Commercialize Your Tech Innovations
With The NJSBDC Tech Team

The Small Business Innovation Research (SBIR) program is a highly competitive program that encourages domestic small businesses to engage in Federal Research/Research and Development that has the potential for commercialization. Through a competitive award process, SBIR enables small businesses to explore their technological potential and provides the incentive to profit from commercialization. By including qualified small businesses in the nation's research and development (R&D) arena, high-tech innovation is stimulated, and the United States gains entrepreneurial spirit as it meets its specific R&D needs.

The Small Business Technology Transfer (STTR) program expands funding opportunities in the federal innovation arena. Central to the program is the expansion of the public/private sector partnership to include joint venture opportunities between 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 the performance of basic science and the commercialization of resulting innovations.

STTR differs from SBIR in several ways, including:

For an STTR award, the small business must perform at least 40% of the work and the single partnering research institution must perform at least 30% of the work.

STTR requires the Small Business Concern (SBC) and its partnering institution to establish an intellectual property agreement detailing the allocation of intellectual property rights and rights to carry out follow-on research, development or commercialization activities.

The mission of the SBIR program is to stimulate technology innovation by strengthening the role of innovative SBCs in Federal Research/ R&D.The program’s goals are four-fold:

1. Stimulate technological innovation.
2. Use small businesses to meet Federal R&D needs.
3. Foster and encourage participation in innovation and entrepreneurship by socially and economically disadvantaged small businesses.
4. Increase private-sector commercialization of innovations derived from Federal R&D funding.

FOR SBIR:

Phase I. The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed Federal Research /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 and have a six-month period of performance.Phase II. The objective of Phase II is to continue the Federal Research/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. Generally, only Phase I awardees are eligible for a Phase II award. SBIR Phase II awards normally do not exceed $1,000,000 and have a two-year period of performance.Phase III. The objective of Phase III, where appropriate, is for the small business to pursue commercialization objectives resulting from the Phase I and Phase II Federal Research/R&D activities. The SBIR program does not fund Phase III awards. In 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.

FOR STTR:

The STTR Program 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 Federal Research/R&D efforts and to determine the quality of performance of the small businesses prior to providing further Federal support in Phase II. STTR Phase I awards normally do not exceed $150,000 total costs for 1 year.Phase II. The objective of Phase II is to continue the Federal Research/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 Phase II project proposed. Only Phase I awardees are eligible for a Phase II award. STTR 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. STTR does not fund Phase III awards. In some Federal agencies, Phase III may involve follow-on non-STTR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government.

To receive an SBIR or STTR award, the awardee must qualify as a Small Business Concern (SBC) as defined by SBA regulations at 13 C.F.R. §§ 701-705. The eligibility requirements for the SBIR/STTR programs are unique and do not correspond to those of other small business programs.

See eligibility requirements below:

a.Type of Firm? Must be for-profit and located in the U.S.

b. Ownership? 1.Must be more than 50% directly owned/controlled One or more individuals who are U.S citizens/permanent residents, 2. Other for-profit small business concerns (each of which is directly owned and controlled by individuals who are citizens or permanent resident aliens of the U.S.), 3. A combination of (1) and (2), or 4. Multiple venture capital operating companies, hedge funds, private equity firms, or any combination of these, so long as no such firm owns or controls more than 50% of the equity.

c. Size? Must be fewer than 500 employees (includes part-time/temp)

Some exceptions are applicable, please see full eligibility requirements at: https://www.sbir.gov/sites/default/files/elig_size_compliance_guide.pdf

Below is the Timeline to Submit a Project Proposal for Funding:

120 Days: Develop Quad Chart, Specific Aims, or Project Pitch

120 Days: Arrange 1-on-1 meeting with Program Manager with Shared Document

60 Days: Obtain Relevant Registrations and Open Accounts to Submission Platforms

30 Days: Request Letters of Support; Review and Revise the Technical Narrative and Project Budget

7 Days: Upload Documents to Relevant Submission Platform

Each year, Federal Agencies with extramural R&D budgets that exceed $1 billion are required to reserve a certain percentage of the extramural research budget for STTR awards to small businesses. These agencies designate R&D topics and accept proposals. Currently, five agencies participate in the STTR program.

Department of Defense
Department of Energy
Department of Health and Human Services
National Aeronautics and Space Administration
National Science Foundation
Each agency administers its own program within guidelines established by Congress in the Small Business Act and by SBA in the STTR Policy Directive. 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.