Small Business Technology Transfer (STTR)

The Small Business Technology Transfer (STTR) program is a companion program to SBIR that requires each award-winning small business to formally partner with a nonprofit research institution, such as a university, federally funded R&D center, or nonprofit research organization, to jointly conduct the funded R&D.

What is the Small Business Technology Transfer Program?

STTR was created by the Small Business Technology Transfer Act of 1992 to bridge the gap between basic research conducted at universities and commercialization by the private sector. Five federal agencies participate in STTR, DoD, NIH, NSF, NASA, and DOE, and are required to set aside a minimum of 0.45% (increasing to 0.6% by FY2026) of their extramural R&D budgets for STTR awards.

The fundamental difference between STTR and SBIR is the partnership requirement. In STTR, the small business must subcontract at least 30% of the Phase I award and at least 30% of the Phase II award to a single qualifying research institution. The principal investigator can be employed by either the small business or the research institution, unlike SBIR, which requires the PI to be primarily employed by the small business.

This arrangement enables small businesses to access university research capabilities, laboratory equipment, and scientific expertise that they could not afford independently. In return, the research institution gains a commercialization partner and a pathway to translate its discoveries into products and services.

STTR award sizes mirror SBIR: Phase I awards typically range from $150,000 to $300,000, and Phase II awards range up to $1-2 million depending on the agency.

Why STTR matters for government contractors

For technology startups without in-house R&D infrastructure, STTR provides access to university lab facilities and faculty expertise while retaining IP rights and the primary commercial opportunity. STTR is particularly valuable for companies spinning out of university research or for entrepreneurs who have identified promising academic technologies ready for commercialization.

Example

A two-person startup founded by a university professor licenses a novel materials science discovery from the university and applies for an NSF STTR Phase I award. The application designates the university as the mandatory research institution partner (which will receive 35% of the Phase I budget) and the startup as the prime awardee (retaining 65%). The university's lab facilities and graduate students support the technical work while the startup's team focuses on commercialization planning and application development.

Frequently Asked Questions

What is the main difference between SBIR and STTR?

SBIR does not require a university or nonprofit partner; the small business may optionally subcontract up to 33% of Phase I and 50% of Phase II to outside organizations. STTR requires a formal partnership with a qualifying research institution receiving at least 30% of the award.

Who can be the principal investigator on an STTR award?

Unlike SBIR, STTR does not require the PI to be primarily employed by the small business. The PI may be employed by the research institution partner, making STTR ideal for scenarios where a university professor leads the research while a small business handles commercialization.

Can a company win both SBIR and STTR awards simultaneously?

Yes. Separate SBIR and STTR programs run in parallel at each agency, and a company may hold awards under both programs concurrently, provided they involve distinct projects and meet all eligibility requirements for each program.

Does the research institution own IP developed under STTR?

IP ownership in STTR must be addressed in the teaming agreement between the small business and the research institution before the award. Bayh-Dole Act protections give both parties certain IP rights, but the practical ownership and licensing arrangement is negotiated privately. Ambiguity on IP is the most common source of STTR partnership disputes.