Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Funding
The SBIR and STTR are federal government seed funds for small businesses that provide research and development funding that leads to a commercial product. They represent one of the largest sources of early-stage financing in the U.S., 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 obtain 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 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% of your company (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 themselves, the SBIR program tolerates more risk and funds ventures earlier than venture capitalists.
Source: Small Business Administration: SBIR.gov
Resource
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.