Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs

SBIR and STTR offer zero cost-share grants through a three-phased approach focused on products and services with commercial potential. However, there are several key differences between the programs:

- STTR projects require the small business to be teamed with a non-profit research institution such as a university or federal laboratory.

- STTR is focused on technology transfer from the Research Institution (RI) to the small business, and then ultimately to the market. This has been expanded over time to include situations where the innovation belongs to the small business, but the firm wants to include important resources from a nonprofit RI in the technology’s development.

- SBIR project principal investigators (PIs) must be primarily employed at the small business, meaning that he or she cannot work full time elsewhere during the project period. With a STTR project, the PI could be primarily employed at either the RI or the small business.

SBIR Eligibility

• For-profit company operating in U.S.
• At least 51% owned and controlled by U.S. individuals.
• No more than 500 employees, including affiliates.
• Principal investigator (PI) must have primary employment with business.
• Eligible small businesses can be owned by venture capital (VC), hedge funds (HF), and or private equity (PE) only if no one firm owns more than 50%.
• 67% (or 2/3) of Phase I and 50% of Phase II work must be completed by the small business.

STTR Eligibility

• For-profit company operating in U.S.
• At least 51% owned and controlled by U.S. individuals.
• No more than 500 employees, including affiliates.
• PI need not be employed by business.
• Non-profit research institution must be located in U.S. and defined as one of the following:
  • Non-profit college or university
  • Domestic nonprofit research organization
  • Federally funded R&D center.
• 40% of work must be done by business and 30% by the research institution.
• A written IP agreement must be in place between the research institution and the small business at the time of application.

Phase I: An SBIR-STTR Phase I Award establishes the technical merit, feasibility, and commercial potential of the proposed R&D efforts, and determines the quality of performance of the small business awardee prior to providing further federal support. EERE Phase I grants are worth $200k and last up to 12 months.

Phase II, Initial & Sequential (A & B): An SBIR-STTR Phase II award continues the R&D efforts initiated in Phase I. The results achieved in Phase I, the scientific and technical merit, and the commercial potential determine whether a Phase II application is funded. Only Phase I awardees are eligible for a Phase II award. EERE Phase II grants can be worth $1.1-$1.6M with a two-year performance period.

• Initial Phase II awards are made the year following the Phase I.
• Sequential Phase II (A & B) are awarded in the year following the end of the Initial Phase II. Phase II A awards are made so that there is no gap between the end of the Initial Phase II and the start of the Phase II A. Phase II B awards can be made so that they immediately follow the Initial Phase II or can be made one year after the end of the Phase II award. EERE does not make Sequential Phase II A awards, which continue research only—but does make some commercialization-focused Sequential Phase II B grants.
• Phase III awards allow the small business to pursue commercialization objectives resulting from the Phase I/II R&D activities. WPTO, or any Energy Department program other than SBIR, may award non-competitive, follow-on grants or contracts for products or processes that meet the mission needs of those agencies, or for further R&D.

 Only U.S. small businesses are eligible to participate in the SBIR program. An SBIR/STTR awardee must meet the following criteria at the time of Phase I and Phase II awards:

• Be independently owned and operated
• Be organized for-profit
• Have its principal place of business in the United States
• Be a small business with 500 or fewer employees, including affiliates
• Phase I awardees with multiple prior awards must meet the benchmark requirements for progress toward commercialization
• Present ideas that align with EERE’s mission to lead Energy Department efforts to develop and deliver market-driven solutions for energy-saving homes, buildings, and manufacturing; sustainable transportation; and renewable electricity generation.

Click here for more information on the process for registration completion and application submission.

If a minority-owned or women-owned small business, or a small business from an under-represented state is applying for an SBIR grant for the first time, there may be potential to get assistance with completing a Phase I application through the Energy Department’s Phase 0 Assistance Program.

• Q: We are wondering if our project would be an appropriate fit for this funding opportunity. 
  • A: We do not address or answer questions on specific projects and companies outside of the funding opportunity announcement process.
• Q: When is are applications for SBIR/STTR funding due?     
  • A: Please see here for the most up to date deadlines.
• Q: We are first time applicants and are unfamiliar with the application process and are looking for resources to assist in preparing an application. / We have previously submitted unsuccessful applications and are looking for resources to assist in preparing our application. Are there resources available to assist with the application process? 
  • A: First time applicants are eligible for SBIR Phase 0 through Dawnbreaker and can view additional resources here. 
  • The Water Power Technologies Office has also funded American Made Network Power Connectors who provide mentorship and guidance to all SBIR applicants. More details can be found here.