SBIR & STTRELIGIBILITY

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Small Business Innovation Research

SBIR awardees must meet the following criteria at the time of Phase I and II awards:

  • An organized for-profit with a place of business located in the United States.
  • More than 50 percent owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States, or by another for-profit business concern that is more than 50 percent owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in the United States.
  • No more than 500 employees, including affiliates.
  • For awards from agencies using the authority under 15 U.S.C. 638(dd)(1), an awardee may be owned and controlled by more than one VC, hedge fund, or private equity firm so long as no one such firm owns a majority of the stock.
  • Phase I awardees with Multiple prior awards must meet the benchmark requirements for progress toward commercialization.

Small Business Technology Transfer

STTR eligible small businesses must meet all of the following criteria at the time of the award:

  • An organized for-profit, with a place of business located in the United States.
  • At least 51 percent are owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States.
  • No more than 500 employees, including affiliates.

The nonprofit research institution must also meet specific eligibility criteria:

  • Located in the US
  • Meet one of three definitions:
    • Nonprofit college or university
    • Domestic nonprofit research organization
    • Federally funded R&D center (FFRDC)

For more detailed information, visit sbir.gov. 

What is the difference between the SBIR and the STTR programs?

Differences between SBIR and STTR programs include:

  • SBIR allows collaboration with nonprofit research institutions or federal research laboratories like universities, and STTR requires it
  • The amount of money in each program, with SBIR representing the most significant amount of funding
  • Definitions of a principal investigator

There is no right or wrong program. Choosing a program is a strategic decision based on your company’s situation and needs. However, there are some notable differences in the funding levels and some differences in the rules of eligibility between the two programs.

More agencies participate in the SBIR program than the STTR program. Thus, SBIR programs have more total funds available. However, with STTR awards, businesses do not need to employ a Principal Investigator. Therefore, a PI can continue working for a University or nonprofit research institution if that is desirable.

What are the qualifications small businesses should meet to participate?

  • Awardees must qualify as a Small Business Concern (SBC) as defined by SBA regulations 13 C.F.R §§  701-705. 
  • Be at least 51% owned, or have at least 51% of its voting stock owned, by US Citizen or lawfully admitted permanent.
  • For-profit located in the US

SBIR/STTR Program Eligibility Guide

What are solicitations?

You must respond to a funding solicitation from a particular agency because the SBIR/STTR programs do not accept "unsolicited" proposals (a proposal that does not address a topic specified in a currently open agency SBIR/STTR solicitation).

 

Solicitations are known by many names, including Request for Proposals (RFP), Funding Opportunity Announcement (FOA), Broad Agency Announcement (BAA), or simply Solicitation. No matter what it's called, this document provides the rules and guidance on preparing a response, also called an application or a proposal. Solicitation documents include Proposal Preparation Instructions, Application and Submission guidance, and Evaluation criteria.

How would I benefit from the SBIR/STTR program?

More than $2 billion is available annually in SBIR/STTR awards. SBIR/STTR funding is an excellent way of starting your business with non-dilutive capital, so you are not giving up equity or assuming debt.

Benefits include:

  • Winning an SBIR/STTR award often helps attract follow-on financing and licensing deals as it continually verifies that the technology is likely to have commercial value
  • Your firm retains the rights to intellectual property developed with an award
  • SBIR/STTR awards qualify small businesses to bid non-competitively for sole-source contracts with funding agencies for the developed technology
  • The program is designed to assist small businesses, with over 60% of the awardees of Phase I grants having less than 25 employees

What is the difference between a grant and a contract?

Funding agencies vary in providing grants or contracts as a funding mechanism. A grant is an agreement to carry out your research in return for a monetary award of funding. The federal government funds research and innovation for public benefit in this way.

 

Grant topics are generally initiated by the researcher applying for the grant, also known as the Principal Investigator in an academic setting. The granting agency does not wish to become your customer.

 

A contract is an agreement to provide a product or service needed by the agency awarding the contract. An example of this would be the procurement of new military technology by the Department of Defense. In this instance, the military becomes your customer.

 

Who is the Principal Investigator?

The Principal Investigator is the person responsible for overseeing the research. Typically, this individual has designed and overseen research efforts in the past, although if you have not done so, we can help you find ways to compensate.

 

The Principal Investigator, or PI, must commit to leading the project which typically involves taking at least partial employment at the small business at the time of the award. This does not preclude partial employment at a university or elsewhere, and in some instances, there are exceptions to this rule.

How long does it take to complete a SBIR/STTR Phase I proposal?

For first-time SBIR/STTR proposal writers, it is advisable to start working on a Phase I proposal at least eight weeks before the due date. Successful proposals require a substantial amount of work. The proposal author(s) should be proactive in soliciting feedback from experienced reviewers at every stage of the drafting process.

What are the solicitation dates?

Solicitation close dates vary by agency, although an important consideration is that many occur only once per year. For additional information, please review the SBIR/STTR Solicitations.

Who reviews SBIR/STTR proposals?

Depending on the agency, SBIR/STTR proposals may undergo an internal review, an external review, or a review that incorporates both internal and external reviewers. With internal reviews, agency members review the SBIR proposal. External reviews involve a review by people outside the agency, such as university personnel or other experts in the field.

 

The Department of Defense, the Department of Advanced Research Projects Agency, and the Department of Transportation all use an internal review process. NASA uses both internal reviewers and at least two independent reviewers. The NIH uses dual review systems comprised of an external peer review panel, an advisory panel, and an internal review group. NSF uses ad hoc external review panels. A separate review panel reviews USDA proposals for each topic area ad hoc review panel subsequently reviews proposals.

How will I know if I meet the funding agency's requirements?

SBIR/STTR applications are evaluated based on the following core review criteria:

  • Technical Merit
  • Team Qualifications
  • Value to Agency
  • Potential for Commercialization
  • Cost/Cost Realism

Each SBIR agency has different priorities in terms of these evaluation criteria. Remember receiving a  specific agency SBIR and STTR review criteria is essential, so consult the SBIR program information on agency websites and contact agency SBIR/STTR program leaders. Please allow enough time for the SBIR/STTR program leader to respond to your request and be aware of the closing dates.

 

Can I apply for Phase II without competing for Phase I?

Yes, NIH, DoD, and DoEd were recently authorized to award Phase II awards to firms that had not received a previous Phase I award. These three agencies are allowed but are not required to offer this provision. Before submitting a proposal, you will want to confirm this with the program manager.

Can I submit proposals responding to solicitations from more than one federal agency?

Proposals can be tailored to match multiple agencies' interests, priorities and unique requirements. (Since each agency has different needs and areas of emphasis, it is important to custom tailor each proposal to fit the agency.) View participating Federal Agencies here.

 

The agencies require that you disclose in each proposal whether you are submitting a "similar or related idea" to other agencies. It is crucial to disclose not only how multiple proposal submissions may be similar but also how they are different if there are substantial and essential differences between the proposals submitted to multiple agencies. More than one agency wants to give you an award. In that case, it is possible to accept numerous awards as long as the agencies agree.

 

However, if the proposals are duplicative, and multiple agencies are interested in giving your company an SBIR/STTR award, you can legally only accept one offer.

Can I submit the same proposal multiple times within the same agency?

The agencies differ considerably on how they view multiple proposals on one topic in their solicitation. They may have different rules about submitting the same idea in various proposals, and whether an idea can be submitted for consideration under both SBIR and STTR programs. It is important to read the specific agency’s solicitation guidelines carefully before submitting your proposal multiple times to the same agency.

Am I eligible for SBIR/STTR funding if I have already received venture capital, hedge funds, or private equity investments?

Yes, you may. However, to be eligible for SBIR funding, the Principal Investigator must be primarily employed by the business at the time of the award. There are nuances to this matter, so it's best to discuss it with your CTC consultant and read the agency solicitation thoroughly.

Agency Links

For more detailed information regarding individual agency’s programs, check out the agency links: