Financing can be the difference between slowing organic growth and accelerating your business to success, whether it’s used to hire staff or pay for resources to drive your progress.
There is a way to get your business up and running without having to start up your own business or engage investors too early in your journey. Grants are a great way to support your business in the early stages of growth. Depending on your industry, purpose or the position of your founders, you can access many types of grants. Situations that tend to attract funding include innovation and research and development, founders with a particular background or alumni status, and companies with a social purpose.
When we started Adatree, we won a $25,000 MVP grant from the NSW Treasury and a competition from the University of Sydney’s Genesis Program, which included $25,000 in funding, expert guidance and media coverage.
Here’s how you can use grants and financing to accelerate your business.
1. Do a lot of research
Grants come from various sources. Government grants are usually accessible through specific departments – for example, if you are a technology company, you could try the Ministry of Industry, Science, Energy and Resources. However, also consider whether you can access grants in another department. If you produce agricultural technology, you can also look at the Ministry of Agriculture and Water Resources. General business grants are also available and at various levels of government; your state government and even municipalities have grant programs.
Other sources of grants include universities and other research and educational institutions, industry associations and professional associations and foundations. If you’re a tech company, I recommend getting Amazon’s AWS Activate or Microsoft for Startups, which covers your tech expenses with credits. While $3,000 or $5,000 here and there may not sound like much, it adds up and can help cut costs.
Getting yourself out is also helpful. Go to networking events, participate in pitch fests and even conferences. When we applied for the NSW MVP Grant, we met their team after seeing us pitch at a conference, so it was great to make that connection personal too.
2. Read the fine print
Before you start writing a grant application, review the eligibility criteria in detail. Grants you believe you are eligible for may have specific criteria that will disqualify you.
We looked at a female founding grant; I am a CEO and the largest shareholder of Adatree, but I was ineligible because I had male co-founders, and the grant required me to own 50 percent or more. Some grant programs, like many of the COVID programs, are only for struggling incumbent companies or nonprofits.
It’s rare to see grants-only. In addition to cash, you can also receive other in-kind support, from free desk space and access to facilities, to expert advice and mentorship, or support services that can help you run your business. So consider what would be really helpful to you before signing up.
The fine print also states what they expect in return. For example, you may be required to complete certain activities by a deadline, or it may not be a monetary grant, but compensation that requires you to keep receipts and reclaim expenses at a later date. If you don’t have appropriate cash flow, the offsetting grants may not be right for you.
3. Treat job applications like an investment
The application process requires a lot of care. Please check the submission deadline before you start to ensure you have enough time to apply and check all the information you need to provide. Some of this may be budgetary, some may be external approval, such as a letter of recommendation from an expert.
We applied for an R&D grant through AusIndustry which we found particularly complicated. It is based on hypotheses, starting with a framework and a lot of documentation.
The rules for discounts change regularly, so it’s worth hiring a consultant who is on top of that. I recommend seeking professional help in general. There are specialist grant writers you can hire, or you can get training from organizations like Grant’d, whose goal is to help you navigate these grants and applications.
4. Partners can be an asset
If you collaborate with research organizations, there are numerous grants available if you apply for a grant together that requires a company and a research organization to submit together. If you can find and collaborate with Australia’s top researchers in a specific topic or subject, you will often find that the grant organization will subsidize their involvement. That’s a huge addition to your business and really boosts your IP. An example is CSIRO Kick-Start.
As with any investment, grants take time to materialize, and sometimes they don’t pay off at all. So while you shouldn’t rely on them to run your business, they are a valuable output for a number of reasons.
First, the application process helps you define your business and refine your offering. Second, if they come through, the funds can save you from dipping into your savings for all the costs that come with starting a business. The alternative is often to seek a capital increase rather than ideal, which can dilute your company’s ownership.
If a grant can help you shape your business as early as possible, then it is well worth seeking out.
- Applications are now open for NSW Small Business Month scholarship applications, closing on August 5. Details here:†