For many technology and science-based startups—especially in sectors such as biotech, medtech, or deep tech—access to funding is one of the biggest challenges. In this context, the SBIR (Small Business Innovation Research) program has become one of the most important sources of non-dilutive funding in the United States.
But what exactly is SBIR and how does it work? At Arco Grants, we break it down for you in this article.
What is the SBIR program?
The SBIR (Small Business Innovation Research) program is a U.S. government initiative designed to fund research and development (R&D) carried out by small businesses with high innovation potential.
Its goal is clear: to support innovative technologies developed by startups without requiring private investment.
Unlike venture capital, SBIR provides non-dilutive funding, meaning companies do not have to give up equity in exchange for the capital received.
Related reading: What is non-dilutive funding and how can startups access it?
Who funds SBIR?
The SBIR program is not managed by a single organization, but by multiple federal agencies, including:
- National Science Foundation (NSF)
- National Institutes of Health (NIH)
- Department of Defense (DOD)
- Department of Energy (DOE)
Each agency publishes its own funding calls based on its scientific and technological priorities.
SBIR program phases
The SBIR program is structured into three main phases:
Phase I: Feasibility study
This stage evaluates whether the idea is technically feasible. It typically provides initial funding to support proof-of-concept work.
Phase II: Project development
If Phase I is successful, the startup may receive larger funding to further develop the technology and move closer to commercialization.
Phase III: Commercialization
At this stage, there is no direct SBIR funding. However, it supports market entry and helps companies connect with investors or secure government and commercial contracts.
Who is eligible for SBIR?
Not all companies can apply. The main eligibility requirements include:
- Being a legally established business in the United States
- Being majority-owned by U.S. citizens or permanent residents
- Having a strong focus on scientific or technological innovation
- Having the resources and capability to conduct R&D activities
This program is primarily aimed at early-stage startups working on disruptive technologies.
Why is SBIR important for startups?
SBIR is one of the most attractive funding sources for tech startups because it:
- Does not require founders to give up equity
- Provides significant early-stage funding
- Allows technology validation without immediate market pressure
- Increases credibility with future investors
- Expands opportunities to secure public and commercial contracts
For many deep tech startups, SBIR is not just funding—it is a form of validation for the project itself.
The SBIR program is a key pillar of the innovation ecosystem in the United States. However, its complexity and competitiveness mean that many startups either fail to take advantage of it or apply inefficiently.
Understanding how it works is the first step toward accessing one of the most important sources of non-dilutive funding available today.
Want to access SBIR funding for your startup?
At Arco Grants, we help innovative startups identify SBIR opportunities, prepare competitive applications, and maximize their chances of securing non-dilutive funding in the United States.
Visit our website to discover how we can help you turn your innovation into real funding.