Requirements
To qualify for the SBIR and the STTR program, you must meet the following requirements:
Be an American company
Have less than 500 employees
Conduct your research within the United States
Be actively involved in the research and development of new technologies, not just the manufacturing and production of “low-risk” projects that only need working capital.
Though small-business applicants may partner with a larger, established company, 50% of the primary employment must be done through the small business.
The program allows up to 33% of the first phase to be subcontracted and up to 50% of the work requirement to be subcontracted in the second phase.
Some agencies allow SBIR companies to be owned by venture capital firms, but some do not.
To see the entire list of requirements, visit their website.
The SBIR program is designed to provide limited funding to small businesses that possess technologies that may have the potential to impact both commercial and governmental industries. The fund has a minimum annual budget of $3.2 billion and functions by allowing federal agencies to announce specific requirements they would like to see filled by private companies. These are posted on the SBIR website and interested companies can submit an application detailing how their technology could fill this niche. If proof of concept is documented and feasible, the agency then awards a contract to fulfill that specific need. Though various federal agencies participate in this program, the Department of Defense awards around 50% of the fund annually, which, for aerospace and defense companies, could be interpreted as a competitive advantage. Other participating federal agencies include NASA, The Department of Homeland Security, the Department of Energy, and many more.
The program awards can be subdivided into two categories, grants and contracts. Grants operate more flexibly, allowing more upfront investment and less binding agreements. These topics tend to be more broad to allow for more creative research solutions. Contracts on the other hand are much more specific and require more oversight by the agency overseeing the funding. This includes specific acquisition processes, highly specialized topics, and more fiscal oversight of the program. It is important to note that NASA, the Department of Defense, and the Department of Homeland Security only offer contracts for SBIR recipients.