Funding for Small Business Innovation Extended

On September 30, 2022, President Biden signed into law the SBIR and STTR Extension Act of 2022, just one day before the funding authorization for these programs was set to expire. As the press release notes,

S. 4900 reauthorizes the Small Business Innovation Research (SBIR) program, the Small Business Technology Transfer (STTR) program, and related pilot programs. The SBIR and STTR programs are administered by various federal agencies and provide competitive awards for domestic small businesses to conduct research and development projects that have the potential for commercialization.

Funding is now authorized through 2025. In the past, the programs contributed to the success of Qualcomm, Lasik eye surgery, and the Perseverance rover on Mars. According to the SBIR site,

The research team found that the total employment resulting from the DoD SBIR/STTR awards in this study was 1,508,295 job years, or an average of 65,578 jobs per year over the 23-year period from 1995-2017.

The SBIR/STTR programs are known as “America’s Seed Fund.” They’re coordinated by the Small Business Administration (SBA) and funded by 11 participating federal agencies:

• Department of Agriculture (USDA)
• Department of Commerce (DOC)
• Department of Defense (DOD)
• Department of Energy (DOE)
• Department of Education (ED)
• Health and Human Services (HHS)
• Department of Homeland Security (DHS)
• Department of Transportation (DOT)
• Environmental Protection Agency (EPA)
• National Aeronautics and Space Administration (NASA)
• National Science Foundation (NSF)

The programs’ 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; and
• Increase private-sector commercialization of innovations derived from federal research and development funding.

Applications can be submitted via the SBIR website. A business is eligible to apply for funding through America's Seed Fund if the company:

• Is a for-profit entity located in the U.S.
• Has fewer than 500 employees (most applicants have fewer than 10).
• Is owned and controlled by U.S. citizens or permanent residents.

A company must also have a Unique Entity ID (UEI) from SAM.gov to receive SBIR/STTR awards. The full eligibility guidelines are here. The primary difference between STTR and SBIR is that for STTR, the small business must formally partner with a research institution. The research institution must be owned and operated exclusively for scientific or educational purposes, non-profit, and located in the US. Research institutions eligible to participate in the STTR Program include:

• Nonprofit college or university
• Domestic nonprofit scientific/research organization
• Federally Funded R&D Centers (FFRDC)

Accelerators, technical assistance centers, and other support organizations around the country help startups identify and apply for awards. Some states have matching programs to cover the costs of creating a proposal. Financing options include grants, loans, and investment capital. In phase 1, companies use funding to create proof-of-concepts for their innovations. The time frame for this is 6-12 months and the amount awarded can range from $50,000 to $275,000. In phase 2, the objective is to continue research and development efforts. The time frame is 24 months and the funding ranges from $400,000 to $1.8 million. In phase 3, funded companies pursue commercialization in the private sector or in the federal contracting marketplace. No SBIR/STTR funding is provided for this phase. Additional assistance for monetizing innovations created with the program funding is available via the Lab to Market Hub.