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

One of the top reasons startups are often ineligible for funding programmes is that they are at the wrong technology readiness level – also known as TRL. TRLs can be confusing; however, differentiating between all nine levels and understanding where your technology falls is crucial when applying for funding.

We’ll break down each level for you and provide examples of the funding available at each stage. This way, you won’t waste time and money on funding applications that you were never eligible for in the first place due to your TRL. Instead, you can put your efforts into the right funding opportunities with maximum chances of success.

TRL stands for Technology Readiness Level. Originally developed by NASA in the 70s and later adopted by the European Union and the UK, TRLs provide a systematic framework for assessing the maturity of a technology, from conceptualisation to full commercial deployment.

In the world of technology development, securing funding is a critical milestone. However, many innovators struggle to align their technological progress with investor expectations. This is where TRLs come into play.

Understanding TRLs can help innovators determine if they are at the right stage for funding and what steps they need to take to move forward.

In addition to being used for decisions regarding tech funding, TRL is useful for a common understanding of tech status, risk management, and making decisions surrounding the transition of technology.

TRLs range from 1 to 9*, each representing a different stage of technology development:

• TRL 1: Basic principles observed and reported.
• TRL 2: Technology concept and application formulated.
• TRL 3: Experimental proof of concept demonstrated.
• TRL 4: Technology validated in a laboratory setting.
• TRL 5: Technology validated in a relevant environment.
• TRL 6: Technology demonstrated in a relevant environment.
• TRL 7: Prototype system demonstrated in an operational environment.
• TRL 8: Technology completed and qualified through testing and demonstration.
• TRL 9: Actual system proven in an operational environment and ready for full-scale deployment.

We understand that these terms can still be confusing, so we’ve broken it down a little bit further for you and provided some examples to put it into context:

TRL 1 – Idea Stage

You have a concept but no real-world testing yet.

→ Example: A scientist thinks a new material could improve battery life but hasn’t tested it.

TRL 2 – Hypothesis Formed

You’ve outlined how the idea might work.

→ Example: Researchers create a theoretical model for how the new material could store energy.

TRL 3 – Proof of Concept

You’ve done small-scale experiments to show it might work.

→ Example: Lab tests show the material can hold a charge under controlled conditions.

TRL 4 – Lab Validation

You’ve built a small prototype and tested it in a lab setting.

→ Example: A tiny test battery is made using the material and shows promising results.

TRL 5 – Simulated Real-World Testing

You’ve tested the prototype in a setting that mimics real-world conditions.

→ Example: The test battery works under simulated charging and discharging cycles.

TRL 6 – Functional Prototype in Relevant Environment

You’ve built a full-scale prototype and tested it under real-world conditions.

→ Example: A full-size battery is installed in an electric car for controlled testing.

TRL 7 – Prototype in Operational Environment

Your technology is working in a real environment with real users.

→ Example: The battery is used in a test fleet of electric cars on the road.

‍TRL 8 – Fully Developed and Tested

The product is finalised, proven to work, and ready for commercialisation.

→ Example: The battery passes all safety tests and gets regulatory approval.

‍TRL 9 – Market-Ready Product

The technology is in full production and being used commercially.

→ Example: Automakers are selling cars with the new battery to customers.

*It’s important to note that there are some industry specific readiness levels that might be a more helpful indicator of a company's readiness level. Some grants will mention this specifically in the eligibility criteria.

“When applying for funding, you must ensure you’re at the right technology readiness level, otherwise, you won’t be eligible from the get-go.

“Some funding, like Innovate UK loans, require businesses to be at TRL5 and above, which means the prototype is ready for user testing in the intended environment. Meanwhile, for the EIC Accelerator, for example, user testing must already be evidenced – meaning businesses must be at TRL6 and above.

“In these instances, just the slight differentiation from level 5 to 6 will determine whether your project fits the bill.”

Hatti Whitman

Principal Funding Consultant at Grantify

Different funding opportunities align with various TRLs, however, you can use the following as a general guide:

TRL 1-3: Early-stage research funding from government grants, universities, and research institutions (e.g. Horizon Europe, Innovate UK, grants European Research Council, and European Space Agency grants).

TRL 4-6: Seed funding, accelerators (like the EIC Accelerator at TRL6+), loans (such as the Innovate UK Innovation Loan at TRL5+), and venture capital firms looking for promising prototypes and lab-validated technologies.

TRL 7-9: Growth-stage funding from investors, strategic partnerships, and commercial lenders for market-ready products.

To determine if you are at the right stage for funding, consider the following factors:

• Technology Validation: Have you conducted sufficient testing to prove your technology works as intended?
• Market Demand: Is there a clear demand for your technology in the market?
• Prototype Development: Do you have a working prototype or a proof of concept?
• Regulatory Compliance: Have you considered regulatory requirements for your industry?
• Investor Alignment: Are potential investors interested in funding technologies at your current TRL level?
• Commercial Viability: Do you have a clear path to commercialisation and revenue generation?

If you find gaps in any of these areas, it may be beneficial to seek additional validation, refine your business model, or engage with mentors before pursuing funding.

If you’re not yet at the right TRL for your desired funding, consider the following:

• Partner with academic institutions or research labs to further validate your concept.
• Switch your strategy and apply for grants that support technology validation and prototype development.
• Engage with industry mentors and accelerators to refine your business model.
• Seek pilot opportunities or early adopters to demonstrate feasibility.

Understanding TRLs is crucial for aligning your technology’s maturity with funding opportunities. By identifying where you stand in the TRL framework, you can strategically pursue the right funding sources and take the necessary steps to advance your innovation.