The US government, through the National Institute of Health (NIH) and National Science Foundation (NSF), has two types of small business seed funds: Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR). Here’s a breakdown of the differences.
Small Business Innovation Research (SBIR)
SBIR funds small, early-stage businesses that are developing and want to commercialize innovative biomedical technologies.
- Institution partners, such as universities, are permitted but not required.
- Division of Labor: Your business must complete at least 67% of the labor needed during Phase I and 50% needed during Phase II. The remainder may be outsourced.
- The principle investigator/program director must have primary employment (more than 50% of their employed time) with the small business.
- Eleven federal agencies participate in SBIR. The ones providing the most funding in the life sciences include the National Institute of Health in the Department of Health and Human Services and the National Science Foundation.
Small Business Technology Transfer (STTR)
STTR funds small businesses that are developing and want to commercialize innovative biomedical technologies in collaboration with a nonprofit research institution.
- Institution partnership, such as with a university, is required.
- Division of Labor: Your business must complete at least 40% of the labor needed, and the research institution must complete at least 30%. The remainder may be outsourced.
- The principle investigator/program director must have at least 10% effort (10% of their employed time) on the project.
- Only five government agencies participate in STTR:
- Department of Defense
- Department of Energy
- Department of Health and Human Services
- National Aeronautics and Space Administration
- National Science Foundation
Resources
The 11 federal agencies participating in SBIR
Source: Franca-Koh J. & Davis S. Funding and Commercialization Resources for Small Businesses. SBIR Development Center. July 13, 2021.
