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Our ultimate guide to startup grant funding

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💰 Grant funding: an introduction for founders

We polled our founder portfolio earlier this year, asking if they had ever applied/considered applying for grant funding. The results were overwhelming—88% had already applied, with a further 5% considering it.

There are three very common questions we get when we advise our startups, which are:

  • Are they worth it?
  • How can you write a top application?
  • Where are the best places to apply for grants?

Are they worth it? 

There is the obvious financial benefit to applying for a grant—which can often give you six figure sums (or more) of non-dilutive funding. There are a number of other key strategic benefits too.

👍 They can help you think through your value proposition. In your application, you’ll need a clear overview of the industry landscape, and you’ll have to define what sets you apart from your competitors.

👍 They can help give you direction. You’ll need to plan and articulate areas you’re going to focus on, and where you’re going to spend the money. This will aid your business plan.

👍 It can move the needle on fundraising. Investors like grant funded businesses—they’re clearly innovative and well thought out. Successful grants are an implicit seal of approval.

They don’t come without their challenges, though.

👎 They’re very time consuming, requiring at least 50 hours of a founder’s time. It sounds obvious but they’re only worth it if they’re successful: so make sure you stand a good chance.

👎 Applications are extremely rigorous, with tight sets of eligibility criteria. If you fail to meet any of these, or fall below the threshold on certain metrics, you’re likely to be rejected

👎 Grants can come with strict conditions on how and where you can spend the money. Make sure you understand these in detail before you proceed with your application

How can you write a winning application? 

If you decide it’s worth investing your time in applying, here are some tips on how to nail your application.

1. Allow plenty of time. Carve out a number of hours each week to dedicate to the grant, to ensure you aren’t falling behind.

2. Do sufficient research. Each grant/grant organisation is different, so make sure you do appropriate research into the grant organisation. This of course includes eligibility criteria: you don’t want to waste your time writing a grant that you are ineligible for. More importantly, though, identify organisations that align with your goals and mission.

3. Know your audience. Consider who is going to read your application—a mixture of independent experts, as well as board members for the organisation. Be technical while also speaking coherently and intelligibly.

4. Tell a compelling story. You’re in sales mode here. So make sure you hook them with your story. This will include giving a strong overview of the market and competitive landscape, as well as a clear hook around what differentiates your product.

5. Prove your potential impact. Grant organisations are interested in the wider impact your business will have—more than just financial traction. Be very clear about how your target audience will benefit from your product, and your ability to scale. If your product is a specific innovation, you should show your ability to turn that into a business. You can do this by showing your traction so far, as this will be a strong indicator of future success.

6. Demonstrate why you need their funding. Be as specific as possible—show exactly why you need their money, and where you’ll spend it. This is particularly important for grants that are geared towards a specific ring fenced project. For each allocation, make sure you justify why you are spending it there, and why that will have the biggest impact.

As for the final question—’Where are the best places to apply for grants?’—we’ve compiled our definitive directory of grant organisations in the UK, Europe, and beyond. You’ll find the directory in our full Guide to Small Business Grants.

 

Source: Foundersfactory

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