Why YES matters:
1. SBIR legislation requires eligible small businesses to be established as for profit enterprises. Nonprofit organizations cannot
apply for Phase I funding although nonprofit research institutions (federal labs and universities) can participate as partners with
small businesses in SBIR & STTR projects. Phase I awards are always made to the small business.
2. The Small Business Administration (SBA) defines a small business using these criteria and the agencies follow the SBA
guidelines when determining a company's eligibility for SBIR/STTR funding.
3. SBIR allows small businesses to partner with nonprofit research institutions while the STTR requires the small business to
partner. With SBIR, the small business needs to do 2/3 of the Phase I work and can outsource up to 1/3. With STTR, the small
business must do 40% of the Phase I work and the nonprofit research partner doing 30% of the work while the remaining 30%
can be allocated as the small business determines.
4. The primary employment of the PI (Principal Investigator) must be with the small business concern at the time of award and
during the conduct of the proposed project. For projects with multiple PIs, at least one must meet the primary employment
requirement. Primary employment means that more than one half of the PI's time is spent in the employ of the small business
concern. Primary employment with a small business concern precludes full-time employment at another organization.
5. While SBIR does not require a team approach, each agency receives hundreds of proposals and a team approach allows the
small business to bring in experts and consultants to develop a competitive proposal. Small businesses must strive to build an
SBIR competition team with a complete set of required capabilities to increase the chances of winning. Required skills may
include (for example) science, technology, analysis, experimental methods, marketing, commercialization, business management
(including legal and accounting), technical writing, proposal review and others. Each agency also has a unique culture and
proposal evaluation process; it is critical for the small business to understand agency difference and build their team accordingly.
6. Not all great product ideas qualify for SBIR/STTR funding. The small business needs to have a research idea with feasibility
issues. SBIR Phase I is typically a six month feasibility study while the Phase II can be for up to two years with R&D focused on
prototype development.
7. It is imperative that the small business's research idea fits within the federal agencies solicitation topics. There are eleven
federal agencies that participate in SBIR with the five largest (NIH, NSF, DOD, NASA, EPA) also participating in STTR. Each agency
releases at least one solicitation each year. Solicitations can be found at each agencies web site, at www.sbir.gov or you can
access them at www.uwyo.edu/sbir web site under participating federal agencies. Typically, agencies will only review proposals
that address an agency's solicitation topics.
8. SBIR law does not require preliminary data however, most agency reviewers expect to see preliminary data as an indicator of the
research feasibility and team's credibility.
9. ACCESS is highlighted here to show that the applicant does not need to own equipment and facilities but needs to show it has
the access which means you can rent or lease as needed. If the small businesses is planning to use space at a nonprofit research
institution, the small business should include a letter stating the access has been granted.