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|Quick Learn™ SBIR/STTR chart
What is SBIR/STTR
Quick Learn™ Fact Sheet
Qualifications for SBIR
Use of the Funds
Phase l - Feasibility
Phase ll - Prototype
Phase lll - Commercialization
|A comparison between SBIR and STTR and general program details. See MTIP's Agency Guides for more specific details.|
The federal SBIR and STTR programs are sources of a combined $2.5 billion in early-stage R&D seed capital set aside exclusively for small, tech-based U.S. companies. These programs offer grants or contracts to support serious R&D and subsequent commercialization of technologies valued both by the business applicant and the federal government.
STTR is another program that expands funding opportunities in R&D. This program promotes public/private partnerships and requires collaboration with a research institute. Find out more here.
|A short handout highlighting the SBIR program and describes characteristics of a good SBIR candidate|
In order to be eligible to participate in SBIR businesses must meet the following qualifications:
- Organized for profit, with a place of business located in the U.S.;
- At least 51% owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the U.S., or
- At least 51% owned and controlled by another for-profit business concern that is at least 51% owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States; and;
- 500 or less employees, including affiliates (exceptions may apply).
The SBIR programs are designed to fund the development of truly innovative technologies. These technologies often represent advancements in the state-of-the-art in their field, but some agencies will also fund significant improvements of existing technology and/or innovative applications of existing technology.
SBIR funding is unique in that it does not have to be matched, nor does it ever have to be repaid by the small business. The award monies can be used to fund most costs directly associated with the R&D project – e.g., salaries/wages, benefits, supplies and materials, and in some cases, equipment. The money can also be used to pay a share of the awardee’s overhead and administrative expenses and even pays the awardee company a profit of up to 7%.
The following government organizations participate in the federal SBIR program. Each agency administers its own individual program within guidelines established by Congress. These agencies designate R&D topics in their solicitations and accept proposals from small businesses. Awards are made on a competitive basis after proposal evaluation. Next to each entity is the acronym for which they are commonly known. Not all entities participate in STTR. Learn more about STTR at MTIP's webpage.
Department of Agriculture (DOA)
Department of Commerce - National Institute of Standards and Technology (NIST)
Department of Commerce - National Oceanic and Atmospheric Administration (NOAA)
Department of Defense (DoD)
Department of Education (DoED)
Department of Energy (DOE)
Department of Health and Human Services (*DHHS)
Department of Homeland Security (DHS)
Department of Transportation (DOT)
Environmental Protection Agency (EPA)
National Aeronautics and Space Administration (NASA)
National Science Foundation (NSF)
*DHHS includes opportunities from four main components including the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA) and the Administration for Children and Families (ACF).
Because of the levels of funding available – more than $1 million in many cases – SBIR is a highly competitive program. To be successful in them, applicants must commit to learning how the programs operate and how to prepare and submit winning proposals. The Montana Technology Innovation Partnership (MTIP), a program within the Montana Department of Commerce, provides free, individualized assistance to Montana companies competing in the SBIR/STTR programs. MTIP has demonstrated repeatedly over many years that its involvement early and often throughout the proposal process can significantly improve its clients’ chances of developing winning proposals.
A Phased Program
SBIR is structured in three phases:
Phase I. The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed R/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. SBIR Phase I awards normally do not exceed $150,000 total costs for 6 months.
Phase II. The objective of Phase II is to continue the R/R&D efforts initiated in Phase I. 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. Only Phase I awardees are eligible for a Phase II award. SBIR Phase II awards normally do not exceed $1,000,000 total costs for 2 years.
Phase III. The objective of Phase III, where appropriate, is for the small business to pursue commercialization objectives resulting from the Phase I/II R/R&D activities. The SBIR program does not fund Phase III. Some Federal agencies, Phase III may involve follow-on non-SBIR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government.
Small Business Technology Transfer (STTR) is another program that expands funding opportunities in the federal innovation research and development (R&D) arena. Central to the program is expansion of the public/private sector partnership to include the joint venture opportunities for small businesses and nonprofit research institutions. The unique feature of the STTR program is the requirement for the small business to formally collaborate with a research institution in Phase I and Phase II. STTR's most important role is to bridge the gap between performance of basic science and commercialization of resulting innovations.
Caution! The SBIR/STTR programs are not for everyone. The best candidates are companies with a history of innovation and innovative thinking. These companies also possess knowledge and experience in preparing competitive research proposals, ample experience in using the Internet and electronic communications, and more than anything else, a strong commitment by top management. In comparison, many independent inventors tend not to be good SBIR/STTR candidates, because they tend to lack the skills needed to prepare and submit highly competitive proposals, and they often resist sharing the information needed to attract key team members and commercial partners. If you’re not sure whether your company is a good match for one of these programs, call us, and we’ll help you make an informed decision.
MTIP's Profile of a Good SBIR/STTR Candidate is a great document to review the qualifications and attributes necessary for a candidate to succeed in the SBIR/STTR programs.
Are you ready to meet with a counselor to learn more about commercialization your technology?
Register for one-on-one counseling today or call MTIP (406) 841-2749.