Are there any grants for start up companies?
There are very few grants available for start up companies. Most of the grants that we work with require:
- around $1 million in revenue and be profitable in the past year.
- a track record of relevant experience applicable to be the grant being sought.
This rules out many start up companies. If you are a new business, a highly recommended alternative is to enter a business plan competition to help refine the concept. There are between $30,000 – $100,000 in prizes to be won in most competitions. We have entered and won a business plan competition to launch a previous start up business.
While there may not be grants for your business there often grants for your customers to assist with the purchase of your services/equipment.
How to win Government Grants?
For those of you wishing to tackle the Government Grant application yourselves, I have prepared a few hints to keep you on track. Most competitive government grant applications follow a question and answer template.
- Answer the Question – sounds pretty simple but it is often hard to do when you are caught up in the project. Most people are too close to their projects and find it hard to do the ‘elevator pitch’ to strangers. When you think you have answered a question – give it to someone else to read and get them to give you feedback.
- Keep it simple - Your answers should be as brief as possible but still get the point across. Resist the urge to describe every intricate detail of your project.
- Use pictures – most often, grant applications have a word limit but it does not apply to diagrams. A diagram allows the ready to get a better understanding of your project. Once again though, give the diagram to someone else and have them explain what they think it means. If they cant work it out, neither can the grant assessor.
- Best team – grants are competitive and the assessor will be looking for a team that has a track record in delivering (ideally) the same results previously. So your past experience must reflect as close as possible the skills that the grant is looking for. This may include commercialisation experience, technology experience or R&D experience. The assessor will not always give it to the best “sounding” project but the least risky project. So you have to make it easy for them and demonstrate that the risk involved in investing in your team is minimal.
- Dollar for dollar – most competitive grants require matched funding (cash or inkind) to support your share of the project. This is generally a black or white question, either you have financing or you dont. If you say “you can get it” then dont bother applying. If you are a start up business then you will need to show money in the bank, line of credit or a loan agreement. If you are an existing business and plan to use cash flow to support your project then then you will need to 3 years of good financial results (Balance sheet and Profit and loss). This in itself is good but does not guarantee success. To really demonstrate that you have the cash, you will need to provide a forecast cash flow analysis