If you have had the experience of writing a grant proposal, you have probably noticed that the knowledge, materials, and connections gained in the process have had significant benefits for your company beyond the funding opportunity alone. With each additional grant proposal submitted, the understanding of how to present crucial information concerning why, how, and what your company does is refined. You will start familiarizing yourself with different gaps in your technology and target market, which will eventually ensure better preparations and standing in the journey for private equity fundraising.
Overall, the process of applying for numerous grants strengthens the company’s business tools set and brings added value to your positioning, uniqueness, and competitive advantage. In this blog post, I am laying down some of the advantages gained in this process:
- At the point where your product or service reaches Technology Readiness Level (TRL) 3-6, it is crucial to clearly communicate the technology and innovation created inside the walls of the company to external investors. This is especially true for companies that make their first steps out on the market or companies that are more “technology providers” than solution providers and need to build a convincing business plan. By answering the grant proposal’s diverse questions, you will be able to better facilitate the way you present your novel technology to potential stakeholders.
- With each funded project, the company’s offering evolves, is better established, and sheds light on new potential paths of R&D. Most of the time funding bodies are prepared to give grants to high-risk projects that private investors are reluctant to invest in. By embellishing your offering’s capabilities and characteristics, your company will be more confidently regarded by possible investors.
- Each grant enables the company to embark on projects that would not be funded otherwise, enhancing its offering’s technological capabilities. Some companies prefer developing low-risk or slow-progressing projects that are necessary to keep the company afloat. However, with project-based funding, which is the grant, you are granted the opportunity to initiate “high-risk” projects you wouldn’t do otherwise. These projects can enrich your offering, whether by the implementation of new use cases or technological capabilities.
- In addition, the funding body evaluators are meticulous, encouraging you to check and double-check any gaps left in your technology to award you the prestigious grant. In a way, you are receiving not only the funding but also quality control on the designed project and developments before they even start.
- With each grant, you can gain new insights into how you analyze your market and refine existing assumptions and conclusions. To successfully address the proposal’s exigencies, you are required to build upon your offering’s Unique Selling Proposition (USP), which consists of the distinctive features that set it apart from competitors in the eyes of consumers. It is generally accepted that a well-constructed USP stems from the client’s need/problem. Encountering different questions concerning this point helps you to better articulate your unique USP.
- Building on your USP, you will be required to eloquently describe your target market. Some of the existing grant applications include a substantial part (sometimes the largest segment of the proposal) revolving around the company’s potential customers or users, commercialization strategy, and competitive advantage. There are countless ways to analyze and describe each topic, and the funding body would expect to see your perspective on what market you are aiming for. You can be expected to provide TAM, SAM, SOM Analysis, SWOT Analysis, and mostly free text descriptions delving deep into your targeted market. As a consultant at Argentum, I came across various companies that had a good understanding of their target market and by encountering different grants they managed to refine and improve that understanding.
- Grants usually focus on novel technologies and solutions that will have an impact on our world, and this section of the proposal is aimed at you to elaborate on your contribution. One of the more common ways the funding body examines your impact is by understanding your alignment with the UN Sustainable Development Goals (SDGs). By elaborating on your contribution to the SDGs, you directly improve your chances of receiving the grant and indirectly gain the experience of further facilitating your positioning with current impact-related expectations in the market. Apart from the SDGs, adjusting your UVP’s impact to different market trends and policies strengthens your positioning in the market, which in turn makes your company more attractive to potential investors.
Strategic Dimensions: Beyond Funding
- Having to prioritize the best project for your company’s grant application contributes to refining the company’s business roadmap to success. Since acquiring a grant is conditioned on a well-structured and conceptualized project, you get to really ponder about your business from every angle. Every time you write a grant you are getting the opportunity to truly think a project through and plan it outside the scope of the company’s orderly activities, which seldom happen otherwise.
- Each grant application gets a review from people with various backgrounds, including VCs, while some evaluation processes include a pitch, Q&A and sometimes the company even gets business coaching. The evaluation results often help focus your attention on missing details and unrefined fields that call for better groundwork. By addressing the issues that arose in the feedback received, you will be better prepared for your future fundraising endeavours. Understandably, the more grants you submit the more feedback and practice you will get presenting your company and projects. This is one of the best practices for various evaluation scenarios such as pitching to potential investors.
- Applying for a grant, aside from being a strategic means for fundraising, can help formulate new connections through collaborative projects. Many grants offer the opportunity to consolidate a consortium comprising at least 2 partners. These collaborations enable you to bring into reality more ambitious, far-reaching, and disruptive projects. The connections made through this kind of collaborative work can be long-lasting relationships that can manifest themselves into future partnerships.
- Gathering of substantial number of texts, pitch decks and even videos. Most grants require you to upload materials other than the written proposal itself. Applying for the EIC Accelerator grant for example calls for a short pitch deck and video for the first step of the application process, and various annexes for the following step such as financial information, Freedom To Operate (FTO) Analysis, data management plan, and Letters of Intent (LoIs). Some proposals can equip you with a written plan for every aspect of your activity, which cannot be achieved otherwise and can be very useful in obtaining private funding.
Having explored some of the advantages derived from crafting numerous grant proposals, it becomes clear that your company secures more than just a chance for funding. Facing external requirements regarding project planning, market analysis and technological offering allows the company to gain additional input and analysis insights that shape and refine its offering. Moreover, together with the experience you earn from conducting a collaborative project, planning a high-risk project, and learning the “grant language”, you enrich the company’s “track record” and are better prepared for private equity fundraising.