SBIR vs STTR: what actually differs
Same US federal small-business R&D funding pot, two different rules about who has to do the research.
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) are both US federal programmes that award non-dilutive funding to small businesses doing R&D, structured in the same Phase I → Phase II → Phase III sequence. 11 federal agencies run SBIR; only five run STTR — the Department of Defense, Department of Energy, NASA, NIH and NSF.
The difference that actually matters is subcontracting to a research institution (a university, federal lab, or FFRDC):
| SBIR | STTR | |
|---|---|---|
| Research-institution partner | Optional | Required |
| Max. share subcontracted to it | 33% (Phase I), 50% (Phase II) | Up to 60% |
| Minimum work by the small business | Not fixed by this rule | At least 40% |
| Minimum work by the research institution | — | At least 30% |
| Principal investigator's employer | The small business | Either the small business or the research institution |
In practice: if your project needs a large university partnership and the PI might sit at that university rather than at your company, STTR is the fit. If you plan to do the research in-house and only occasionally subcontract to a lab, SBIR's lighter 33%/50% caps are less restrictive. As of April 2026, agencies may issue an SBIR/STTR Phase I award up to $323,090 and a Phase II award up to $2,153,927 without separate SBA approval — individual agencies can and do award less, and some award more with SBA sign-off.
Sources
- SBIR.gov — SBIR or STTR? Which one is right for me?
- SBIR.gov — Am I eligible to participate?
- SBIR.gov — About SBIR and STTR
Last reviewed 2026-09-25. Rules and figures change — follow the links above to confirm anything you plan to rely on.