Grants and SBIR programs for software companies

This article is general information, not legal or financial advice. It was written on October 10, 2026, from the public pages of the programs it describes, and it does not describe any agreement with World Enterprise. Programs, limits and deadlines change, so confirm the current position with the agency and your own advisers.

Some public money for technology companies arrives as a competitive award, not as a loan and not as an investment. In the United States the best known are the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. This article describes them from the programs’ own pages: who can apply, what the phases are, what the awards are for, and what a software founder should check before spending weeks on a proposal. It does not say your company will qualify. It does not say that any program funds any particular company, including any company that works with WE.

What the programs are

The Small Business Administration coordinates the programs under the name America’s Seed Fund, and says they are funded through 11 participating federal agencies. Each participating agency administers its own SBIR/STTR program within guidelines established by Congress. That means there is no single application. There are as many programs as agencies, and each agency posts its own solicitations, the published calls that say what it will fund.

The SBA describes the funding as available without requiring a company to give up shares. The National Science Foundation says the same of its own program: it does not take shares in the company, and the founders keep control of their team, the direction of the work and their intellectual property.

Who can apply

The How to Apply page lists three eligibility tests. The company must:

• be a for-profit entity located in the U.S.;
• have fewer than 500 employees, with the page adding that most applicants have fewer than 10;
• be owned and controlled by U.S. citizens or permanent residents.

The page adds that some additional restrictions apply with venture capital ownership, and that a company needs a Unique Entity ID from SAM.gov to receive an award. A nonprofit organization cannot directly receive an award, though it can be a minority investor, subcontractor or sub-grantee on a project. The page links a full eligibility guideline that this article did not read. If you already have investors, or expect to, ask your counsel how their ownership interacts with that restriction before you apply.

The phases

The How to Apply page describes the main phases as follows.

The About page gives different figures. It says that, as of April 2026, agencies may issue a Phase I award up to $323,090 and a Phase II award up to $2,153,927 without seeking SBA approval, and that any award above those levels requires a waiver. The first set is a range on a how-to page; the second is a limit on what agencies may issue without a waiver. Neither tells you what a particular agency’s solicitation offers, so read the solicitation. The NSF page says it invests up to $2 million in seed funding.

How a research award moves through its phases. The programs are built in stages, and each stage asks a different question. The program pages state the exact terms.

1. 1

   Feasibility

   A first, smaller award tests whether the idea can work at all.

2. 2

   Development

   A second, larger award funds the research and development of a prototype.

3. 3

   Commercialization

   The company brings the result to market with other sources of support, because the program itself does not fund this stage.

What the awards are for

The awards pay for research and development. The SBIR page calls the programs an important source of early-stage technology funding for small businesses and speaks of R&D-focused entrepreneurs. The NSF page says it offers funding for early stage R&D, supports deep technologies based on discoveries in fundamental science and engineering, and considers a technology’s innovativeness, commercial potential and possible societal impact when it reviews applications. It names artificial intelligence among the areas it funds, and two of the companies it features describe software products.

So the test to apply to your own work is whether the project you would propose counts as research and development of the kind an agency’s topic asks for. The sources do not say whether routine product work counts. Read the topics each agency publishes, and ask the agency.

How an application goes

According to the How to Apply page, an application runs in five steps:

1. Agencies post solicitations. The page says to read the entire solicitation carefully, because that may prevent administrative mistakes that could disqualify a proposal.
2. You check that you meet all eligibility requirements.
3. You submit a proposal through the agency’s SBIR or STTR program before the closing date, and the page says to give yourself plenty of time to prepare it.
4. The participating agency reviews proposals. Review times vary, so check with the specific agency.
5. The agency awards funding. The page warns that an award amount may not cover all of your R&D expenses.

Previous awardees may apply for Phase I funding for new innovations and Phase II funding for continuing R&D. A proposal takes founder time, and the founder time budget of a raise is a useful way to think about what it costs you. Because review times vary and an award may not cover everything, use the metrics calculator to see how many months of cash you have while you wait.

If you are a student or part of a research team

STTR differs from SBIR in one main way: the small business must formally partner with a research institution. An STTR awardee must subcontract a portion of the award to a research institution, which the page lists as a nonprofit college or university, a domestic nonprofit scientific or research organization, or a Federally Funded R&D Center. Because the eligible applicant is a for-profit company, a student project would have to be set up as one before it applies. Ask your institution and your own lawyer how ownership of the work is handled before you do that.

The SBA also says it works with local partners that help with proposals and SAM registration, and that some states run Phase 0 programs for new applicants.

Questions to bring to your own advisers

• Which agency topic matches the work, and is a solicitation open now?
• Does my ownership, including any investors, meet the eligibility rules?
• How does the award handle intellectual property? The NSF page says founders retain it, so ask what that covers in the award terms.
• What will the award not pay for, and where does the rest come from?
• What registration and reporting does an award bring?
• Which of the questions in questions to ask your counsel before you sign apply to an award agreement?

For unfamiliar words, the glossary is the place to start.

Where this fits in a long effort

These programs are among the longest-horizon sources of public support for a small company, and a company that applies should plan for a process measured in months and years. The SBIR and STTR as patient capital article looks at the programs as a timeline and records their current status. Public counseling is also available, as the SBA resource partners article describes. These are independent public programs that WE encourages founders to consider, and no affiliation is implied.

The SBIR and STTR guide goes further on the three phases, preparing an application and the eleven agencies. If the work fits a topic, apply; SBA resource partners and university programs listed in the ecosystem directory can help a first-time applicant.

What this article cannot tell you

This article cannot tell you whether your software qualifies, what your chances are, or what any agency is funding today. It rests on three public pages, and it did not read the full eligibility guidelines, the policy directive or any solicitation. The two SBIR pages give different award figures, and this article reports both without choosing between them. It covers the federal SBIR and STTR programs only. It does not cover state grants beyond the mention of Phase 0, other federal grants, or programs outside the United States, and it says nothing about taxes or about how an award is reported. Nothing here is a recommendation of an agency, an adviser or a platform.

In the data

These figures describe U.S. businesses in general, not WE’s results. Each one names its source.

• 20.4% closed in year 1
• 29.4% closed in years 2 to 5
• 15.5% closed in years 6 to 10
• 34.7% still open at year 10

Each square is one in every hundred establishments that opened in 2015. Squares are rounded so they add to 100; the exact figures are in the table.

Show the data as a table

Of 100 establishments that opened in 2015, how many were still open at year 10

Group	Exact figure	Squares (of 100)
closed in year 1	20.4%	20
closed in years 2 to 5	29.4%	29
closed in years 6 to 10	15.5%	16
still open at year 10	34.7%	35

Source: U.S. Bureau of Labor Statistics, Business Employment Dynamics, Table 7 , Data through March 2025

Retrieved 2026-10-15. Each share is a difference between two published survival rates (all private industries); the squares are rounded to add to 100.

Sources

1. About SBIR and STTR, U.S. Small Business Administration, SBIR.gov . Accessed October 10, 2026.
2. How to Apply, U.S. Small Business Administration, SBIR.gov . Accessed October 10, 2026.
3. America's Seed Fund, NSF SBIR/STTR, U.S. National Science Foundation . Accessed October 10, 2026.

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