Technology Readiness Levels (TRLs): Are You at the Right Stage for Funding?

One of the top reasons startups miss out on funding is being at the wrong technology readiness level — better known as TRL. While TRLs can be confusing at first, understanding the differences between the levels and knowing where your technology fits is critical when applying for grants, investments, or government contracts.

In this guide, we’ll break down each TRL and share examples of the types of funding typically available at each stage. This way, you’ll avoid wasting time (and money) applying for opportunities you're not eligible for — and instead focus your efforts where you have the best chance of success.

TRL stands for Technology Readiness Level. It was originally developed by NASA in the 1970s to assess how close new technologies were to operational use. Since then, it’s been widely adopted across industries, including by U.S. government agencies like the Department of Defense (DoD), Department of Energy (DOE), and National Institutes of Health (NIH).

In the tech development world, understanding your TRL can help you align your project with investor and grantmaker expectations — and position yourself for the right funding opportunities.

TRLs are more than just a funding tool — they’re a common language for evaluating technology maturity, managing risk, and making go/no-go decisions on further development and commercialization.

Technology Readiness Levels range from 1 to 9, each representing a milestone in technology development:

• TRL 1: Basic principles observed and reported - an innovative idea that preliminary market research suggests could fill a market need.
  
  
• TRL 2: Your research has shown a market appetite for your innovation, so it’s time to work on your technology concept and/or application.
  
  
• TRL 3: Proof of concept demonstrated experimentally to test the feasibility of your innovation.
  
  
• TRL 4: Technology validated in a lab environment.
  
  
• TRL 5: Technology validated in a relevant (simulated) environment.
  
  
• TRL 6: Prototype demonstrated in a relevant environment with close-to-expected performance.
  
  
• TRL 7: Prototype demonstrated in an operational environment and shown to potential pre-commercial early adopters in your field.
  
  
• TRL 8: System completed and qualified through tests and demonstrations, and you’re in a position where you could start mass producing.
  
  
• TRL 9: Actual system proven through successful operations and ready to deploy at scale.
  
  

Here's a real-world breakdown with examples:

TRL 1 – Idea Stage

You have a basic scientific idea, but there has been no work carried out to test the hypothesis yet.
→ Example: A materials scientist theorizes a new compound could make batteries more efficient, but hasn’t built anything yet.

TRL 2 – Hypothesis Formed

You’ve developed a concept for how the technology could work.
→ Example: Researchers model the new battery material's potential energy storage capabilities.

TRL 3 – Proof of Concept

You have small-scale experimental evidence that the idea could work.
→ Example: Initial lab tests show the material can hold a charge.

TRL 4 – Lab Validation

You’ve built a basic prototype and tested it under controlled lab conditions.
→ Example: A small prototype battery built with the material performs well in a lab setting.

TRL 5 – Relevant Environment Testing

The technology is tested in conditions that simulate real-world use.
→ Example: The prototype battery is tested under simulated real-world charging and discharging cycles.

TRL 6 – Prototype in Relevant Environment

A full-scale prototype is tested under real-world conditions.
→ Example: The full-size battery is installed in electric vehicles for test drives.

TRL 7 – Operational Environment Testing

Your prototype operates successfully with real users in a real-world environment.
→ Example: A fleet of test electric vehicles runs on the new battery across public highways.

TRL 8 – System Complete and Qualified

The final product is fully developed, tested, and ready for commercial rollout.
→ Example: The battery passes regulatory certifications and safety inspections.

TRL 9 – Full Commercial Deployment

The technology is in full-scale production and commercially available.
→ Example: Electric vehicle manufacturers offer models featuring the new battery to the public.

‍Note: Some industries have sector-specific variations of TRLs (like Medical Device Readiness Levels for FDA-regulated products). Always check specific grant or investor guidelines.

While many agencies don’t specify TRL limits on their solicitations, and each agency may take a different stance on the TRLs they look at, here is some general guidance:

• Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Phase I programs typically target technologies currently at  TRL 1–3, though this might vary by agency.
  
  
• SBIR and STTR Phase II programs usually look for technologies at TRL 4–6.
  
  
• Defense Innovation Unit (DIU) contracts often seek TRL 6–7 technologies ready for field trials.
  
  
• Venture capital firms and private equity are usually interested once you’re closer to TRL 7–9.

Small differences between TRL stages can make or break your eligibility, so it’s crucial to assess accurately.

Here's a general guide for matching your TRL with funding types:

• TRL 1–3: Early-stage research grants (e.g. SBIR/STTR Phase I grants or contracts) from agencies like NIH or DARPA.
• TRL 4–6: Seed funding rounds, SBIR/STTR Phase II awards, Department of Energy technology grants, and certain Department of Defense innovation programs.
  
• TRL 7–9: Later-stage venture capital investment, strategic partnerships, corporate venture arms, or government procurement opportunities.

Note: The NSF recently announced that it does not have a standard TRL chart, and it doesn’t use or evaluate projects based on TRL.

When assessing your TRL and readiness for funding, ask yourself the following:

• Hypothesis and R&D Plan: Have you formulated your idea into a rigorous hypothesis and planned the project, but haven’t started working on it yet? If yes, consider early-stage grant funding on government contracts!

• Proof of Concept: Have you determined the feasibility of your innovation by determining proof-of-concept? If yes, you might still be eligible for some early-stage funding if you still have R&D to do before a prototype can be finalized.

• Technology Validation: Has your innovation been tested in a lab or real-world conditions, or do you have a functioning prototype or minimum viable product (MVP)? Consider later-stage funding options.

• Regulatory Readiness: Does your innovation meet compliance requirements for your industry? If yes, focus on later-stage funding options. 

Working out if you’re ready for funding isn’t always just about the tech! You should also determine whether you need to do further work on customer discovery, competitor analysis, and formulating a commercialization strategy.

Not quite where you need to be? Try:

• Partnering with universities or national labs to conduct additional research and validation.
  

• Applying for proof-of-concept grants like those offered by NSF's I-Corps program.
  

• Joining startup accelerators that provide technical and business mentorship.

• Securing pilot customers to test your technology in operational environments.

Understanding technology readiness levels is key to aligning your innovation with the right funding sources. By identifying where you are — and where you need to go — you can set realistic goals, target the right investors, and build momentum toward commercialization.

The right TRL, at the right time, with the right funding, is how you turn an idea into impact.