Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants are federal government grants for small businesses that provide research and development funding that leads to a commercial product or service. They represent one of the largest sources of early-stage financing in the United States, accounting for approximately $2.5 billion in funding to small businesses per year. Scientists obtain SBIRs/STTRs by writing grant proposals and submitting them for review in a competitive process to get funding for innovative technology development. The National Institute of Health (NIH) and the National Science Foundation (NSF) fund most life sciences/biomedical technology SBIRs/STTRs.
- SBIR/STTR money is not a loan. No repayment is required.
- The agencies providing the funds have 0% equity in your business, so you still own 100% (non-dilutive funding). Some other seed funds do impact your business shares (dilutive funding).
- Because of an interest in innovation rather than making a profit, the SBIR program tolerates more risk and funds ventures earlier than venture capitalists.
Source: Small Business Administration: SBIR.gov.
About Small Business Opportunities – This NCATS resource has good descriptions on SBIR and STTR program benefits and differences as well as other small business programs.