SBIR and STTR for defense founders: how the phases actually work
Phase I, II, and III mechanics, open versus conventional topics, how AFWERX and SpaceWERX style pipelines run, and an honest look at timelines.
Updated Jul 17, 2026Defense & Space
On this page
- The three phases
- Phase I: feasibility
- Phase II: development
- Phase III: commercialization
- Open topics versus conventional topics
- How AFWERX and SpaceWERX style pipelines run
- Defense and space programs in the directory
- FAQ
- Does taking SBIR or STTR money dilute my company?
- Do I need a Phase I award before I can get Phase II?
- What is the difference between SBIR and STTR again?
For defense and space founders, SBIR and STTRUS federal programs that fund small-company R&D with non-dilutive awards in phases. are often the first real money, and it is non-dilutiveMoney that does not take equity, such as grants, prizes, or credits. Your ownership is untouched., so it does not touch your cap table. The programs are powerful and slow, generous and bureaucratic. This guide explains the phases, the two kinds of topics, and how the well-known pipelines run, without pretending the timelines are faster than they are.
The three phases
SBIR and STTR both run in phases. STTR works the same way but additionally requires you to partner with a research institution such as a university or federal lab.
Phase I: feasibility
A small award to prove your idea is technically feasible. Think of it as being paid to write a serious answer to a narrow question, over a few months. It is the audition, not the run.
Phase II: development
A much larger award to build and mature the technology, usually over a couple of years. Most of the real money and real work lives here. You generally need a Phase I result, or a direct-to-Phase-II path where it exists, to get here.
Phase III: commercialization
The phase that uses non-program money. The government does not fund Phase III through SBIR itself. Instead, Phase III is the transition to a real contract or a commercial customer, funded from other budgets. This is where the earlier work is supposed to pay off.
These are illustrative ranges to show the shape of the funnel, not any specific program's current numbers. Actual amounts and durations are set by each agency's solicitation and change over time, so always read the live solicitation.
| Phase | What it funds | Rough shape |
|---|---|---|
| Phase I | Feasibility study | Tens of thousands to low six figures, over roughly 6 months |
| Phase II | Prototype and development | High six figures to low seven figures, over roughly 2 years |
| Phase III | Transition to a real contract | Funded outside SBIR, size depends on the customer |
The takeaway is the ratio, not the digits. Phase I is small and short. Phase II is where the weight is. Phase III is where it either becomes a business or does not.
Open topics versus conventional topics
There are two ways a solicitation frames the problem.
- A conventional topic is a specific problem the government has written down. You propose a solution to their stated need. Fit is narrow, and your proposal is judged against how well it answers that exact ask.
- An open topic lets you bring the problem. You propose both the need and your solution, and argue that a part of the government would want it. Fit is broader, but you carry the burden of showing there is a real customer.
Open topics widened the door for dual-use startups, because a company built for a commercial market can enter without contorting itself to a pre-written requirement.
How AFWERX and SpaceWERX style pipelines run
Organizations like AFWERX and SpaceWERX run SBIR and STTR solicitations with a startup-facing front door: open calls, pitch events, and a path toward follow-on work. Mechanically, the flow looks like this.
- A solicitation opens for a window. You submit a proposal against it.
- Selected teams receive a Phase I award and do the feasibility work.
- Strong Phase I results can compete for Phase II, sometimes with matching funds from a government customer who wants the capability.
- If a real user adopts it, the work transitions toward Phase III and a contract of record.
Defense and space programs in the directory
These are the verified defense and space programs we currently list. Terms, windows, and confidence badges are live, and each links to its full page.
Showing 11 of 11 programs
| Check size | Equity | Terms | Format | Next window | Signal | |||
|---|---|---|---|---|---|---|---|---|
| AFWERX SBIR/STTR Open Topicdual-use defense technology (Air Force) | Phase I: up to $75,000 (SBIR) / $110,000 (STTR); Phase II: up to $2,000,000; Direct-to-Phase-II: up to $1,250,000 | Not publishedNot an equity accelerator: a non-dilutive SBIR/STTR contract funding pipeline ('front door to the Department of the Air Force'). Phase I is a 3-month feasibility contract; Phase II requires a signed Customer Memorandum from an Air Force end user. Equity_pct null because government contracts take no equity. City/state null: AFWERX operates hubs in multiple locations and proposals are submitted online via DSIP. | Non-dilutive | Not published | Remote | Sep 23, 2026 | Aug 26, 2026 | Verified |
| Army xTech Prize CompetitionsArmy technology (prize competitions) | Not publishedNon-dilutive prize competition series: Phase 1 white paper, Phase 2 pitch or demonstration events, with cash prizes plus potential follow-on Army contracts (incl. SBIR pathways), mentorship and networking. Prize pools vary per competition. xTech Apex Intercept (low-cost interceptors) offers up to $8,000,000 total: up to 30 Phase 1 finalists at $25,000 each and up to 18 Phase 2 winners sharing $7.25M across four topic areas (per the Apex Intercept competition page, July 2026). Eligibility spans small, medium and large businesses from the US and allied countries. | Not publishedNon-dilutive prize competition series: Phase 1 white paper, Phase 2 pitch or demonstration events, with cash prizes plus potential follow-on Army contracts (incl. SBIR pathways), mentorship and networking. Prize pools vary per competition. xTech Apex Intercept (low-cost interceptors) offers up to $8,000,000 total: up to 30 Phase 1 finalists at $25,000 each and up to 18 Phase 2 winners sharing $7.25M across four topic areas (per the Apex Intercept competition page, July 2026). Eligibility spans small, medium and large businesses from the US and allied countries. | Non-dilutive | Not published | Remote | None confirmed | Jul 22, 2026 | Verified |
| Capital Factory (Defense)dual-use defense tech (Texas) | Not publishedTexas startup hub and venture firm with defense as one of its four stated technology frontiers (Space, Energy, Bio, Defense); defense portfolio includes Saronic Technologies, X-Bow Systems, Red 6, Allen Control Systems, and Apptronik. Startups engage via the Texas Fund (first-check cash investments, 'pitch us, no warm intro needed') and the All Access membership, not a fixed-terms cohort, so amounts and equity are null (not published). The 'Center for Defense Innovation' branding is historical and does not appear on the current homepage or Government and Defense page; the defense practice itself is primary-verified via capitalfactory.com/government. | Not publishedTexas startup hub and venture firm with defense as one of its four stated technology frontiers (Space, Energy, Bio, Defense); defense portfolio includes Saronic Technologies, X-Bow Systems, Red 6, Allen Control Systems, and Apptronik. Startups engage via the Texas Fund (first-check cash investments, 'pitch us, no warm intro needed') and the All Access membership, not a fixed-terms cohort, so amounts and equity are null (not published). The 'Center for Defense Innovation' branding is historical and does not appear on the current homepage or Government and Defense page; the defense practice itself is primary-verified via capitalfactory.com/government. | Mixed | TX | Hybrid | None confirmed | Jul 22, 2026 | Verified |
| Catalyst Accelerator (Catalyst Space Accelerator)space and national-security tech for U.S. Space Force | Not publishedDefense customer-discovery accelerator connecting startups with DoD/Space Force stakeholders (Space Delta 7 AI/ML 'CAAMO' cohort and BMC3I TAP Lab Cohort 4 running Spring 2026); 6-week Stage 1 cohort experience. The site does not publish stipend/investment figures or equity terms, so those are null; historically cohorts have been non-dilutive with no equity taken. No next application deadline was posted as of 2026-07-21. | Not publishedDefense customer-discovery accelerator connecting startups with DoD/Space Force stakeholders (Space Delta 7 AI/ML 'CAAMO' cohort and BMC3I TAP Lab Cohort 4 running Spring 2026); 6-week Stage 1 cohort experience. The site does not publish stipend/investment figures or equity terms, so those are null; historically cohorts have been non-dilutive with no equity taken. No next application deadline was posted as of 2026-07-21. | Non-dilutive | CO | Hybrid | None confirmed | Jul 22, 2026 | Verified |
| FedTech (Startup Studios & Accelerators)deep tech from federal labs / defense | Not publishedRuns startup studios (pairing entrepreneurs with federal-lab technologies), accelerators for scaling startups, internal-innovation cohorts, and SBIR/STTR/TABA consulting. Its website does not publish equity/fee/stipend terms, program locations or 2026 deadlines, so those fields are null and terms_model is 'mixed' (varies by sponsor and program; many cohorts are government/corporate-sponsored). City/state null because HQ location is not stated on the fetched pages (operates DC-area/national programs). | Not publishedRuns startup studios (pairing entrepreneurs with federal-lab technologies), accelerators for scaling startups, internal-innovation cohorts, and SBIR/STTR/TABA consulting. Its website does not publish equity/fee/stipend terms, program locations or 2026 deadlines, so those fields are null and terms_model is 'mixed' (varies by sponsor and program; many cohorts are government/corporate-sponsored). City/state null because HQ location is not stated on the fetched pages (operates DC-area/national programs). | Mixed | Not published | Hybrid | Sep 13, 2026 | Jul 22, 2026 | Verified |
| Hyperspace Challengespace technology for USSF/AFRL | Not publishedGovernment-customer discovery accelerator, not an investment program: 2025 Fall Challenge page states 'There is NO promise of funding of any sort as a result of participating.' Selected companies receive 6-10 hours of 1:1 consulting plus access to government customers; earlier editions (e.g., 2021) offered up to $100k in cash prizes. Investment/equity null accordingly. 2025 cycle: applications closed 2025-09-16, Accelerator Week 2025-11-05/06. No 2026 cycle announced yet as of 2026-07-21, so next_deadline null. | Not publishedGovernment-customer discovery accelerator, not an investment program: 2025 Fall Challenge page states 'There is NO promise of funding of any sort as a result of participating.' Selected companies receive 6-10 hours of 1:1 consulting plus access to government customers; earlier editions (e.g., 2021) offered up to $100k in cash prizes. Investment/equity null accordingly. 2025 cycle: applications closed 2025-09-16, Accelerator Week 2025-11-05/06. No 2026 cycle announced yet as of 2026-07-21, so next_deadline null. | Non-dilutive | NM | Hybrid | None confirmed | Jul 22, 2026 | Verified |
| NSIN (National Security Innovation Network)national security venture/talent programs | Not publishedDoD program office (formerly MD5) under DIU running collaboration and acceleration programs (Hacking for Defense, boot camps, venture programs) with non-dilutive support. No investment amounts published. Current programming could not be verified: nsin.mil homepage carried no program or deadline content when fetched, and no cohort announcements post-DIU restructuring (2024) were found, so status is marked possibly_inactive pending confirmation. | Not publishedDoD program office (formerly MD5) under DIU running collaboration and acceleration programs (Hacking for Defense, boot camps, venture programs) with non-dilutive support. No investment amounts published. Current programming could not be verified: nsin.mil homepage carried no program or deadline content when fetched, and no cohort announcements post-DIU restructuring (2024) were found, so status is marked possibly_inactive pending confirmation. | Non-dilutive | VA | Hybrid | None confirmed | Jul 22, 2026 | Secondary sourcePossibly dormantWe could not confirm a recent or upcoming cohort. It may have paused or wound down. Verify before applying. |
| SOFWERXspecial operations technology | Not publishedNot a cohort accelerator: an innovation platform connecting companies to USSOCOM via Tech Tuesday pitch slots, assessment/technical experimentation events, tech sprints, RFIs, and SBIR opportunities that can lead to government contracts. No equity taken and no fixed award amount, hence nulls. Site listed multiple SBIR/event deadlines July-September 2026 but no single program deadline date was extractable, so next_deadline is null. | Not publishedNot a cohort accelerator: an innovation platform connecting companies to USSOCOM via Tech Tuesday pitch slots, assessment/technical experimentation events, tech sprints, RFIs, and SBIR opportunities that can lead to government contracts. No equity taken and no fixed award amount, hence nulls. Site listed multiple SBIR/event deadlines July-September 2026 but no single program deadline date was extractable, so next_deadline is null. | Non-dilutive | FL | Hybrid | None confirmed | Jul 22, 2026 | Verified |
| SpaceWERX (SBIR/STTR, STRATFI/TACFI, Accelerate)space technology for the U.S. Space Force | Phase I: $75K-$180K; Phase II (incl. D2P2): $1.25M-$1.8M; TACFI: $375K-$2M; STRATFI: $3M-$15M (per SpaceWERX Get Funded page, July 2026) | Not publishedInnovation arm of the U.S. Space Force; funds companies through non-dilutive SBIR/STTR contracts (Spark, Vector, Accelerate pathways incl. cohorts and STRATFI/TACFI scale-up funding). Award amounts were not stated on the fetched page, so investment_amount is null; equity null because contracts take no equity. Space PY26.2 TACFI accepts submissions on a rolling basis. | Non-dilutive | Not published | Remote | Sep 23, 2026 | Aug 26, 2026 | Verified |
| Starburst Aerospace Acceleratoraerospace and defense | Not publishedRuns 20+ partner accelerator programs worldwide (US programs include ICDA in San Marcos TX, Starburst National Landing Launchpad in Virginia, the NASA Space Health Accelerator, SEISMIC MSI Defense Tech Accelerator, and SCALE in Los Angeles with UCLA) alongside a venture investment arm and consulting business. Terms vary by program and are mostly unpublished, so amounts and equity are null; the SCALE FAQ is the exception, stating the program is completely free with no cash or equity charge (federally funded, 13 weeks, two cohorts per year planned, pre-seed and seed, TRL 3+, Southern California presence required). SCALE's apply page still shows Spring 2023 Cohort 5 as the last cohort with applications closed. No 2026 US application deadlines were published as of 2026-07-22. | Not publishedRuns 20+ partner accelerator programs worldwide (US programs include ICDA in San Marcos TX, Starburst National Landing Launchpad in Virginia, the NASA Space Health Accelerator, SEISMIC MSI Defense Tech Accelerator, and SCALE in Los Angeles with UCLA) alongside a venture investment arm and consulting business. Terms vary by program and are mostly unpublished, so amounts and equity are null; the SCALE FAQ is the exception, stating the program is completely free with no cash or equity charge (federally funded, 13 weeks, two cohorts per year planned, pre-seed and seed, TRL 3+, Southern California presence required). SCALE's apply page still shows Spring 2023 Cohort 5 as the last cohort with applications closed. No 2026 US application deadlines were published as of 2026-07-22. | Mixed | CA | Hybrid | None confirmed | Jul 22, 2026 | Verified |
| Techstars Space Acceleratorspace technology | $220,000 total: $20,000 via convertible equity agreement plus $200,000 uncapped MFN SAFE | 5% | Equity for cash | CA | In person | None confirmed | Jul 22, 2026 | Verified |
Live from the directory. See the full Defense & Space listing.
FAQ
Does taking SBIR or STTR money dilute my company?
No. Both are non-dilutive, so they do not take equity. The cost is in reporting, compliance, and the calendar, not ownership.
Do I need a Phase I award before I can get Phase II?
Usually yes, though some agencies offer a direct-to-Phase-II route for technologies that can show prior maturity. Read the specific solicitation, because the rules differ by agency.
What is the difference between SBIR and STTR again?
They are structured the same way in phases. STTR additionally requires a formal partnership with a research institution and sets a minimum share of the work for that partner.
This is general education, not legal or investment advice. Read the actual documents and talk to a lawyer before you sign.
Programs mentioned in this guide
Get Defense & Space deadline alerts
One digest a week. Deadline alerts only for verticals you pick. Unsubscribe anytime.