SBIR vs STTR Grants: Key Differences Explained

What Is the Difference Between SBIR and STTR?

If you are a small business exploring federal funding for research and development, you have likely come across both the SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) programs. While they share many similarities, the differences between them can significantly affect your application strategy and chances of winning funding.

Both programs provide non-dilutive, non-repayable grants and contracts to small businesses for research and development, but they differ in key areas that every applicant should understand before applying.

SBIR vs STTR: The Core Difference

The fundamental difference between SBIR and STTR is the requirement for a research institution partner.

SBIR (Small Business Innovation Research)

The small business is the primary performer of the research
No mandatory research institution partnership
The small business must perform at least two-thirds (67%) of the research in Phase I and at least one-half (50%) in Phase II
The Principal Investigator (PI) must be primarily employed by the small business

STTR (Small Business Technology Transfer)

Requires a formal partnership between the small business and a U.S. nonprofit research institution (university, federal lab, or FFRDC)
The small business must perform at least 40% of the work
The research institution must perform at least 30% of the work
The PI can be employed by either the small business or the research institution

Eligibility Differences

Both programs share core eligibility requirements: the company must be a for-profit U.S. small business with 500 or fewer employees, and it must be at least 51% owned by U.S. citizens or permanent residents. However, STTR adds the requirement of a formal Cooperative Research and Development Agreement (CRADA) with a qualifying research institution.

Companies with foreign ownership considerations should be aware that both programs have the same ownership rules, but the research institution partnership in STTR can sometimes help address workforce limitations.

Funding Levels Comparison

SBIR and STTR funding levels are similar within each agency but can vary significantly across agencies. Here is a general comparison for the three largest SBIR/STTR agencies:

NIH (National Institutes of Health)

Phase I: Up to $275,589 (SBIR) / $275,589 (STTR)
Phase II: Up to $1,842,264 (both programs)
See our complete NIH SBIR guide for details

NSF (National Science Foundation)

Phase I: Up to $275,000 (both programs)
Phase II: Up to $1,000,000 (both programs)
See our complete NSF SBIR guide for details

DoD (Department of Defense)

Phase I: $50,000 - $250,000 (varies by component)
Phase II: $500,000 - $1,750,000
See our complete DoD SBIR guide for details

For a detailed breakdown of funding across all three phases, see our SBIR Phase I vs Phase II vs Phase III funding guide.

When to Choose SBIR vs STTR

Choose SBIR When:

Your company has the technical staff and facilities to perform the majority of the research in-house
You want maximum control over the research direction and intellectual property
Your PI is a full-time employee of your company
You do not need access to university labs or specialized academic expertise

Choose STTR When:

Your technology relies on research expertise or facilities at a university or federal lab
Your PI is currently a university professor or researcher
You need access to specialized equipment or facilities at a research institution
You want to leverage academic research to accelerate your technology development
Your company is early-stage and does not yet have a full R&D team

Application Process Differences

The application processes for SBIR and STTR are largely similar within each agency. Both require the same types of documents: a technical proposal, budget, commercialization plan, and supporting documents. The key additional requirement for STTR is the CRADA, which outlines the roles, responsibilities, and IP arrangements between the small business and the research institution.

To avoid pitfalls in either program, review our guide on common SBIR application mistakes.

Can You Apply to Both SBIR and STTR?

Yes. A company can submit proposals to both SBIR and STTR solicitations, even within the same agency and the same submission cycle. In fact, applying to multiple SBIR and STTR opportunities simultaneously is a smart strategy to maximize your chances of securing funding.

However, you cannot submit the same proposal to both an SBIR and an STTR solicitation. Each proposal must be unique and tailored to the specific program and topic.

Intellectual Property Considerations

In both SBIR and STTR, the small business retains the primary IP rights. However, STTR adds complexity because two organizations are involved in the research. The CRADA must address:

Who owns IP developed during the project
Licensing rights for each party
Publication rights for the research institution
Background IP that each party brings to the project

Negotiate these terms carefully before submitting your proposal.

Getting Started with SBIR or STTR

Whether you choose SBIR or STTR, the first steps are the same:

Complete your SAM.gov registration
Identify the right agency and solicitation for your technology
Understand the timeline for SBIR grants
Prepare a compelling proposal

An experienced SBIR grant writer can help you navigate the differences between the programs and develop a winning proposal for either one.

Contact MJP Grant Consulting for a free consultation to determine which program is the best fit for your company.

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