Clients who choose not to hire us for a Funding Menu often ask for tips and tricks on how best to locate funding on their own in a reliable, constructive way. Of course, it is possible for clients to find their own funding through research but it is far quicker and easier to outsource this task to an expert. For those clients who choose to go it alone, we offer the following advice on finding funding that is a fit for their business.
Finding funding to fit your business or organization’s needs can be stressful and confusing. The process is made even more stressful when funding becomes imperative to continue operations, build capacity, or expand project activities. This push to obtain funding quickly leads many capital-seeking companies down a road fraught with mistakes and barriers that ultimately does not lead to funding.
The primary reason a funding opportunity does not work out for a business is that companies mistakenly try to retrofit their project, budget, and costs to align with the funding opportunity rather than determining specific needs first and seeking out a funding opportunity that fits them as they are currently. While it can feel like finding a needle in a haystack to finally uncover the right funding opportunity the payoff is well worth it. When seeking funding opportunities, there are several important aspects to consider.
Start off by researching funding opportunities that serve your existing budget (for very early-stage companies, this may require you to develop a revenue projection, burn rate, or cost assumptions if you do not have these already). If you only need $100,00 dollars, do not look for an opportunity that only offers $20,000 in hopes that you find something else to supplement it. Similarly, do not look for a funding opportunity that offers a $1,000,000 budget and try to cram unnecessary expenses into your existing budget to make it a fit if you only need $100,000. While there is nothing wrong with adjusting your budget slightly (say, by $5k or less) it is not good practice to try to force your existing budget into entirely new parameters to fit a funding opportunity.
Type of funding opportunity
There are many types of funding opportunities available. Some are for research and development while others are for social entrepreneurship and others are direct contracts for straightforward services or product delivery. It is critical to select a funding opportunity that accurately represents your business needs. If you wish to experiment and create an innovative proof of concept product it will not serve your company well to chase contracts that seek only a direct service. Similarly, if you are looking to fund social entrepreneurship there may not be viable research and development avenues for your idea. Too often we see companies in desperation for funding try to retrofit their concept into a type of opportunity that does not lend itself to the existing goals and objectives. This is always a mistake. The proposal for such an opportunity is likely to be disjointed and miss the mark. Even on the off chance funding is awarded the project is far less likely to be successful and achieve Phase II or follow-on funding.
Eligibility is the most important aspect of finding a viable funding opportunity. It is never advisable to try to apply for a funding opportunity with eligibility requirements that do not align with your company. This is the biggest mistake a company can make in pursuing funding. Read the eligibility requirements carefully, and ask the program contact any questions you may have regarding your eligibility to determine if the opportunity is a good fit. If the opportunity has eligibility requirements that your company does not naturally fit in your current state, do not apply.
Funding is important, but so is ensuring the funding you find is truly a fit for your company. You should never try to mold your company needs to apply for an ill-fitting opportunity, no matter how tempting the potential of gaining capital may be.
We work with high-growth startups and organizations that support the startup and innovation ecosystem. We build highly specific non-dilutive funding menus, provide proposal preparation services, and measure outcomes of funding through evaluation. Schedule a consult call with us HERE.