Through the SBIR and STTR Programs, 11 federal agencies make high-risk capital available to fund R&D at the nation’s most innovative small companies. Each year, federal agencies with extramural research and development budgets that exceed $100 million are required to set aside a specific percentage of that budget to be competitively awarded to small U.S. firms under the SBIR program. The SBIR allocation is 2.6% in federal fiscal year (FY) 2012, increasing to 3.2% in FY2017.
In order to be eligible for SBIR/STTR funding your small business must:
- Be for-profit (non-profit organizations cannot directly receive SBIR awards, but can be subawardees on a project
- Have less than 500 employees
- Be located in the U.S and conduct its R&D in the U.S. in company-controlled research facilities
- Have a Principal Investigator (PI) whose primary employment must be with the small business during project
- Be at least 51% U.S. owned and independently operated
- Firms more than 50% owned by corporations, VCs, institutions ARE NOT ELIGIBLE for SBIR/STTR awards UNLESS the majority entity meets the definition of a small business (< 500 employees; ownership)
- When reauthorization implemented – VC/HF/PEF owned companies eligible for up to 25% of NIH, NSF and DoE funds and 15% for all other agencies
CAUTION: These requirements are under revision by the Small Business Administration as a result of the recent reauthorization and some of these rules WILL be changing for some agencies. BBCetc will pass along information as it becomes finalized—in the meantime, please call us if you have questions about the current eligibility requirements.
The following links provide useful information about the programs: