90 Small Businesses Receive State Grants to Accelerate Innovation

Addressing a well-known gap that many innovative companies face, today the North Carolina Board of Science, Technology & Innovation announced its latest round of funding to small businesses developing and commercializing new technologies in North Carolina. In fiscal year 2024-2025, 90 small businesses in 21 counties received 102 awards from the One North Carolina Small Business Program, providing $4.12 million for innovation in a variety of industries, including pharmaceuticals, energy, advanced materials, and agriculture.

“North Carolina is home to thriving, high-demand sectors, including life sciences and advanced manufacturing, that propel our economy forward,” said Governor Josh Stein. “By supporting small businesses at a critical stage of their growth, these grants help drive job creation and economic prosperity.”

The One North Carolina Small Business Program awards state-funded grants for small businesses that apply for awards from two highly competitive federal initiatives: the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The federal SBIR and STTR programs, collectively referred to as America’s Seed Fund™, are administered through 11 federal agencies to support technology development by small businesses, with the goal of commercialization and economic sustainability for the selected companies. SBIR and STTR are the single largest source of early-stage technology development funding for small businesses across the country, with nearly $4.3 billion awarded annually.

Since 2006, the One North Carolina Small Business Program has leveraged these federal awards to support North Carolina’s innovation ecosystem and help small businesses navigate the early stages of company growth. By providing this additional capital, the One North Carolina Small Business Program can improve the trajectory of small businesses and the likelihood of commercializing their innovative solutions.

The One North Carolina Small Business Program awarded two types of grants during the fiscal year 2025 funding round: Incentive and Matching.

Incentive grants support qualified North Carolina businesses as they prepare and submit an SBIR or STTR proposal to federal agencies, helping to offset some of the costs of developing these complex proposals. The state program aims to improve the quality of proposals, particularly from first-time applicants, and incentivizes broader technology and geographic diversity among North Carolina’s SBIR and STTR applicants. In North Carolina fiscal year 2025, 51 small businesses were awarded Incentive grants totaling $418,863.

If a company is successful in winning a Phase I SBIR or STTR federal award, the Matching Program supplements those federal funds. This supplemental funding helps the company navigate what’s often called the “Valley of Death” – the time from the launch of a business idea to the point that idea generates sustainable revenue. Additionally, the Matching Program helps attract small businesses to North Carolina, create jobs, and draw more investment to the state. In the most recent round of grantmaking, 51 small businesses in 14 North Carolina counties were awarded $3.69 million in Matching grants after receiving $14.2 million in federal funds.  

Among the 51 companies awarded Matching grants, 10 are located in more economically distressed Tier 1 or Tier 2 counties. The N.C. Department of Commerce uses the Tier ranking system to designate the economic well-being in each county through a county’s unemployment rate, median household income, population growth, and adjusted property tax per capita. Tier 1 represents the 40 most distressed counties, the next 40 counties make up Tier 2, and the 20 least distressed form Tier 3. By using this Tier ranking system, state programs can focus on economically advancing the lower Tier counties, in this instance through growth of small innovative businesses. Out of the 10 total awards in Tier 1 and Tier 2, three of the awards went to companies in Tier 1 counties – the most to be awarded through the Matching program in a single year.

The One North Carolina Small Business Program is administered by the North Carolina Department of Commerce on behalf of the North Carolina Board of Science, Technology & Innovation.

“At a time when other states and nations are increasing their investments in scientific discovery and technological advancement, we need to continue to develop solutions to our greatest challenges, grow our economy, and boost our competitiveness,” said Sheila Mikhail, Chair of the Board. “By awarding grants to small businesses across the state, we are investing in our greatest natural resource – our innovative human capital – to drive economic vitality and North Carolina’s leadership in the global economy.

Since 2006, the One North Carolina Small Business program has awarded a total of nearly $41 million to 510 businesses across the state. With the support of this early-stage capital, the small, innovative businesses have gone on to maintain more than 2,000 jobs and receive more than $9.6 billion in follow-on funding from other sources to support the innovation economy within North Carolina. Combined, the businesses employ more than 4,000 people, pay $600 million in total wages, and pay per-employee average wages that are twice the state average.