With early stage seed funding hard to come by in Australia, funding grants play a vital role in building our startup ecosystem. Beyond cash, the right grant has the ability to connect you to strong networks and industry knowledge.
There are countless opportunities for those who have an innovative idea, product or concept, yet in many cases, startups don’t consider looking to grant funding for fear that the application process will be overwhelming, or too competitive. The benefits of a grant can far outweigh the challenges of applying, and the good news is, it’s not rocket science. Here are some tips for securing a grant for your early stage startup.
1. Get your house in order
Before you even consider applying for a grant, it’s vital to get everything in order. The more risk you can mitigate now, the better position you’ll be in long term. This means having a clear understanding of your timeline, budget and outcomes – and how they relate to any funding you receive. You also want to be able to clearly communicate who is going to execute different stages of the project, and why the team you have around you are the best people possible to help achieve your commercialisation goals.
2. Do your market research
How big is your market? Is your product truly needed? You may think that you’ve got a great concept with lots of appeal, but knowing this for a fact is crucial to establishing yourself as a worthy grant recipient. Having validated data in areas like the size of your target market, market trends, market participants, purchasing process, and a competitor analysis, all provide proof-points for those assessing grant applications (and potential investors!) and make for a healthy reality check.
3. Use of funds
Throughout the grant process, be clear about what exactly you’re planning to do with the money from the grant, and have an answer that’s more detailed than simply ‘expanding our investment in technology’. Make sure there are clear value points that will be achieved by undertaking each task or achieving each milestone in your project plan, and make sure these are fair and reasonable. Many grants are milestone based – no milestone achieved, no next tranche of funding – so it’s important to be clear in expectations and planning.
4. Independent validation of your product
Connect with your target market to establish whether or not your product is actually needed and why. Also look at what the true value proposition is, does it stack up, and if there should be changes made. A lot of people tend to go off the approval of their family, friends or colleagues, but stepping outside your comfort zone to receive honest feedback will ensure that your concept has been independently validated. Take the feedback as constructive criticism and make positive steps towards a saleable product. This is a process that should done continually.
Think to yourself, “if I had to go and sell this today, who is the first customer I would sell it to?”, then simply reach out and pitch your idea. Get a solid understanding of what these customers do and don’t like and don’t be afraid to ask what they would pay for your product or service. Lots of people will be interested in what you’re developing, but knowing what people will actually pay for it and why will help you stay focused on what you need to build out into a commercial offering.
5. Gather letters of support
Once your product has been validated, don’t be afraid to ask for a letter of support from target customers, or ask if they would be happy to be a beta customer. Nothing beats having an end-user giving you feedback from day one; this is fundamental pillar to getting it right. These letters should show how the grant will support innovations helping an organisation and industry. Make sure you ask for letters of support from people with a strong name or reputation in the industry, and that they are able to clearly address pain-points your solution is fixing. The more articulate they are on the benefits, the stronger the case you’ll be able to make in your grant application as to why you and your product are worthy recipients. .
6. Communicate, communicate, communicate
Communicate with the administrators of the grant from the outset. Understanding exactly what funding they provide, projects funded in the past, and other criteria is fundamental to making sure you are in alignment. Listen to their advice – they know the system better than you do. If you are unsure of something, always ask; never assume. Also, keep the people who provided letters of support in the loop throughout the process. Some grants can take several months to be assessed, so a regular email update is always useful.
If your application is successful, set a time with your grant manager as soon as possible to set timelines, regular meetings, contract and cash payment dates. Put this into a simple shared document like Google Sheets, and invite them all to view it. If you are unsuccessful, arrange to meet with the grant giver and run through a list of where your weak points were, and take the time to understand why you weren’t successful. If possible, fix these issues and resubmit, but keep in mind some programs only let you apply once; therefore it pays to be diligent and structured.
There’s a lot of preparation that can go into securing grant funding, but this doesn’t mean it has to be a painful process, and if anything, the collection, collation, analysis and writing down of information is useful in refining your strategy. By following these six steps, you’ll be able to submit the best application possible.
Andrew Grant is the co-founder of South Australian agtech betaworks Availer; helping to commercialise the most promising research developed in Australia to solve global industry pain-points. Andrew has spent the majority of his career working with, founding and driving early stage technology companies.
This article was first published by Dynamic Business