SBIR and STTR Critical Differences

The SBIR and STTR programs have similar objectives, but differ in two major ways related to the Program Director (PD)/Principal Investigator (PI) and non-profit research partner.

Principal Investigator

Under SBIR, the PD/PI must be primarily employed* with the small business concern at the time of award and for the duration of the project period, unless a waiver is granted by the NIH.

Under the STTR Program, primary employment is not stipulated so the PD/PI may be primarily employed* by either the small business concern or the collaborating non-profit research institution at the time of award and for the duration of the project period.

*The PD/PI’s primary employment means the organization where the PD/PI spends more than one half of their time. This precludes full-time employment with another organization.

Non-Profit Research Partner

The SBIR program permits and encourages research partnerships. However, STTR requires that the small business concern formally collaborate with a non-profit research institution. Under SBIR, the research institution can complete up to 33 percent of the total effort for a Phase I, and up to 50 percent of the total effort for Phase II.

Under STTR, the small business must perform at least 40 percent of the work and the research institution must perform at least 30 percent. The remaining 30 percent may be with the small business concern, the collaborating non-profit research institution, or additional third party/parties. 

The basis for determining the percentage of work to be performed by each of the cooperative parties will be the total of direct and F&A/indirect costs attributable to each party, unless otherwise described and justified in "Consortium/Contractual Arrangements" of the PHS398 Research Plan component of the SF424 (R&R) SBIR/STTR application forms.