SBIR or STTR, and Eligibility Requirements

Similarities of SBIR and STTR

    • Most federal agencies offer both SBIR and STTR managed by the same personnel
    • Both programs are structured in three phases: Phase I, Phase II, and Phase III
    • The level of funding for each grant (not for the program itself) is similar: $150K for Phase I and $1M over two years for Phase II
    • Both require participation of a small business

Differences Between SBIR versus STTR

    • STTR is only 0.45% of the participating agency's extramural research budget (if over $1 billion) vs. 3.2% for SBIR
    • Only five agencies participate: DoD, DoE, PHS, NASA, and NSF

STTR Requires Small Businesses to Team with an Outside, Not-for-Profit Research Institution (RI)

    • College/university
    • Federally funded R&D center (FFRDC)
    • Government-Owned, Contractor-Operated lab (GOCO) Research Institution must agree to license intellectual property to the small business
    • Small for-profit business must be the prime contractor and the commercializing entity

ADVANTAGES of STTR

    • Longer Phase I -- one year for STTR versus six months for SBIR
    • RI can perform 30% to 60 % of the research work -- whereas in SBIR small business must do at least 66.67%
    • PI can be from RI at most agencies (not DoE and co-PIs required @ NSF) -- whereas in SBIR the PI must be at least 51% employed by prime contractor

Eligibility Requirements for SBIR and STTR

Examples of federal agency eligibility requirements for submission of the Phase I SBIR/STTR include but are not limited to the following. Make sure to check for additional eligibility requirements of the individual program or federal agency to which you are planning to apply.

SBIR Eligibility 

Applicant business must be American-owned (with place of business in the US) to meet federal agency ownership/eligibility requirements.

    • The total number of employees of the parent company and its subsidiaries cannot exceed 500.
    • The applicant business must have already identified the project team from its current employees and consultants or will have hired qualified team members before starting the grant work.
    • The principal investigator (PI) on the proposal must be employed by the applicant small business for more than 50% of his/her time at the time of the federal Phase I award.
    • Partnership with an academic/non-profit organization is allowed but not required. The majority of the proposed work is to be conducted by the applicant and not more than 33% (for Phase I) of the dollar amount of the proposed work can be subcontracted.

STTR Eligibiulity

The eligibility requirements for the STTR are similar to those for the SBIR grant, with a few additions:

    • The principal investigator (PI) on a STTR grant proposal must be either a university faculty member or an employee of the small business as per the eligibility requirement of the federal agency and stated in the solicitation.
    • The STTR application must be submitted by the small business in partnership with a research institution, such as a university or federal laboratory.
    • The small business must undertake a minimum of 40% of the work and the academic/non-profit partners must be responsible for a minimum of 30% of the work. Up to 30% of the work may be performed by a subcontractor.
    • The small business MUST have a collaborative/partnership agreement with a non-profit institution as requested by the federal agency, including agreement on sharing the intellectual property.