The Small Business Innovation Research (SBIR) and Small Business Technology Transfer  (STTR) programs are two of more than 50 programs managed and funded by agencies of the federal government that support the R&D of new products and services.  These two programs represent less than 3% of the total federal research budget.

Individuals and small businesses (less than 500 employees) are eligible to participate.  Eleven federal agencies (Defense, Energy, Transportation, Agriculture, Commerce, Education, NASA, National Institutes of Health, National Science Foundation, Environmental Protection Agency and Homeland Defense) participate and issue solicitations that cover a wide range of topic areas.  Companies must select a topic where they can apply their expertise in solving the problem outlined in the topic.  Companies must prepare a proposal (less than 25 pages) that demonstrates their ability to carry out the proposed research work.  

These programs are done in phases.  Phase I is a proof of concept or feasibility of the proposed solution.  The company will have six (6) months and $50 - 100,000 to carry out the work/research plan detailed in their proposal.  Phase II is the development of a commercial product or service that solves the problem.  A company will have up to twenty-four (24) months and from $500,000 - 1 million to bring the product or service to the commercial market.

Benefits: Ownership of the IP (patents, copyrights, trade secrets); no loss of equity in the company; and no repayment of the dollars used for R&D.  In many cases the company may also gain a customer(s).