The Career Series: How to Fund Your Startup with Grants
Most of the startup entrepreneurs we have spoken to for our Startup Stories series have funded their companies through grants such as SBIRs. Grants are very attractive to startups because they are non-dilutive funding and so are not offered in exchange for equity like Angel or VC investment. Leveraging grants allows entrepreneurs to keep ownership and control of their company. As Bradley Messmer, CEO of Abreos Biosciencestold us, “Grants give you credibility and show an investor that the science is real. Most angels don’t have the ability to do deep due diligence in every area in which they might want to invest. So it helps if you have the NIH stamp of approval.”
With that in mind, here are 10 tips to help you successfully apply for a grant to fund your early-stage company:
Choose the right grant and the right agency. There is no point in applying for an SBIR grant that is funded by the NIH if you are not working on a health-related technology.
Richard Baldwin from nanoComposix has had several SBIR and STTR grants. He recommends that you talk to the program officer and check that you are meeting their requirements before submitting the application.
Richard also advised starting to plan and write early.
Jason Poulos CEO of Librede has also successfully applied for SBIR grants. He told us that it is important to know your audience and to package your information for them. In his case, it was the NIH.
Talk to other people who have been successful. Find out what worked and didn’t work for them.Try to read a successful grant.
Have a clear message and use simple language to explain your science. Get someone who is not an expert to read it and tell you whether they understand it.
Jennifer Schneider, Principal at Tiber Creek Partners, a consulting agency that helps companies and academics write grants, recommends that you understand your competitors and explain in your grant application how you are different. “Tell reviewers here’s what we are going to do, here is how we are going to achieve it and this is how we are different from our competitors. The differentiation piece is often missing,” she said. “Show how what you are doing is really special – do you have a different way of thinking about the problem? How is your solution different?”
Jennifer also recommends that you walk reviewers through your data. “We often leave a lot of interpretation to reviewers about the data or about the message,” she said. “Make sure you say that this is special for these reasons. Here are these figures and this is what you need to know about them.”
Get supporting letters. If you are developing a drug or medical device, get letters from physicians saying they would use your product and/or from patient advocacy groups explaining the importance of your solution.
If you don’t succeed, take the feedback on board and try again – many of the entrepreneurs we have spoken to have succeeded on their second or third try.
This article was originally posted on the Life Science Network and was written by Leah Cannon, the content editor for Life Science Network.