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SBIR is federal R&D funding for small companies, and it takes no equity

An agency posts a problem it needs solved, you propose how you would solve it, and if it picks you, it pays for the work.

Find my matchesScore a Phase II draft

Congress has renewed SBIR through FY2031.

$2,153,927

A standard Phase II award pays up to this, and the government takes no equity.

11 agencies are required by law to fund it

Any federal agency that spends more than $100 million a year on outside R&D must reserve 3.2% of it for small businesses.

The rest of one agency’s outside R&D budget3.2%Reserved for SBIR
  • DoDDefense
  • HHSHealth, including NIH
  • DOEEnergy
  • NASASpace
  • NSFScience
  • USDAAgriculture
  • DHSHomeland Security
  • DOTTransportation
  • DOCCommerce, including NOAA and NIST
  • EPAEnvironment
  • EDEducation

Each runs its own solicitations on its own schedule.

Who qualifies

  • A US-based for-profit business
  • 500 employees or fewer, including affiliates
  • Majority-owned by US citizens or permanent residents, or by other qualifying US small businesses
  • Your principal investigator is primarily employed by you while the award runs
  • The work happens in the United States

You do not need revenue, a finished product or past government contracts.

Companies majority-owned by venture capital firms, hedge funds or private equity are excluded at most agencies. NIH is one of the few that takes them.

Most companies start at Phase I

  1. Phase I

    6 to 12 months

    Show it can work

    A funded feasibility study that proves the concept holds up.

    Up to $323,090

  2. Phase II

    About 24 months

    Build it

    Development money to turn the proven concept into a working product.

    Up to $2,153,927

    Read the SBIR Phase II playbook

  3. Phase III

    No time limit

    Sell it

    No SBIR money. Work that came out of SBIR can be bought sole-source, without full competition.

Some agencies let you skip Phase I if you can already show the concept works. How to prove feasibility for Direct-to-Phase-II

Common questions

What is SBIR?

A federal program that awards about $4 billion a year to small businesses developing new technology. 11 agencies are required by law to set aside 3.2% of their external R&D budgets for it.

Do I have to give up equity?

No. SBIR awards are non-dilutive: no equity, no board seat, no investor. You also keep the rights to what you invent.

Can I qualify without a product or past contracts?

Yes. You need a US-based for-profit company with 500 or fewer employees, majority-owned by US citizens or permanent residents (or by other qualifying US small businesses), doing the work in the United States. Your principal investigator must be primarily employed by the company while the award runs. No revenue, product, or contract history required. Companies majority-owned by venture capital firms, hedge funds, or private equity are excluded at most agencies; NIH is one of the few that takes them.

Where do I start?

Most first-time applicants start with Phase I. Some agencies run Direct-to-Phase-II if you can already show the concept works.

Find out which agencies want what you build

Describe your product in plain English. Outrider finds the SBIR topics, grants and contracts that fit, says why, and flags what could rule you out.

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