In the appropriately titled 2014 post “Free Money. HA!” (https://www.ebhoward.com/free-money-ha/) we explore the absurdity of the idea that there are funds out there just waiting to be handed out to anyone who asks. What a wonderful world that would be, but when our elders told us, “money doesn’t grow on trees”, unfortunately, they were correct. There are frequent rumors and numerous scams promising no strings attached funds to whomever. These “opportunities” are dangerous to approach and often result in fraud and theft. “Free money” is unequivocally a myth. There are however lucrative grant opportunities to explore within both the private and federal sectors.
While free money is total fiction, it is a fact that there are billions of dollars budgeted each year for federal grants for small businesses and nonprofits to assist with the costs of programs for social benefit and research. These grants are not “free money” but highly selective opportunities that come with a lot of rules. To obtain such a grant you must follow detailed instructions on staff, budgeting, reporting, and project activities. You must also demonstrate scientific merit, commercialization potential, and that the concept is innovative and groundbreaking. The acceptance rate for these types of grants ranges from about 3% to 30% at most depending on the agency and funding opportunity.
There are also private grants to be explored. In the case of for-profit businesses, most of these come in the form of pitch competitions and grants as part of a package for attending an accelerator or incubator. Less commonly, private foundations will host grants that small businesses are eligible for, usually for specific innovations such as COVID-19 solutions or grants geared toward underrepresented founders.
Other Funding Options
Other ways to obtain funding (which are also not free, and usually require some sort of equity) are an angel or venture capital investors. These types of investors will often seed fund a new business with the expectation that they will in turn receive stock options or equity from the company. Small businesses often prefer grants due to the lack of required equity or stock.
We help high-growth startups find and apply for non-dilutive funding. Schedule a consult call with us HERE.