Also known as: Small Business Innovation Research · SBIR grant · SBIR program
A U.S. program that gives small businesses non-dilutive federal R&D funding — no equity or IP taken — to mature new technology.
The Small Business Innovation Research (SBIR) program provides "equity free funding through federal agencies to American small businesses" and offers "non-dilutive funding to develop your technology and chart a path toward commercialization." According to the cited page, it is coordinated by the U.S. Small Business Administration and funded through 11 participating federal agencies. Beyond this cited page, each participating agency administers its own SBIR program (the Department of Defense is generally one of the largest participants), and the program is typically structured in three phases: Phase I proves feasibility, Phase II funds prototype and R&D work (roughly two years), and Phase III moves the technology toward the commercial or federal market without further SBIR funds. A defining feature is that the funding is equity-free and non-dilutive — the government takes no ownership stake in the company. In industry usage, the "SBIR trap" refers to becoming dependent on a repeating cycle of small SBIR awards without ever winning production contracts or private capital.
Source: SBIR.gov (U.S. Small Business Administration)
No — SBIR is non-dilutive. The government provides R&D funding and takes 0% equity and no ownership of your IP, which is a key reason it is attractive to venture-backed startups.
It is the pattern of surviving on a repeating cycle of small SBIR awards without ever transitioning to production contracts or raising private capital — a "zombie" state that can stall a company's real growth.
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Last updated: July 2026.