Expert Advice

SBIR or STTR: Which Small Business Grant is Right for You?

If you are a small business with an innovative product or service that your firm has developed, perhaps a SBIR or STTR grant is right for you. 
By Christina Jones

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are congressionally-mandated programs designed to encourage small businesses to participate in research and development of new and innovative products and services that can benefit the federal government and lead to marketable use in the commercial marketplace. 

So, what is the basic difference between the two? 

The primary difference is that STTR participants are formally required to collaborate with a not-for-profit research institution during Phase I and Phase II of their proposals. Such a partnership is optional for SBIR proposals. The following explains the basics of the award phases.

  • Project Pitch: Although not one of the traditional phases, it is an opportunity for your company to “pitch” your idea to one of the participating agencies and potentially be invited to submit a full phase I proposal.
  • Phase I: Determine feasibility, establish technical merit, and determine if the product or service has commercialization potential.  Phase I awards typically don’t exceed $150,000 and generally have a six-month performance period.
  • Phase II: Purpose of Phase II is to expand upon the Research and Development.  These awards typically do not exceed $1,000,000.  It is important to note, that a company may win a “direct to Phase II award” through SBIR only (not STTR) but the typical path is to receive award after Phase I.
  • Phase III: This is the commercialization phase or when the company seeks to take their product or service to market.  The SBIR/STTR programs does not fund Phase III awards.  The small business is expected to pursue a customer, such as a federal customer, through somewhat traditional methods.  In other words, a firm would market themselves to the federal government as a vendor seeking a contract.

Although the Procurement Technical Assistance Centers don’t generally provide grant assistance, SBIR/STTR’s are the exception.  If you are interested in learning more about these grants and/or need review or assistance with a grant proposal, please sign up for services or reach out to your PTAC counselor.