NSF Small Business Innovation Research / Small Business Technology Transfer (SBIR/STTR)

The National Science Foundation (NSF) Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) program is a crucial federal grant initiative, distinct from traditional venture capital, designed to support high-risk, high-reward technological innovations. Its primary mission is to stimulate technological innovation, foster commercialization of federally funded research, and encourage the participation of small businesses in federal R&D. This non-dilutive funding mechanism allows startups to develop groundbreaking technologies without ceding equity, making it a highly attractive source of capital for early-stage companies focused on deep science and engineering.

The NSF SBIR/STTR program operates in two main phases. Phase I grants are awarded for proof-of-concept and feasibility studies, typically providing up to $275,000 to validate the technical merit and commercial potential of an idea. Successful Phase I awardees are then eligible to apply for Phase II funding, which supports full-scale research and development efforts aimed at bringing the technology closer to commercialization. Phase II grants can be substantial, often reaching up to $1,000,000, allowing companies to significantly de-risk their technology and attract follow-on private investment.

NSF SBIR/STTR focuses on a broad range of technology areas, emphasizing projects with strong scientific merit and clear pathways to societal and economic impact. The program plays a vital role in bridging the gap between fundamental research and market-ready products, enabling small businesses to tackle complex challenges and create new industries. For instance, in Fiscal Year 2023, the NSF awarded over $200 million in SBIR/STTR grants to hundreds of small businesses, underscoring its significant contribution to job creation and the growth of the U.S. innovation economy.