The Small Business Innovation Research (SBIR) program is a highly competitive United States Government non-dilutive funding source, coordinated by the Small Business Administration. It is intended to encourage domestic small businesses to engage in high-growth research and development (R&D). Funding takes the form of contracts or grants and the awardee projects must have the potential for commercialization while meeting specific U.S. Government R&D requirements.
The SBIR program was created to support scientific excellence and technological innovation through the investment of federal research funds in critical American priorities to build a strong national economy. In the words of program founder Roland Tibbetts: “to provide funding for some of the best early-stage innovation ideas — ideas that, however promising, are still too high risk for private investors, including venture capital firms.”
For the purposes of the SBIR program, the term “small business” is defined as a for-profit business with fewer than 500 employees, owned by one or more individuals who are citizens of, or permanent resident aliens in, the United States of America. Funds are obtained by allocating a certain percentage of the total extramural (R&D) budgets of the 11 federal agencies with extramural research budgets in excess of $100 million. Approximately, $4 billion is awarded through the program each year with each agency administering its own individual program within the guidelines established by Congress.