SBIR - What is SBIR?

The federal Small Business Innovation Research (SBIR) program and its parallel Small Business Technology Transfer (STTR) program provide more than $2 billion a year to small companies that are developing leading-edge technologies of interest to federal agencies. These programs provide companies with seed capital of up to $850,000 to develop technologies than can lead to commercial products.

At least once a year, the federal agencies listed below publish a solicitation listing topics or problem areas for which they are seeking innovative technology-based solutions.

Department of Defense National Institutes of Health National Aeronautics and Space Administration National Science Foundation Department of Energy

Department of Homeland Security Department of Agriculture Department of Education Department of Commerce Environmental Protection Agency

The SBIR/STTR Program has three phases of funding, which vary by agency. In receiving this funding, the company incurs no debt, gives up no equity, and retains intellectual property rights. The company may then commercialize the technology and even sell the resulting product to the federal government.

SBIR Program Phases

Phase I

For Phase I, small technology-driven companies respond to federal agency solicitations that list topics that are of interest to those agencies. Some  agencies list very specific problems that they want solved. Others list general areas of interest that allow a variety of different proposals. A company may submit a proposal for up to $100,000, enabling them to conduct a six month feasibility study. If selected, the company conducts the study and provides a confidential report detailing the work. The company may then submit a Phase II proposal.

Phase II

Phase II builds on the work of Phase I with the goal being a working prototype that demonstrates that the technology can successfully meet the stated need. Phase II development work often eliminates or greatly reduces the technology risk in new product development and it strongly encourages business planning to reduce the market risk of a new technology. Funding for Phase II is up to $750,000 over a two year period.

Phase III

Phase III is the final commercial development of the new product. Phase III does not receive any SBIR funding, but occasionally federal, non-SBIR funding can be obtained. However, if the technology shows promise of meeting a market need, usually other third party financing is available to the company.

STTR - Small Business Technology Transfer Program

The Small Business Technology Transfer (STTR) program promotes technology spin-offs from non-profit research institutions. It is almost identical to the SBIR program with several important differences.

• While the SBIR allows subcontracts, the STTR requires the proposing company to collaborate with a non-profit research institution such as a university.
• The STTR has a smaller budget than the SBIR program, with only five of the eleven agencies participating.
• STTR allows the project's principal investigator to be employed by either the research institution or the company, while SBIR requires employment by the company.
• STTR allows twelve months for completion of Phase I while SBIR allows only six months.

Did You Know?

Since 1983, 203 Georgia companies have received SBIR awards totaling more than $145 million!