The Small Business Innovation Research program is an exciting and competitive opportunity for US-owned and operated small businesses to participate in federal research and development with a goal of commercialization. Winning an SBIR award can increase the value of your business in the long run. It also allows you to maintain complete autonomy of your business through non-dilutive funding, unlike venture funding. However, there are some eligibility criteria that an organization must meet before applying for an SBIR award.

To make sure your company meets the right criteria for a grant, it is helpful to work with a highly experienced and knowledgeable grant-writing partner like Grant Engine. It’s up to each applicant or potential applicant to ensure that their organization is eligible before going ahead with a proposal. A partner like Grant Engine undertakes an exhaustive, rigorous process to confirm eligibility and help deliver a winning application. This all starts with your preliminary information.


SBIR Award Criteria for Companies

There are a few basic eligibility criteria that a company must meet before applying for SBIR funding:

  • Companies applying for SBIR funding must have fewer than 500 employees, together with its affiliates.
  • The organization must have a majority control of equity by one or more citizens or permanent residents of the US, be a for-profit small business concern owned and controlled by citizens or permanent residents, or a combination of both. Multiple venture capital operating companies, hedge funds, private equity firms, or a combination of those are allowable so long as one firm does not control or own more than half of the equity.
  • All SBIR money must be spent in the US, as the program is designed to stimulate the country’s innovation and economy.
Collaborating research institutions are considered subcontractors to small businesses and cannot apply as applicants to SBIR programs. Small Business Technology Transfer (STTR) funding is available to applicants who wish to formally collaborate with a non-profit research institution, as this is a requirement under that program’s rules.

SBIR Award Criteria for Principal Investigators

The Principal Investigator is a designated individual outlined in the SBIR proposal. This person takes overall responsibility for the project and must be primarily employed by the applying business during the award period. This means they must be working for the SBIR recipient more than half of the time, without full-time employment elsewhere. SBIR Principal Investigators do not have to be US citizens but must legally reside in the US through the duration of the project.

For NIH SBIR proposals, there can be multiple Principal Investigators involved if that project requires this type of team approach. Each must be registered with NIH, and each must have a role set out in a leadership plan. However, only the Contact PI must meet the above criteria.

Each agency has its own requirements for PIs, some on top of these basic stipulations, that set out how many hours the PI must spend with the SBIR project or similar criteria. As we will get into next, it’s important to know the eligibility requirements of each funding opportunity as it comes, even if you have worked with that agency in the past.


SBIR Award Eligibility by Program

SBIR eligibility is slightly different for the Department of Defense SBIR program, and other non-NIH programs. Here are some examples:

  • Department of Defense: DOD eligibility requires a company to be a small business at 500 or fewer employees, independently owned and operated and organized for profit. It must be a US-based business, at least 51 percent owned by US citizens or lawfully admitted permanent residents. The work must be done in the US, as well. The project’s principal investigator must be employed by the proposing organization more than half of the time, and a minimum of two-thirds of the research work must be done in Phase I, with one-half in Phase II.
  • National Science Foundation: For NSF eligibility, the PI must follow similar guidelines as outlined above. The Principal Investigator does not have to have any graduate experience or a graduate degree and can be employed by a college or university. In some cases, however, a PI’s employment with a college or university may conflict with the requirement that the PI on an SBIR/STTR award be more than 50% employed by the applying small business. This is something to watch out for!
  • Centers for Disease Control: CDC eligibility requires that in addition to being performed in the U.S., at least two thirds of the research efforts for SBIR Phase I must be performed by the company applying for the funding. For SBIR Phase II, the organization must perform a minimum of one-half of the research effort themselves.


If you are considering applying for SBIR funding from the DOD, NSF, CDC, or another organization, it’s important to understand the eligibility criteria before moving forward.  NIH suggests potential SBIR applicants get in touch with a program officer at the institute or center related to the research topic at hand. Program officers are subject matter experts who can work with you to ensure your topic is relevant and offer information about your application.

You can also get help in this regard from Grant Engine. Our team are experts in securing SBIR grants for small businesses. With our carefully honed grant writing process, you can rely on our assistance throughout your SBIR proposal preparation and beyond. Call Grant Engine at 650-937-9164, email, or contact us online!