Life Sciences Grants in California: A Founder’s Guide

Raising capital is hard. California life sciences startups have access to an incredible capital landscape, with the state leading the nation in both private venture investment and public research funding. In 2024, California’s life sciences sector attracted $19.8 billion in venture capital, representing a 31% increase over 2023 (California Life Sciences 2025 Sector Report). That doesn’t alter the fact.

Venture capital is important. It’s also competitive, dilutive, and tends to be concentrated in later-stage deals. Convertible notes and SAFEs preserve optionality but add to the cap table. For early-stage companies still building proof of concept, every equity point matters.

Grants change the equation. They are non-dilutive by definition: the government, a state agency, or a foundation provides some of the capital required for research but takes no equity, requires no repayment, or seats on the board. For a pre-seed founder with $500,000 in the bank and 18 months of runway, a well-timed Small Business Innovation Research (SBIR) grant can be the difference between focusing on a pivotal experiment or scrambling to raise funds.

California is one of the best places in the world to pursue life sciences grants. The state leads the nation in NIH funding. It has its own dedicated biomedical funding agency in CIRM. And the federal programs that fund early-stage research — SBIR, STTR, BARDA, and others — are designed precisely for the kinds of companies building here.

At California Life Sciences, we work with early-stage founders across every therapeutic area and technology platform. Grant funding comes up in nearly every conversation about runway extension and early-stage commercialization. Below is what founders in California need to know: which programs exist, what they fund, how they’re structured, and how to build a strategy that uses them well.

Why non-dilutive funding matters for life sciences founders

The life sciences development cycle is long and expensive. A single IND-enabling study can cost $1–5 million. A Phase I clinical trial can cost $3–10 million or more. Raising dilutive capital at the pre-clinical stage would set up a difficult cap table for later rounds or even compromise ownership.

Non-dilutive life sciences grants afford founders the opportunity to fund specific milestones without involving investors. Not only do grants keep the cap table clean and preserve negotiating leverage for later fundraising, receiving a grant says a lot about your science as grants require validation from peer reviewers with deep scientific expertise. That kind of third-party validation is valuable and can meaningfully improve your terms at the Series A.

What to be aware of:

Grant funding requires time and effort — applications are competitive and reviewer feedback is often not provided until after an award decision
Grant timelines are long; plan 6–12 months from application submission to first disbursement
Some grants restrict how funds can be spent (e.g., only on specific research activities, or only within your organization)
Grant funding does not replace dilutive capital, but it can address some of the early risk and make dilutive raises more favorable

SBIR and STTR: the federal flagship programs for biotech startups

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are the most widely used federal grant vehicles for life sciences founders, and for good reason. Together, they award over $4 billion annually across 11 participating federal agencies, making them by far the largest non-dilutive funding programs available to small businesses in the US.

SBIR is designed for small businesses conducting independent R&D with commercial potential. The work must be performed primarily by the applicant company.

STTR is similar in structure but requires a formal research partnership with a university or nonprofit research institution — at least 30% of the work must be performed by the partner institution. STTR is particularly well-suited for founders who spun out of academia and want to maintain an active collaboration with their lab of origin.

Both programs fund in two phases:

Phase I — proof of feasibility. Awards of up to $323,090 for a period of approximately six months.
Phase II — full R&D. Awards of up to $2,153,927 for approximately two years. Phase II awards are competitive and typically require a Phase I award first, though some agencies offer direct-to-Phase-II pathways.

For life sciences, the National Institutes of Health is the most active SBIR/STTR funder, investing over $1.4 billion annually in small business R&D through these programs. Other relevant agencies include the National Science Foundation, the Department of Defense (through CDMRP), and BARDA for companies working on medical countermeasures.

A note on SBIR/STTR authorization: The SBIR/STTR programs officially expired on September 30, 2025, which caused funding disruptions and created uncertainty for potential applicants. California Life Sciences has been vocal in advocating for reauthorization — CLS CEO Mike Guerra issued a public statement on this issue. New legislation restored the programs as of mid-April, 2026. Founders should check the current status at sbir.gov before submitting applications.

What to watch for:

Eligibility: for-profit US company, fewer than 500 employees, majority US-owned
Principal investigator must be primarily employed by the applicant company (SBIR) or can be with the research institution (STTR)
The same project cannot receive both SBIR and STTR funding simultaneously
Agencies each have their own solicitation cycles, deadlines, and topic areas — check each agency’s portal directly

NIH grants: direct federal funding for life sciences research

NIH is the largest funder of biomedical and life sciences research in the world, and California is its top-funded state at $5.2 billion annually. For founders working at the intersection of basic research and commercial development, NIH’s portfolio of funding mechanisms extends well beyond SBIR and STTR.

The two most relevant NIH grant mechanisms for early-stage companies are:

R21 (Exploratory/Developmental Research): A two-year grant supporting exploratory and developmental research. R21s are generally smaller (up to $275,000 over two years) and are designed to test high-risk, novel ideas that lack the preliminary data typically needed for a larger R01. For founders who came out of academia, R21s can fund early feasibility work before SBIR becomes the right vehicle.

R01 (Research Project Grant): NIH’s flagship investigator-initiated grant. R01s are typically held by academic researchers but are available to company-based scientists with strong publication and collaboration records. Budgets vary but can reach $500,000 per year or more for up to five years.

NIH also runs the SEED program (Strengthening Emerging Enterprises and Development), which provides educational resources and support specifically for small businesses pursuing SBIR and STTR funding. SEED resources are free and help founders navigate the application process, agency-specific requirements, and commercialization planning.

What to do:

Review NIH’s SEED portal before submitting your first SBIR/STTR application — the agency-specific guidance offered there is unmatched
Work with your institution’s sponsored research office if you have a university partner for an STTR application
Check NIH’s current funding opportunity announcements (FOAs) at grants.nih.gov for program-specific requirements and deadlines

CIRM: California’s dedicated life sciences grant source

The California Institute for Regenerative Medicine (CIRM) is a significant and underutilized grant source for California life sciences founders. Created by California voters in 2004 and funded with $8.5 billion over its history, CIRM is a state agency dedicated to accelerating stem cell, gene therapy, and regenerative medicine innovations from discovery to clinical application.

CIRM is not just for academic institutions. The agency actively funds companies across five program areas:

Discovery Research — early-stage basic and translational science
Translational Research — advancing discoveries toward clinical-stage milestones
Clinical Research — supporting clinical trials for regenerative medicine therapies
Infrastructure — facilities, GMP manufacturing, and clinical trial networks
Education — training programs for the regenerative medicine workforce

Eligibility: Applicants must have a clear California connection. Specifically, more than 50% of employees must be located in California, and the funded activities must be conducted in California (with limited exceptions). Companies do not need to be headquartered in California to qualify, but they must operate here in a meaningful way.

CIRM’s focus is specific; it funds regenerative medicine, stem cell, and gene therapy. If your company is working in these areas and based in California, CIRM belongs near the top of your grant strategy. Founders working in oncology, rare disease, neurological conditions, and immunology will find the most relevant funding opportunities here.

What to do:

Review CIRM’s current funding opportunities — solicitations open and close on a rolling basis
Contact CIRM’s grants management team early; the agency is known for being accessible to applicants, especially companies
If you are in a FAST California cohort or have a CLS relationship, ask your advisor network whether any CIRM alumni are available for informational conversations about the application process

Additional California and federal programs to know

Beyond SBIR, STTR, NIH, and CIRM, a number of additional programs are relevant to California life sciences founders depending on therapeutic area, technology platform, and stage of development.

CalSEED CalSEED (California Sustainable Energy Entrepreneur Development) is primarily focused on clean energy, but its model — Concept Awards up to $200,000 and Prototype Awards up to $500,000 — reflects a broader California philosophy around supporting early-stage innovation through non-dilutive state grants. Life sciences founders in energy-adjacent areas (medical devices with low-power requirements, sustainable lab infrastructure, digital health platforms) may find eligibility worth exploring.

California Grants Portal The California Grants Portal (grants.ca.gov) is a state-managed database of all competitive and first-come grant and loan opportunities offered by California state agencies. It is searchable by applicant type and topic area. Life sciences founders should run periodic searches here for science, technology, and R&D categories.

BARDA (Biomedical Advanced Research and Development Authority) BARDA funds the development of medical countermeasures — vaccines, therapeutics, diagnostics, and devices — for public health threats including pandemic preparedness and chemical, biological, radiological, and nuclear (CBRN) defense. If your company’s technology has a public health or national security application, BARDA contracts and grants can be substantial. Awards are milestone-driven and can reach into the tens of millions for late-stage development.

ARPA-H (Advanced Research Projects Agency for Health) Established by Congress in 2022, ARPA-H funds high-risk, high-reward research in health and biomedical innovation — particularly projects too ambitious or speculative for traditional NIH review. ARPA-H is still in early stages but is increasingly active. Companies with bold, platform-level innovations should monitor ARPA-H funding announcements at arpa-h.gov.

CDMRP (Congressionally Directed Medical Research Programs) The Department of Defense’s CDMRP funds disease-specific research through programs like the Breast Cancer Research Program, Prostate Cancer Research Program, and Peer Reviewed Medical Research Program. California companies in oncology, rare disease, and neuroscience have successfully used CDMRP awards to fund preclinical and early clinical work. CDMRP funding cycles are annual and announced at cdmrp.health.mil.

What to watch for:

Federal programs other than SBIR/STTR often require a strong existing publication record or institutional partner — assess fit carefully before investing application time
State programs like the California Grants Portal have narrower windows and smaller award sizes but lower competition
BARDA and ARPA-H are not traditional grants; they often use Other Transaction Authority (OTA) agreements with different compliance requirements than standard federal grants

Building your grant strategy

Founders may apply for grants opportunistically, hearing about a program, submitting an application, and moving on. A more strategic approach to life sciences grants — mapping development milestones to specific funding opportunities, sequencing applications to maximize total non-dilutive capital, and treating grant funding as a deliberate part of the financing plan — will invariably lead to better results.

Consider this life sciences grant strategy framework:

Start with your milestone map. What are the three to five scientific or regulatory milestones that would most de-risk your company and increase its value? These are the milestones that belong in grant applications. Grant reviewers fund science, not business plans. A life sciences grant application needs to describe meaningful research with clear outcomes to be successful.

Match milestones to programs. Each milestone maps to one or more grant programs. Proof-of-concept feasibility data maps well to SBIR Phase I or NIH R21. IND-enabling toxicology maps to SBIR Phase II. Platform validation in regenerative medicine maps to CIRM translational funding. A simple grid with milestones on one axis and programs on the other makes it clear which grants to apply for, and when.

Layer your sources. Federal and state programs are not mutually exclusive. A California life sciences founder might hold an NIH SBIR Phase I, a CIRM Discovery award, and a California Grants Portal award simultaneously, each funding a different workstream. Stacking non-dilutive capital across programs is not just allowed, it’s expected.

Consider the timelines. The average time from application submission to first disbursement is around 6–12 months for federal programs and can be shorter for state grants. Factor this into your runway planning to avoid a cash crunch.

Get help. SBIR and STTR applications are long, technically demanding, and reviewer feedback is limited. Working with a grants consultant or a Small Business Development Center (SBDC) that specializes in SBIR can significantly improve your success rate. Several California-based SBDCs offer free or low-cost SBIR readiness programs.

Use your CLS network. California Life Sciences connects founders with advisors, mentors, and peers who have been through this process. FAST California alumni have collectively navigated SBIR, CIRM, BARDA, and NIH awards — their experience is directly accessible through the program and the broader CLS community. The CLS Startup Resource Guide includes funding resources compiled for exactly this stage of the journey.

What to do:

Start your grant calendar now and identify one federal program and one California program to target in the next 12 months
Register on SAM.gov and grants.gov if you haven’t already (required for federal grant applications)
Explore the FAST California program if you are an early-stage founder. FAST is no-cost, equity-free, and specifically designed to help founders navigate these decisions

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