For businesses in the early startup phase, non-dilutive funding can provide critical cash infusions without giving up ownership. Non-dilutive funds are any capital sources that don’t require an exchange of shares and come from grants, contracts, tax credit programs, pitch competition winnings, or loans. One of the best sources of such funds for startups come from the government, and these can offer vital cashflow for your business as well as excellent marketing and traction, acting as a springboard to further opportunities.
Here are four key strategies to successfully pursue non-dilutive government funds for your business:
1. Learn the System
There are many government non-dilutive funding opportunities available for high-tech innovators and startups. For example, while SBIR and STTR grants are usually first on entrepreneurs’ radars, these are capped at just $400,000 each for Phase I grants. Meanwhile, program announcements, broad agency announcements, contracts and consortium funding streams total anywhere from $500,000 to $10 million or more, with an average award of $1 million to $2 million per recipient.
Some opportunities are announced by the Department of Defense (DoD), NationalScience Foundation and NIH throughout the year at specific times, while other broad agency announcements are open on a rolling basis, like those available through the DoD and Biomedical Advanced Research and Development Authority(BARDA). You can track opportunities through www.grants.gov and each government resource’s own website, but curated grant-tracking reports will save significant valuable time. G2G’s monthly Government BioscienceGrants (GBG) Report helps shortcut the decision-making process and provides all-in-one access to information including timing, criteria, deadlines and award amount. G2G creates tailored reports for specific innovations, industries and non-profits as well.
2. Build Key Relationships
Once you’ve found your government resource, determined that your capabilities seem to fit and found opportunities you want to pursue, reach out to program managers to learn the unwritten insights you’ll want to know before applying.Regardless of which agency they represent -- but most especially those at theDoD and the Defense Advanced Research Projects Agency (DARPA) -- these key contacts are willing to offer personalized advice before you submit. Their input can be critical to assessing if you truly are a match, as well as tips to use key words that resonate, assess what funding level you should request, and generally how to position your application for the best review and maximize your effectiveness in the process overall.
3. Follow the Guidance
When applying for funding, it is essential you read the full description of the opportunity and use key words in your application. You also want to apply what you learned from talking to program manager(s) to ensure the right keywords and themes are included. Equally important is following the directions carefully when it comes to required length, font and sections of your submission. Use charts and graphs as much as possible. Fewer words and more images are usually preferred by reviewers. In addition, if there is a webinar for the opportunity, be sure to listen in and apply the tips shared to your efforts. G2G offers monthly discussion of key opportunities in the GBG Report on the third Friday of the month at 10am and other webinars to provide insights into non-dilutive funding, so check back on our events page regularly.
4. Meet the Deadlines
Always apply early. Expect you will have Wi-Fi problems and that cutting-and-pasting into online forms will take twice as long as you expect. Weeks before the due date, ensure you have your DUNS and CAGE numbers and your online and your eBRAP account set up.Collect the necessary information from collaborators and/or co-PIs long before you need to compile it all into one application. Plan ahead to ensure success.Government deadlines are set in stone.
Be sure to pursue non-dilutive funding when working to access capital by learning the government system for funding, building key relationships with agency decision-makers, listening and following their guidance, and meeting the grant deadlines.