Startup Funding Espresso: Grants

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Equity funding is just one source of funding for your startup. There are many others such as grants.

Grants are typically provided by government organizations to spur research and make a small contribution to the business.

Commonly used grants include SBIR, Small Business Innovation Research, which provides phase 1, 2, and 3 grants that add up to $1M.

You can search for grants at www.grants.gov.

Grant funding is mostly one-time offerings and need not be paid back.

They are non-dilutive which means they don’t take any space on the cap table.

Use grants to cover costs that customers will not. For example, customers will not pay for basic research but only for finished products.

Grants often come with rules on how it can be spent.  

Be careful in spending too much time with grants. I once worked with a company that had raised over $4M from grants over a five-year period.

The team became experts at writing grant proposals but no one could sell, market, or do much of anything for a customer because for five years they focused on writing and winning government grants.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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