Written by Riccardo Covelli from YES!Delft.
With economic activity slowing down across the world amid the COVID-19 outbreak, many companies, including startups, are forced to look for new sources of revenue. One of the ways to stabilize revenues is to apply for grants available through public funding mechanisms. In fact, in early, pre-commercial phases, funding a startup with public grants can be a great way to fund your early stages without diluting your shares.
But we know that public funding can seem like a chaotic jungle. How can you orient yourself?
We asked StasburgReeve to share with us some tips and advice because every day they help startups acquire strategic funding sources. So, if you’re considering public funding for your startup, here are three tips to get you started.
- Explore your options before diluting
- Match your proposal with the call
- Write a substantial and complete proposal
Never write off subsidies before thoroughly exploring your options.
Subsidy gifts may only cover a percentage of your budget, but your financial contribution can often be done in kind; subsidy loans may seem scary in an early stage, but you are rarely personally liable—hence the term ‘soft loan.’ If you believe in your proposition, why dilute your shares against a low valuation, before you need to?
The projects you request funds for must match the call.
Sometimes, this means you are too far along with your development roadmap. This can be delicate and a source of frustration from applicants. However, it makes sense from the perspective of the government agency: there are state laws meant to prevent unfair competition due to state aid.
Make sure to check the goals of the call and make your proposal fit.
Your proposal needs to make technological, commercial, and financial sense. These elements need to come together on your strategic roadmap.
In this, do not underestimate the relevance of a good business case just because the source is a public body. Many calls want to see a return on investment, which requires a lucrative and grounded sales prognosis.
Are you interested in gaining experience with attracting investors? Visit YES!Funded website and get ready to rocket-start your ideas!