Small Business Technology Transfer (STTR) Program: Funding for R&D Partnerships

STTR fits a small business developing a technology through a formal research partnership with an eligible nonprofit research institution. The business submits the proposal and receives the grant or contract; the partner supplies a defined share of the research. Before writing, agree on the work, principal investigator, budget, and rights needed to commercialize the result.

SBIR and STTR were reauthorized in April 2026 through September 30, 2031. Check an actual open STTR solicitation rather than treating program authorization as an open nationwide application. Search funding opportunities, then follow the issuing agency’s current notice and amendments.

Check Both Partners

• Small business: A qualifying U.S. for-profit small business, generally with no more than 500 employees including affiliates, must be the applicant. More than 50% must be owned and controlled by eligible U.S. citizens, permanent resident aliens, or qualifying U.S. small businesses. The special SBIR route for certain majority venture-capital ownership does not apply to STTR.
• Research institution: The required partner must be an eligible U.S. nonprofit college or university, domestic nonprofit research organization, or federally funded research and development center. A commercial consultant or any federal laboratory does not qualify merely by being called a research partner.
• Research location and disclosures: Research generally must occur in the United States. Complete the agency’s ownership, foreign-affiliation, research-security, and personnel disclosures; an ordinary business registration does not replace these checks.

STTR agencies include Agriculture, Defense, Energy, Health and Human Services, NASA, and the National Science Foundation. Each funds its own topics and uses its own application system.

Divide the Work Before You Divide the Money

In both Phase I and Phase II, the small business must perform at least 40% of the research and development work and the required partner research institution at least 30%. The remaining share may be performed by either or by permitted additional participants. Follow the solicitation’s method for calculating the shares and justifying costs.

A plan that assigns 20% to the business and 80% to the university fails the business’s minimum even though the university exceeds its own minimum. The business must have a real research role; it cannot serve only as a pass-through funding office.

Use a formal agreement that covers the scope, milestones, budget, reporting, intellectual-property allocation, and follow-on research or commercialization rights. Identify the partner’s existing patents or other rights and any licenses the business needs. Agree on publication and data-delivery conditions before the award requires a deliverable.

Check the Principal Investigator’s Agency Rules

The general STTR framework allows the principal investigator to be associated primarily with the business or the research institution, but agency rules differ. Do not assume that a university employee can lead every STTR award under the same employment arrangement.

• NIH: The PI may be employed by the small business or the partnering research institution. Check the solicitation’s appointment, effort, and collaboration requirements.
• NSF: The PI must be more than 50% employed by the small business during the project. NSF STTR also requires a co-PI leading the partner institution’s subaward. University employment alone does not satisfy NSF’s PI rule.

Resolve the employment and effort arrangement with the agency’s named contact before submission if your proposed PI cannot meet its rules.

What the Funding Covers

Phase I tests feasibility, technical merit, and commercial potential. Phase II develops the technology based on demonstrated feasibility and the agency’s entry requirements. Phase III uses private financing or other federal funds outside the STTR/SBIR set-aside for commercialization or follow-on work; it is not an automatic additional STTR grant.

Use the budget ceiling, duration, permitted costs, and phase-entry route in the actual solicitation. National ranges from an older funding year are not a reliable proposal budget. The award does not require giving the government company equity, but government licenses, invention reporting, and protected-data marking obligations still apply.

Apply and Follow the Decision

1. Select an STTR topic. Search SBIR/STTR opportunities, filter for STTR, and read the agency’s latest solicitation. A topic accepting SBIR only does not become STTR because you have a partner.
2. Screen the partners and PI. Confirm business ownership and affiliate size, research-institution type, domestic work, work shares, and the PI’s employment. Resolve required agreements and disclosure questions.
3. Register in the required systems. Check SAM registration and the Unique Entity Identifier, the SBA Company Registry, and the agency’s portal. For NSF Phase I, obtain the required Project Pitch invitation before preparing a full proposal.
4. Submit a complete joint research plan. The business submits the proposal with technical milestones, commercial case, budget and subaward justification, partner roles, agreements, disclosures, and other required attachments. Keep the agency confirmation and deadline information.
5. Follow up with the agency. Use the solicitation’s program, grants, or contracts contact for status and missing requirements. Review negotiated scope, payment conditions, reporting, and intellectual-property terms before treating a selection notice as an executed award.

If not selected, request available review feedback or a debriefing and follow any correction, resubmission, or review instructions in the notice. Separate an eligibility rejection from a project that was eligible but not competitive. Revise the actual weakness and check that a later solicitation still accepts the project.

When SBIR May Fit Better

If your business can perform the larger required share of research and does not need a mandatory institutional partnership, compare SBIR. Normally, SBIR requires the business to do at least two-thirds of Phase I research and half of Phase II research, and the PI’s primary employment is with the business.

For proposal preparation, use the Lab to Market assistance network or the issuing agency’s applicant-assistance program. Agency staff handle your application and award; SBA’s general home page is not the STTR submission system.