SBIR/STTR Phases

Phase I is the proof-of-concept stage. Awards typically range from $50,000 to $275,000 over 6 to 12 months. The goal is to demonstrate the scientific and technical feasibility of your proposed innovation. Competition is intense — success rates average 15-25% depending on the agency.

Phase II is the full research and development stage. Awards range from $500,000 to $1.8 million over 24 months. Only Phase I awardees are eligible (with rare Direct-to-Phase-II exceptions). Phase II proposals must show Phase I results, a clear development plan, and a commercialization strategy.

Phase III is the commercialization stage. There is no separate SBIR/STTR funding — Phase III is about transitioning the technology into products. This can mean production contracts with the sponsoring agency, sales to other government agencies, or commercial market entry. Phase III contracts are not subject to small business size standards.

The "Valley of Death" between Phase II and Phase III is the most common failure point. Many companies successfully develop technology but struggle to navigate the transition to production contracts or commercial sales. This is where partners like Matter Labs provide critical guidance.