propose innovative research aligned with specific agency priorities. Additionally, STTR mandates that research institutions conduct at least 30% of the research effort, while small businesses must perform at least 40%.

Both SBIR and STTR follow a structured, three-phase process. Phase I, typically lasting 6–12 months and providing $100K–$275K, focuses on establishing technical merit, feasibility, and initial commercial potential. Successful Phase I awardees progress to Phase II, receiving between $750K–$1.8M over approximately two years to further research and development, including prototype creation. Phase III moves beyond direct SBIR/STTR funding, emphasizing commercialization, with opportunities for federal agencies to become customers or leverage other non-SBIR/STTR funding mechanisms.

Currently, eleven federal agencies—including the Department of Defense (DoD), National Institutes of Health (NIH), Department of Energy (DOE), NASA, and the National Science Foundation (NSF)—actively participate in SBIR/STTR programs. Each agency releases tailored solicitations aligned with their specific missions, requiring startups to clearly demonstrate how their technology addresses agency-identified needs. They do this following guidelines established by Congress as guided by the SBA via a policy directive for the program. Successful proposals for SBIR/STTR awards must explicitly highlight innovation, technical feasibility, commercial strategy, and the applicant team’s capability to execute. Proposals must also clearly articulate the potential business impact and how the technology aligns closely with the agency’s strategic objectives.

It is easier than you might think to apply for a SBIR or STTR grant. But the most successful companies only do so after really understanding customer mission needs and having conversations with leaders who will champion the resulting use of technology during and after grant. If there is a solicitation, step one is to read it! It will list submission instructions. Agencies will then review the proposal and grant awards they believe fit their needs. This is why the smart thing to do up front is to understand the needs and have conversations as early as possible with the granting organization.

There are some closely related programs designed to help firms grow beyond SBIR/STTR work, including:

• STRATFI (Strategic Funding Increase): An Air Force initiative designed to accelerate the commercialization and operational integration of promising technologies by significantly increasing funding support for small businesses that have previously secured SBIR or STTR Phase II awards, often complemented by matching funds from private or government sources.
• TACFI (Tactical Funding Increase): Similar to STRATFI but scaled for smaller, targeted investments, TACFI provides additional funds to rapidly transition technologies from SBIR/STTR Phase II projects into practical, operationally relevant military capabilities, typically involving collaboration with operational end-users.

This was just a high level overview and I worry a bit that I have made this seem a bit simpler and easier than the process really is. If you have a technology you believe can help the government reach out and let me know more about what you have and propose a way ahead for you. There are specialized consultancies I can refer you to that can help you increase the odds of success in winning an award and things you can do to ensure you serve the end users with the advanced technologies they need.

Key Resources:

• Official SBIR/STTR Portal: sbir.gov
• DoD Specific: dodsbirsttr.mil
• NSF SBIR/STTR: seedfund.nsf.gov
• NIH SBIR/STTR: sbir.nih.govDoE SBIR/STTR: https://www.energy.gov/science/sbir/small-business-innovation-research-and-small-business-technology-transfer