Do you have a technological advance you’ve been working on? Are you an innovator looking for non-dilutive funding to advance your ideas that may help address American priorities? Perhaps a medical device? Or military applications, communication or security technology? Maybe your ideas or inventions are not as grand as these, but you need a little assistance with funding your idea and making your dream a reality.
For small businesses seeking to advance their technological inventions in the commercial marketplace, the U.S. Small Business Administration (SBA) administers the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs. The SBIR program is a highly competitive three-phase award program that encourages small businesses to explore their technological potential and helps them profit from their inventions.
The SBIR program has helped thousands of small businesses to compete for federal research and development awards. Their contributions have enhanced the nation’s defense, protected our environment, advanced health care, and improved the ability to manage information and manipulate data. Much of the innovation in the United States comes from startups and small businesses and these programs help foster and encourage this participation. By reserving a percentage of federal research and development funds for small businesses, the SBIR program protects small businesses and enables them to compete on the same level as larger companies.
Eleven federal agencies with an external research and development budget participate in the SBIR program, including the U.S. Departments of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Transportation, Homeland Security, the Environmental Protection Agency, National Aeronautics and Space Administration and National Science Foundation. Each agency is required to set aside no less than 3.2% of its overall external research and development budget to use either as an SBIR grant or contract.
These agencies issue requests for proposals for specific R&D projects they want accomplished and accept unsolicited proposals for other projects. The SBA collects solicitation information from participating agencies and publishes it quarterly in a Pre-Solicitation Announcement.
SBIR Phases
Following submission of proposals, agencies make SBIR awards based on small business qualification, degree of innovation, technical merit, and future market potential. Small businesses that receive awards or grants then begin a three-phase program:
• Phase I is the startup phase and provides awards from $50,000 to $275,000 for approximately six to 12 months to support exploration of the technical merit or feasibility of an idea or technology.
• Phase II provides awards of $750,000 to $1.8 million for as many as two years to expand Phase I results. During this time, the R&D work is performed and the developer evaluates commercialization potential. Only Phase I award winners are considered for Phase II.
• Phase III is the period during which Phase II innovation moves from the laboratory into the marketplace. No SBIR funds support this phase. The small business must find funding in the private sector or other non-SBIR federal agency funding.
STTR Program
A related program, STTR is coordinated by the SBA with other federal agencies that spend $1 billion or more in extramural research and development, including the U.S. Departments of Defense, Energy, Health and Human Services, and the National Aeronautics and Space Administration and National Science Foundation.
Like the SBIR program, the STTR program is also a high technology-based three-phase award program. The STTR program encourages cooperative research and development projects conducted jointly by a small business STTR awardee and a research institution that is either a nonprofit institution or a federally funded research and development center.
In 2024, 73 SBIR awards were granted for over $50 million to 25 NH companies. For those looking to see if SBIR can help advance their research there are resources available to help educate and guide small businesses through the process. The FOSTER program, managed by UNHInnovation has been instrumental in supporting innovative small businesses throughout the state with funding from SBA’s Federal and State Technology (FAST) grant.
To learn more about UNHInnovation and FOSTER visit FOSTER Program Business Grant Funding, visit UNHInnovation.unh.edu
To learn more about the SBIR and STTR programs, visit www.sbir.gov.
Amy K. Bassett is district director of the NH district office of the U.S. Small Business Administration. She can be reached at amy.bassett@sba.gov.
