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Building and scaling a company is hard. Finding the funding you need at the right time is tricky too. One source of funding can come from grants. But this landscape can be challenging to navigate. That’s why we’re producing a content series solely focused on Grant Writing. And we’re starting with what you need to have in order before you write your first word.
Before You Start
To begin, it’s important to understand that grants and other forms of non-dilutive capital are designed to fund specific projects, not the company itself.
“While a typical dilutive investor frames their decision to invest around ROI, funding agencies frame their decisions around project impacts. In most cases, impacts include technology advancement, job creation, and specific metrics measured against the funding agency’s mission,” explains Funding Catalyst Lead Malcolm Eaton. “A common misconception is that grants are not a collaborative process, but in the majority of cases, agencies will work with you to align projects before a grant is submitted.”
Misalignment with the funding body is one of the most common reasons why a project does not get funded. So ensure you’re going after the right opportunities. More on how best to do this, later.
Know Your Capital Strategy
Before you even go down the road of non-dilutive capital, it’s also important to determine if this type of funding makes sense for your company and what you want to achieve at a specific time in the growth of your business.
“Review your company’s capital and business strategy and identify what you need the funding for,” advises Funding Catalyst Kristina Komarek. “For example, do you need to hire someone for a specific role, do you need some product development?”
Eligibility and Matching
Once you’ve narrowed your focus to a couple of problems you want to solve, identify grant opportunities that match. And Kristina says there are tools available, such as the Business Benefits Finder or Pocketed, to help you assess your eligibility for a grant.
"I encourage founders to go a bit deeper, dive into the program guides and reach out to the funding bodies directly to confirm eligibility.” --- Kristina Komarek, Funding Catalyst
“Those tools are a great starting point,” explains Kristina, “but I encourage founders to go a bit deeper, dive into the program guides and reach out to the funding bodies directly to confirm eligibility.”
The Data Room
It’s also important to get your data room ready before you start applying for any grants, as most applications require a set of supporting documents. So, what should be in your data room?
“Have up-to-date versions of documents pertinent to your business ready,” explains Malcolm. “Your financial statements and projections, pitch decks, hiring plans and so forth. A common supporting document that’s required, but that many companies don’t have, is a written business plan. So, be prepared to create new documents too.”
Reimbursement Ready
You should also ensure you have enough runway to cover the opportunity you’re going after. “Many founders don’t realize that most funding opportunities are based on a reimbursement model,” says Malcolm. “Founders need to know if they have the financial resources to cover a portion of project costs until the money comes in.”
“Founders need to know if they have the financial resources to cover a portion of project costs until the money comes in.” --- Malcolm Eaton, Funding Catalyst Lead
Because most opportunities don’t offer 100% project cost coverage, you should be prepared to demonstrate your financial capacity to fund anywhere between 20-75% of the total cost.
Support Options
Once all of these pieces are in place, it’s time to start the application process. This can take a lot of time, energy and expertise. You may realize you want to hire this process out on a fractional basis. There are companies that offer straight forward grant writing, others like Thin Air Labs offer strategy, consulting, grant matching, writing and more. It’s useful to have a budget dedicated to this kind of support, so you know which type of service team to engage. For example, Thin Air Labs works with founders going after grants starting at 75K.
So whether you go it alone, or get support, securing these funding opportunities can extend your runway and help get your company to the next stage of growth.
Securing this type of funding can mean even more startups and scaleups continue to #BuildWhatsNext.
