Technology Readiness Levels, Gap Funds and SBIR/STTR: What Each Stage Needs

Researchers often describe a technology by how far along the science is. Funders and licensees ask a second question: how far along is the market side?

Both questions matter, and they are not the same. A technology can be far along technically and still be early commercially. This article explains the technology readiness scale, how it pairs with a market check, and how early funding options such as proof-of-concept funds and SBIR and STTR fit in. It is general information, not legal advice or a funding promise.

This article is educational, not legal advice, and not a promise of funding. Program rules change. Check each funder's current guidelines and ask your institution's technology transfer office.

Key takeaway: Technology readiness levels describe how mature the technology is, from basic research to proven operation. They do not show whether buyers want it. Pair the technical stage with a market stage, and read each early funding program's own rules before you plan around it.

What is a technology readiness level?

A technology readiness level, or TRL, is a nine-point scale for how mature a technology is. Level 1 is the lowest and level 9 the highest. NASA publishes a description of the scale on its technology readiness levels page. See technology readiness level in the glossary.

In general terms, as NASA describes it:

• Early levels: scientific research is beginning, and basic principles are studied with possible practical applications identified.
• Middle levels: active research and design begin, with analytical and laboratory studies. A proof-of-concept model is often built. Later, multiple component pieces are tested together, then tested more rigorously in environments as close to realistic as possible.
• Top levels: the technology is proven in real operation. NASA's wording for the upper levels is written for spaceflight, so read it as a general pattern: idea, lab test, prototype, proven in real conditions.

Other organizations may define their own versions of the scale. When someone asks for your TRL, ask which version they mean.

What is market readiness, and how does it pair with TRL?

This part is InventMentors' own framing, not an official scale. TRL tells you how mature the technology is. A market stage tells you how much you know about the buyer. You can be high on one and low on the other.

One way to check the market stage is to use the four checks from our tooling article:

1. Demand. Evidence that strangers want it. See Demand Signal.
2. Buyer. One specific, reachable buyer. See Customer Pain Statement.
3. Price. A price that works for you and for a partner.
4. Difference. A clear reason to choose it over what exists.

A mature technology with no answers to those four is not ready for a licensing push. An early technology with strong answers may attract interest sooner than you expect. Neither is a prediction of success.

What is proof-of-concept funding?

Proof-of-concept funding, sometimes called gap funding, is small, milestone-based support that some universities and regions offer to help show that an invention works and has commercial promise. See proof-of-concept funding.

One published example: the University of Nebraska-Lincoln's Innovation Advancement Fund is described as a proof-of-concept funding program for its researchers, offering milestone-driven funding to reduce technical risk, increase commercial readiness, and position innovations for licensing, startup formation, industry partnerships, or additional investment (see the NUtech Ventures page).

Other programs have different rules, sizes, and eligibility. Some are open only to researchers at the institution that runs them. Do not assume a fund exists for you. Ask your technology transfer office what is available, and read each fund's current guidelines.

What is the difference between SBIR and STTR?

SBIR and STTR are federal programs, often grouped as "America's Seed Fund." SBIR.gov describes them as awarding non-dilutive funding to develop your technology and chart a path toward commercialization, coordinated by the Small Business Administration and funded through participating federal agencies (see SBIR.gov). See SBIR and STTR.

The University of North Carolina's sponsored programs office summarizes how they work for researchers: both programs have three phases, from feasibility and proof of concept, to research and development, to commercialization; only small businesses are eligible to apply as the prime recipient; and STTR involves a partnership between the small business and a research institution, with an intellectual property agreement set at the time of award (see UNC OSP).

In plain terms: SBIR does not require a research partner, STTR does, and a university does not apply on its own. A researcher who wants this money often needs a company, which raises conflict-of-interest and ownership questions. Ask your technology transfer office before you do anything. Exact rules, award sizes, and open solicitations are set by each agency and change over time. Check the agency's current solicitation.

Are SBIR and STTR still running?

At the time of this update, yes. The authority for both programs lapsed for about six months and was restored. A law-firm summary reports that Congress reauthorized them on April 13, 2026, extending the programs through September 30, 2031 (see Crowell & Moring), and the White House announced the signing of the bill, S. 3971 (see the White House statement).

Agencies restarted at different speeds, so check SBIR.gov and the specific agency to see what is open. Do not rely on older articles written before the lapse or the reauthorization.

How should you sequence the next steps?

1. Disclose to your institution. See the disclosure and timing article.
2. Confirm ownership. See who owns a university invention.
3. Check the market side. Run the four checks and talk to buyers. See market validation for university technologies.
4. Match the funding to the stage. A proof-of-concept fund, SBIR or STTR, a license, or a startup each fit different stages. Read each program's rules.
5. Decide the path. Before you pay license fees, use the checklist in how to license technology from a university.

Frequently asked questions

What is a technology readiness level?
A technology readiness level, or TRL, is a nine-point scale for how mature a technology is. Low levels cover basic research and concepts. Middle levels cover lab proof of concept and prototypes. High levels cover demonstration in real operating conditions. NASA publishes a widely cited version, and other organizations may use their own.

What is proof-of-concept or gap funding?
It is small, milestone-based funding some universities and regions offer to show an invention works and has commercial promise, such as prototypes or technical tests. Size, rules and eligibility vary by program, so read each fund's current guidelines. Ask your technology transfer office what is available at your institution before you plan around it.

What is the difference between SBIR and STTR?
Both are federal programs that fund small-business research and development in phases. STTR requires a formal partnership between the small business and a research institution, such as a university. SBIR does not require a partner. Check the agency's current solicitation for exact rules, award sizes and deadlines before you apply.

Are SBIR and STTR still running?
At the time of this update, yes. Authorization lapsed for about six months, and Congress reauthorized both programs on April 13, 2026, through September 30, 2031. Agencies restarted solicitations at different speeds, so check SBIR.gov and the specific agency for what is open now. Rules and dates can change again.

Next steps: know your stage on both scales

Take the free Validation Assessment to see your market-side stage, or book a Strategy Session to plan what to learn next. The university technology validation page explains how this fits with your institution's office and your attorney.

Educational only, not legal advice and not a promise of funding. Program rules and amounts change.

Sources and Further Reading

● NASA, Technology Readiness Levels
● SBIR.gov, About SBIR and STTR
● UNC Office of Sponsored Programs, SBIR and STTR Programs
● Crowell & Moring, SBIR/STTR Programs Reauthorized After Six-Month Lapse
● NUtech Ventures, Innovation Advancement Fund

Invent Mentors helps inventors with market validation and commercialization strategy, not legal advice. For patent questions, consult a registered patent attorney or patent agent.