Innovation Matching Grants Program (NYSTAR)

About this programme

The Innovation Matching Grants Program (IMG Program) is run by Empire State Development's Division of Science, Technology, and Innovation, known as NYSTAR. It exists to grow New York small businesses and support new-technology development by matching federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards with state funds, while creating jobs and keeping New York competitive.

SBIR and STTR are highly competitive federal programmes that fund domestic small businesses doing research and development with commercialization potential. They run in three phases: Phase I ($50,000-$250,000, concept development, 6 months to 1 year), Phase II ($500,000-$1,500,000, prototype development, 2 years), and Phase III (commercialization support, no direct SBIR/STTR funding). The IMG Program matches Phase I and Phase II federal awards and offers technical assistance for Phase II and Phase III recipients.

It is strictly a matching programme: New York State only pays out once a business is actually awarded the federal SBIR/STTR grant. A business that gets an IMG Program commitment but is never awarded the federal grant receives no IMG Program funding. Applicants who secure an IMG commitment before submitting their federal application can include the state's commitment letter with that federal application, which is intended to strengthen the federal bid.

How it works

New York State matches up to $100,000 against a federal Phase I SBIR/STTR award, and up to $200,000 against a federal Phase II award. In no case can the IMG Program contribution exceed 50% of the federal award amount (a minimum 2:1 federal-to-state match).

Each company is subject to a lifetime limit of one Phase I and one Phase II IMG Program award. A business may submit only one application per round, and cannot apply again for a Phase I or Phase II award it has already received IMG matching funds against.

There is no direct monetary award for Phase III; Phase III (and Phase II) recipients instead get access to NYSTAR's technical assistance and outreach support.

Applicants can apply either before submitting their federal SBIR/STTR application (to try to secure a commitment letter to strengthen that federal bid) or after already holding a federal Phase I/II award received within the past 12 months or since the prior round closed, whichever period is shorter.

If a commitment is issued before the federal award, it is only guaranteed for twelve (12) months from the date of the IMG Program award notification -- applicants must plan their federal application timeline to land within that window.

Who can apply

Applicants must be a small business as defined by New York State Economic Development Law Section 131: resident in New York State, independently owned and operated (not dominant in its field), and employing 100 or fewer people.

The business must be actively applying for a Phase I or Phase II SBIR/STTR award from a participating federal agency, or must have received such an award since the closing date of the previous announced IMG round or within the past 12 months, whichever period is shorter.

The business must currently operate in New York. Grant recipients must remain headquartered and operate or manufacture in New York State for at least two years following successful commercialization of the funded product, or forfeit all IMG Program funds back to NYSTAR. A waiver of this clawback is available, at NYSTAR's discretion in consultation with ESD's small-business division, if the recipient ceases operations before five years.

Applications must be submitted by an individual with legal authority to enter into contracts on behalf of the business.

How to apply

1. Confirm eligibility (New York small business under Section 131, current or upcoming SBIR/STTR Phase I or II involvement, NY operations).
2. Review the current Program Guidelines, FAQ, Eligibility Template and Application Template published on the official IMG Program page.
3. Watch for a round to open: rounds open at 9:00 AM on the second Wednesday of October and April, and stay open for one week, closing the following Tuesday at 5:00 PM.
4. Submit the digital application packet during the open window, including: details of the SBIR/STTR proposal; the federal application due date (and iCorps completion date, if applicable); information about each business owner; the project's specific aims; a summary of New York State resources used or provided; a Research Strategy Summary and Commercialization Plan; and a summary of the technology's expected economic impact, alignment with New York State priorities, and why the applicant is commercializing it in New York.
5. If applying ahead of the federal submission and wanting an IMG commitment letter to strengthen that bid, apply at least three months before the intended federal application date to leave time for NYSTAR's review.
6. Respond to any NYSTAR requests for further information or clarification during review.
7. If awarded an IMG commitment before the federal award: notify NYSTAR within 45 days of receiving the federal SBIR/STTR award notification, and email a copy of the federal award letter to NYSTAR before the contract process begins. NYSTAR can rescind the commitment if this 45-day notice is missed.
8. Once a federal award is confirmed, complete a Grant Disbursement Agreement with NYSTAR; expect reporting guidelines and forms after contract execution.

Documents you’ll typically need

• Program Guidelines (current version dated 9/11/25)
• FAQ document
• Eligibility Template
• Application Template
• Details of the SBIR/STTR proposal
• Business-owner information
• Research Strategy Summary and Commercialization Plan
• Federal award letter (once received, for notification to NYSTAR)

Frequently asked

Reviewed 2026-08-16. Programmes change — confirm current eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.