NIH Small Business Transition Grant for New Entrepreneurs (PAR-27-039 / PAR-27-040): SBIR and STTR Funding for First-Time PIs

The NIH Small Business Transition Grant for New Entrepreneurs funds small businesses that put a first-time Principal Investigator in charge of a research project, then pays for that person's mentorship and entrepreneurial training alongside the R&D. NIH and CDC have announced it is returning for fiscal year 2027 as PAR-27-039 (SBIR) and PAR-27-040 (STTR), and both versions will allow clinical trials.

Deadline: NIH expects to post the full solicitation around November 5, 2026, with applications due around January 5, 2027. These dates are NIH estimates, and applications are not being accepted yet, so now is the time to line up your PI and mentor.

Why This Opportunity Matters

Most SBIR and STTR reviewers want to see a PI with a track record of leading funded research. That puts many startups in a bind when their best technical person is a recent PhD, postdoc, clinician, or engineer who has never been an independent PI. This program flips that around: it is reserved for first-time PIs and rewards companies that commit to developing them.

It also pays for things a standard SBIR award usually does not emphasize, including the PI's salary, entrepreneurship courses, and a structured mentoring team. For a founder hiring their first scientist, or a company promoting an internal researcher, it can fund the R&D and the leadership development at the same time.

Key Facts at a Glance

• Sponsors: National Institutes of Health (NIH) and Centers for Disease Control and Prevention (CDC), with many participating Institutes and Centers
• Solicitations: PAR-27-039 (SBIR, R43/R44) and PAR-27-040 (STTR, R41/R42), both Clinical Trial Optional
• Status: Forecasted. NIH is not accepting applications yet
• Estimated posting date: November 5, 2026
• Estimated application due date: January 5, 2027
• Estimated award start: July 1, 2027
• Award types: Phase I and Fast-Track (CDC does not support Fast-Track). Direct to Phase II was not allowed in the prior cycle
• Award size: Not yet published. In the prior cycle, Phase I awards normally could not exceed $306,872 and Phase II $2,045,816 in total costs, with some Institutes allowing more on approved topics
• Cost share: Not required

What the Program Funds

Each award supports three things at once:

• Research and development: A Phase I feasibility project, or a Fast-Track project, that fits the mission of one of the participating Institutes or Centers and has clear commercial potential.
• Mentorship: At least one mentor with real entrepreneurial and mentoring experience must be on the team with measurable committed effort. The mentor can be a company founder or executive, but does not have to be.
• Entrepreneurial training: A career development plan for the PI built from courses, workshops, NIH entrepreneurship programs, or similar training.

In the prior cycle, every aim needed quantitative milestones for both the research and the PI's entrepreneurial development. Participating Institutes ranged from NHLBI, NIA, NIDDK, NIDA, NICHD, NEI, NHGRI, NIEHS and NLM to NCATS, NCCIH and CDC's NIOSH, so the program covers devices, diagnostics, digital health, data science, therapeutics, and occupational safety technologies. Some Institutes funded Phase I only.

Is Your Company a Fit?

This program is a strong fit if most of these are true:

• You are a U.S. small business with 500 or fewer employees that meets SBA ownership rules for SBIR or STTR.
• Your proposed PI has never been an independent PI on an NIH or CDC research grant, or a comparable peer-reviewed research grant elsewhere.
• Your PI is a U.S. citizen or lawful permanent resident.
• Your PI has real research or technology development experience but limited entrepreneurial or independent leadership experience. Recent PhDs, postdocs, clinicians, engineers, and public health practitioners are typical.
• You can name a mentor with entrepreneurial experience who will commit measurable time to the project.
• Your technology fits the mission of at least one participating Institute or Center.

The program is not meant for experienced PIs or seasoned founders, who are steered to the standard NIH SBIR and STTR parent solicitations instead. Foreign organizations cannot apply.

How to Prepare Now

1. Pick your PI. Confirm they have never led an NIH or CDC research grant and meet the citizenship requirement. They can be a new hire or an existing employee stepping into a real leadership role.
2. Recruit your mentor. NIH is giving advance notice specifically so companies can line up industry mentors and training resources. Secure a commitment letter early.
3. Choose the right Institute. Match your project to a participating Institute or Center and contact its program officer before you write.
4. Get registered. SAM.gov, the SBA Company Registry, Grants.gov, and eRA Commons accounts for the company and the PI can take six weeks or more.
5. Watch for the November posting. When PAR-27-039 and PAR-27-040 are published, confirm the final due date, budget limits, and participating Institutes before you finalize your application.

How BW&CO Helps

BW&CO helps life science and health technology startups decide whether the Transition Grant or a standard NIH SBIR or STTR application is the better path, pick the right Institute, and build the mentorship and career development plan reviewers expect. We start early so your team is ready the day the solicitation posts. With $350M+ in non-dilutive funding secured for our clients, we help first-time founders and first-time PIs compete for NIH funding.

Frequently Asked Questions

What is the NIH Small Business Transition Grant for New Entrepreneurs?

It is an NIH and CDC SBIR and STTR program that funds small businesses led on a project by a first-time PI, combining research and development funding with mentorship and entrepreneurial training for that PI.

When is the deadline?

NIH estimates the solicitation will post around November 5, 2026, with applications due around January 5, 2027. Applications are not being accepted yet, and dates may change when the final solicitation is published.

Who can be the PI?

Someone who has never been an independent PI on an NIH or CDC research grant, or a comparable peer-reviewed research grant, and who is a U.S. citizen or lawful permanent resident. Early-career scientists, engineers, clinicians, and public health professionals are the intended applicants.

Is a mentor required?

Yes. Key personnel must include a mentor with entrepreneurial experience who commits measurable effort to the project.

How much funding is available?

NIH has not published amounts for the new cycle. In the prior cycle, Phase I awards normally could not exceed $306,872 in total costs and Phase II awards $2,045,816, with some Institutes allowing more for approved topics.

What happened to the previous version of this program?

The prior solicitations (PAR-24-131 through PAR-24-134) expired early on November 17, 2025, when SBIR and STTR authority lapsed. NIH has forecast the program's return as PAR-27-039 and PAR-27-040.