SBIR/STTR

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are highly competitive programs that encourage domestic small businesses to engage in Federal Research/Research and Development (R/R&D) with the potential for commercialization. Through a competitive awards-based program, SBIR and STTR enable small businesses to explore their technological potential and provide the incentive to profit from its commercialization.

About the Programs

The mission of the SBIR/STTR programs is to support scientific excellence and technological innovation through the investment of Federal research funds in critical American priorities to build a strong national economy.

The program's goals are to:

Stimulate technological innovation.
Meet Federal research and development needs.
Foster and encourage participation in innovation and entrepreneurship by women and socially or economically disadvantaged persons.
Increase private-sector commercialization of innovations derived from Federal research and development funding.

In addition, the STTR program aims to:

Foster technology transfer through cooperative R&D between small businesses and research institutions.

Who is Eligible to Apply?

Only United States small businesses are eligible to participate in the SBIR/STTR programs. A small business must meet the eligibility requirements set forth at the time of Phase I and II awards, which specify the following criteria:

Organized for profit, with a place of business located in the United States
More than 50% owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States, or by other small business concerns that are each more than 50% owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States; and
No more than 500 employees, including affiliates

Universities are ineligible to apply for SBIR/STTR funding. These funding opportunities are not intended to replace research grant funding.

For STTR, the partnering nonprofit research institution must also meet certain eligibility criteria:

Located in the US
Meet one of three definitions:

Nonprofit college or university
Domestic nonprofit research organization
Federally funded R&D center (FFRDC)

STTR differs from SBIR in three important aspects:

The small business awardee and its partnering institution are required to establish an intellectual property agreement detailing the allocation of intellectual property rights and rights to carry out follow-on research, development or commercialization activities.
STTR requires that the small business perform at least 40% of the R&D and a single partnering research institution perform at least 30% of the R&D.
SBIR's require a Principle Investigator to be more than 50% employed by the small business.

See the Eligibility Guide for more detailed information.

The Three Phases of SBIR/STTR

The SBIR Program is structured in three phases:

Phase I. The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed R/R&D efforts and to determine the quality of performance of the small business awardee organization prior to providing further Federal support in Phase II. SBIR/STTR Phase I awards are generally $50,000 - $250,000 for 6 months (SBIR) or 1 year (STTR).

Phase II. The objective of Phase II is to continue the R/R&D efforts initiated in Phase I. Funding is based on the results achieved in Phase I and the scientific and technical merit and commercial potential of the project proposed in Phase II. Typically, only Phase I awardees are eligible for a Phase II award. SBIR/STTR Phase II awards are generally $750,000 for 2 years.

Phase III. The objective of Phase III, where appropriate, is for the small business to pursue commercialization objectives resulting from the Phase I/II R/R&D activities. The SBIR/STTR programs do not fund Phase III. At some Federal agencies, Phase III may involve follow-on non-SBIR/STTR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government.

Conflicts of Interest

Participation in SBIR/STTR programs by WVU faculty through a Small Business can create conflicts of interest (COIs) on the part of the faculty members. This happens when a faculty member is the co-founder or owner of the Small Business applying for the funding, and simultaneously will do research on a subaward between the Small Business and WVU. Among the reasons for the COI are:

The potential for the research to be viewed as biased or not objective since the investigator may have financial benefit from the outcome of the research due to their interests in/relationship with the company, as well as intellectual property resulting from the research for which the company would be a likely commercial vehicle;
Concern that the individual may be using their WVU lab, students, staff, funds or other WVU resources to support their Small Business, jeopardizing academic research and the progress of their students or staff; and
The potential for the blurring of the non-profit/for-profit boundary, in that the tax-exempt facilities could be used in a way that competitively advantages the for-profit company.

A COI management plan must be discussed and created to pursue SBIR and STTR funding by employees or faculty members. Connect with the WVU Conflicts of Interest Office to discuss management plans.

Fraud Indicators

Background

The US Small Business Agency established 10 minimum requirements for the 11 federal agencies participating in SBIR/STTR programs (“Participating SBIR/STTR Agencies” or “Agencies”) to prevent fraud, waste, and abuse in SBIR/STTR programs. The Small Business Act requires efforts by the Participating SBIR/STTR Agencies to mitigate the programs’ fraud risks. The Act also includes a provision that the US Government Accountability Office (“GAO”) study fraud, waste, and abuse in the programs and report to Congress every 4 years. Following recommendations by the most recent GAO report, Participating SBIR/STTR Agencies are updating their practices to better detect and prevent fraud, waste, and abuse.

Agencies are also required to establish potential fraud detection indicators, coordinate the sharing of information on fraud, waste, and abuse with other federal agencies, and improve education and training of SBIR/STTR program officials, applicants, and awardees on issues related to fraud, waste, and abuse. A few examples of fraud indicators and how Agencies use these indicators are listed below.

The increased scrutiny over applications and awards is leading to applications being denied or withheld as a result of being flagged by the following indicators. We recommend startup companies be aware of these indicators, along with all federal and university rules and regulations associated with SBIR/STTR grants to ensure compliance.

Recommendations

Ensure the company has an appropriate and eligible (preferably non-WVU) address.
The company should have a minimum of one employee, although more may be required by certain agencies and funding opportunities.
The company should establish a website and internet presence that is updated regularly with information, news, and non-confidential information.
Companies should not submit multiple overlapping applications without disclosing this information within the applications and making plans for which application to abandon should both be funded.

Interested in Applying?

If you are interested in applying for SBIR/STTR funding for your small business, please fill out our intake form.

Faculty Start-up Grant Submission Intake Form

Email OIC