SBIR and non-dilutive grants
Federal research awards in phases, with no equity taken — and why they are tracked apart from the R&D credit.
The SBIR and STTR programs are federal research funding: participating agencies award small businesses money to develop technology the agency wants, in phases, and take no equity. SBIR.gov describes it as "equity free funding". SBIR.gov states that, as of October 16, 2026, an agency may issue a Phase I award of up to $335,937 and a Phase II award of up to $2,239,578 without SBA approval. Eligibility rules — size, ownership, the research itself — are in the SBA's policy directive, linked from SBIR.gov.
SBIR / STTR
- Good at
- No dilution and no repayment
- Validates technical risk for later investors
- Phase II awards can be large
- Watch for
- Months from proposal to award
- The work must fit the agency's topic, and the reporting is real
- Not available for most software or retail businesses
- Best for
- Deep-tech, defense, health and science companies whose roadmap matches an agency topic
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Anything marked as a convention is ours, not the rule-maker's.
- Federal agency guidance
- SBIR.gov, About (opens in a new tab)SBIR and STTR: non-dilutive federal research fundingFree to read
The words this page teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.