Using SBIR & STTR Grants to Fund Your Startup

Turning research into real-world innovation with I-Corp, SBIR, and STTR programs.

Federal commercialization grants are among the most powerful funding tools available for innovators. They offer non-dilutive capital (money you don’t have to give equity for), and they can turn university research or early-stage technology into a scalable business.

In this post, Summit Venture Studio (SVS) Managing Partner Taylor Bench explains how programs like NSF I-Corps, SBIR, and STTR help innovators bridge the gap between lab discovery and market impact, and how SVS partners with researchers and founders nationwide to accelerate that journey.

The Power of Federal Commercialization Grants

University labs across the country are brimming with innovative research. But without the right support, much of that potential never reaches society. Summit Venture Studio (SVS) aims to change this by partnering with universities and hospitals nationwide to turn academic IP into real-world products.

A key part of this process is tapping into federal commercialization grants like NSF I-Corps, SBIR, and STTR.

SBIR (Small Business Innovation Research)

STTR (Small Business Technology Transfer)

NSF I-Corps (Innovation Corps)

Federal innovation grants provide critical non-dilutive funding to help researchers and startups bridge the gap from concept to market.

SVS ensures that our portfolio companies leverage these opportunities. In fact, every SVS startup is built around university-developed technology and uses federal research grants as fuel for development.

You can see how we evaluate and spin out these innovations in our guide, Turning Research Into Startups: The Entrepreneur’s Guide to University Tech Transfer.

What are SBIR & STTR Grants?

SBIR & STTR grants are federal commercialization programs that provide non-dilutive funding to help small businesses and university innovators develop research into market-ready products. 

They fund early-stage R&D, prototyping, and validation, without taking equity, through agencies like NSF, NIH, and NASA.

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I-Corps: A Customer Discovery Bootcamp

I-Corps is a National Science Foundation program designed to train researchers in entrepreneurship. Rather than a research grant for R&D, it’s a $50,000 grant for intensive customer discovery and market research. 

Over a 6-8 week program, academic teams (often a professor, a student, and a mentor) interview dozens of potential customers and refine their commercialization strategy.

“I-Corps doesn’t just educate. It directly increases the odds that a lab innovation will become a viable startup.”

-Taylor Bench

Since 2011, NSF I-Corps has trained over 5,700 individuals from 1,280 organizations, leading to more than 1,000 startups and $760 million in follow-on funding.

Participating in I-Corps can significantly boost your chances in later grant applications. I-Corps alumni who apply for SBIR funding have roughly a 50% success rate (about triple the usual odds).

SBIR: America’s Seed Fund

Often called “America’s Seed Fund,” the SBIR  (Small Business Innovation Research) program is the flagship source of early-stage innovation funding in the United States. 

Eleven federal agencies – including NSF, NIH, DoD, DOE, and NASA – award SBIR grants to high-risk, high-impact projects aligned with their missions

Crucially, this funding is equity-free – the government takes no ownership of your company or IP.

Each year, SBIR and STTR together invest, on average, about $4 billion into innovative ventures across 4,000 companies.

Funding is awarded in stages:

• Phase I: $50K-$300K for feasibility and proof of concept (6-12 months).
• Phase II: $750K-$2.1 million for prototypes and further R&D (~2 years).
• Phase IIB or Phase III: Commercialization through private investment or government contracts (no direct SBIR funding).

Since its inception in 1982, SBIR has helped tens of thousands of innovations reach the market without taking a single share of equity. But competition is fierce. Only about 1 in 7 SBIR proposals are funded. So a clear commercialization plan and a capable team are essential.

STTR: Bridging Academia and Industry

The STTR (Small Business Technology Transfer) program mirrors SBIR but requires collaboration with a nonprofit research institution, such as a university. This structure ensures university-developed innovations are jointly advanced by both the startup and the research lab.

STTR grant awards are generally similar in size to SBIR (Phase I and II dollar ranges) and often run in parallel solicitations.

Unlike the SBIR, at least 30% of the work must be performed by the academic partner, making STTR a powerful tool for transitioning inventions from the lab to the marketplace. 

Both SBIR and STTR share the mission of bridging innovation and real-world impact, channeling billions into small firms every year. And any company from any state can apply.

Quantifying the Opportunity

Consider the scale:

• $4 billion+ in SBIR/STTR funding is awarded annually across agencies in sectors from biotech to aerospace.
• Phase I grants (say $200K) fund critical proof-of-concept work.
• Phase II grants (often ~$1 M) can fuel product development and technology development. 
• I-Corps alumni have launched 1,000+ startups that raised $760 M+ in follow-on funding.
• I-Corps training boosts SBIR success rates to ~50% (vs 15-20% without it).

For university researchers or entrepreneurs, these numbers underscore one fact: Significant federal funding exists to move your innovation from lab to market – if you know how to navigate the system.

7 Tips to Increase Your Chances of Winning SBIR & STTR Grants

1. Start with Customer Discovery. Understand market needs early, before you even write a grant proposal. Evidence of market validation (interview insights, letters from potential users, prior I-Corps participation) strengthens proposals. In fact, grant reviewers look for “validation signals” such as letters of intent or prior small grants as signs that your idea has traction.

For more on assessing early opportunities, see our post on How to Evaluate University IP for Startup Potential.

2. Engage Early with Program Managers. Each agency has topic managers or program directors. Reach out to them well before the deadline (1-2 months prior). A brief email or call to discuss your idea can yield invaluable guidance. They can help you understand whether your project fits their priorities and tailor your proposal to what the agency really wants. 

3. Tailor Proposals to Each Agency. SBIR/STTR is not a one-size-fits-all grant. Each agency has its own mission and solicitation topics (NIH ≠ NASA). Read the specific solicitation carefully, then use the agency’s keywords in your proposal. Be sure to address how your tech will solve their stated problem or need.

4. Build a Strong, Balanced Team. Remember that these grants evaluate the team’s capability as well as the idea. Reviewers want to see that you have technical expertise and business/industry expertise. If you’re a scientist, consider adding an entrepreneurial lead or industry mentor (I-Corps style) to your team who can handle the market side. Likewise, if you’re a small startup, partnering with a university lab (for STTR or even informally) can add research depth. A diverse team gives funders confidence that you can execute on both R&D and commercialization.

5. Plan Milestones and Budget Realistically. In Phase I, focus on proving the core feasibility. Don’t promise a full product. In Phase II, lay out a credible plan with key technical milestones (prototype, pilot studies, etc.) and some business milestones (like securing a beta customer or strategic partner). Be specific and realistic with the timeline. Also, use the allowed budget fully but wisely. Allocate funds to cover technical work, customer testing, and even commercialization planning. (Note: Don’t include sales/marketing expenses in an SBIR budget – those aren’t allowable. Instead, budget customer discovery and market research as part of R&D in Phase I/II.) 

6. Leverage Available Resources. Many states offer SBIR support programs (SBIR accelerators, workshops, or the SBA’s FAST assistance centers) that can review your proposal or provide matching funds. Take advantage of these. Additionally, read successful grant examples if you can find them, and ask mentors who have won SBIRs to critique your application.

7. Highlight Commercial Impact. Even though these are “research” grants, the end goal is a product or service that benefits society (and, for mission agencies like DoD or NASA, benefits the agency). Clearly articulate who the customer is and why they care. If you have any preliminary market traction (like a letter of interest from a potential customer or a provisional license from your university), mention it. Show that you’re not just doing cool science for its own sake; you’re building something people need. Grant reviewers reward clear evidence of real-world benefit and customer demand.

How SVS Accelerates Grant-Funded Startups

Even with funding in hand, moving from research prototype to revenue-generating product is challenging. That’s where Summit Venture Studio’s Discover – Develop – Deploy model comes in. SVS specializes in taking the output of grant-funded research (prototypes, algorithms, early software) and rapidly developing it into a market-ready solution, all while building a startup around it.

SVS acts as a force multiplier for grant-funded innovations. We take the foundational work enabled by programs like I-Corps and SBIR and build on it to create a scalable business. Our model de-risks the commercialization process for all parties: researchers see their ideas realized in the market, the government’s grant money translates into tangible outcomes (jobs, products, societal benefits), and investors get companies that are already validated and customer-ready.

“When you combine the right funding – I-Corps, SBIR, STTR – with the right venture-building expertise, the odds of success increase dramatically.”

-Taylor Bench

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Bringing More Research to Market

The combination of federal grant programs and the venture studio model is unlocking unprecedented opportunities for academic entrepreneurship. Billions in grant funding are available to support early development of breakthrough ideas. And Summit Venture Studio provides the commercialization engine to ensure those ideas don’t remain stuck in the lab. 

As a researcher or startup founder, you no longer have to choose between staying in academia with limited avenues to market or spinning your wheels trying to be an entrepreneur alone. SVS offers a third path: partner with us, leverage the non-dilutive funding that’s out there, and co-create a startup with an experienced team behind you. 

If you’re a university innovator or a grant awardee looking to maximize the impact of your work, consider reaching out to Summit Venture Studio. We’re here to help, no matter where you are located, and we speak the language of both academia and business. Together, we can tap into the best grant resources in the nation and turn genius IP into real companies that change the world.

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