The Small Business Innovation Research (SBIR) program is the largest source of early-stage startup funding in the United States. With over $4 billion awarded annually across 11 federal agencies, SBIR grants provide non-dilutive capital for research and development.
What Are SBIR Grants?
SBIR grants fund small businesses to conduct research and development that has commercial potential. The program has three phases:
Phase I: Feasibility Study - Amount: $50,000 to $275,000 - Duration: 6 to 12 months - Purpose: Prove that your idea is technically feasible
Phase II: Full Development - Amount: $500,000 to $1,500,000 - Duration: 24 months - Purpose: Continue R&D and develop a prototype or working product
Phase III: Commercialization - Amount: No SBIR funding (use other federal/private capital) - Purpose: Bring the product to market
Phase III does not receive SBIR dollars, but agencies can award follow-on contracts to SBIR companies without competition. This is where many SBIR recipients see the biggest financial returns.
Who Qualifies?
To receive SBIR funding, your business must:
- - Be a US-based, for-profit company
- - Have fewer than 500 employees
- - Be at least 51% owned by US citizens or permanent residents
- - The principal investigator must be primarily employed by your company
You do not need to be a startup. Established small businesses with R&D projects qualify too.
The 11 Participating Agencies
Each agency funds different types of research:
- Department of Defense (DOD) - Defense technology, cybersecurity, logistics
- National Institutes of Health (NIH) - Biomedical, health technology, therapeutics
- National Science Foundation (NSF) - Broad technology, materials, computing
- Department of Energy (DOE) - Clean energy, nuclear, advanced manufacturing
- NASA - Aerospace, space technology, Earth science
- USDA - Agricultural technology, food safety, rural development
- Department of Education - Educational technology, learning tools
- EPA - Environmental technology, pollution prevention
- Department of Commerce (NIST) - Standards, measurement, advanced manufacturing
- Department of Homeland Security - Security technology, first responder tools
- Department of Transportation - Transportation safety, infrastructure tech
SBIR vs STTR: What Is the Difference?
The Small Business Technology Transfer (STTR) program is the sibling of SBIR. The key difference: STTR requires a formal partnership with a research institution (university, federal lab, or nonprofit research org).
Choose SBIR if: Your company does the research in-house. Choose STTR if: You partner with a university or research lab.
STTR requires that the research institution perform at least 30% of the work. This is ideal if your technology builds on academic research.
How to Apply
Step 1: Find the Right Solicitation
Each agency publishes solicitations (topics) describing what they want to fund. Review these carefully at SBIR.gov. Look for topics that align with your technology.
Step 2: Register Your Business
Before submitting, register at: - SAM.gov (System for Award Management) - SBIR.gov (create a company profile) - Research.gov (for NSF submissions) - Specific agency portals (for NIH, DOD, etc.)
Registration can take 2-4 weeks. Start early.
Step 3: Write Your Proposal
A typical Phase I proposal includes: - Technical approach (what you will build and how) - Innovation and significance (why this matters) - Commercial potential (who will buy it) - Team qualifications (why your team can do this) - Budget and timeline
Step 4: Submit and Wait
Review periods vary by agency: - NSF: 4-6 months - NIH: 5-9 months - DOD: 2-4 months
Tips for Winning SBIR Grants
Match the topic closely. Agencies fund solutions to specific problems. Show how your technology directly addresses their stated needs.
Emphasize commercial potential. Reviewers want to fund technology that will reach the market, not lab experiments without customers.
Start with Phase I. Even if your technology is advanced, Phase I builds your track record with the agency.
Apply to multiple agencies. The same technology often fits topics at different agencies. Submit variations to increase your odds.
Win rate matters more than volume. A 20-30% SBIR win rate is strong. Focus on quality proposals over quantity.
Common Mistakes
- - Submitting proposals that do not match the solicitation topic
- - Underestimating the commercial plan section
- - Ignoring formatting requirements (instant disqualification at some agencies)
- - Not registering in SAM.gov early enough
- - Treating the budget as an afterthought
Using GrantMatched for SBIR
GrantMatched tracks active SBIR and STTR solicitations across all 11 agencies. When you create a profile describing your technology and business, the platform matches you to open topics ranked by relevance. This saves hours of reading through hundreds of solicitations to find the ones worth pursuing.