National governments are aware that innovation created by start-ups and SMEs (Small and Medium sized Enterprises) is a critical source of economic growth and employment. For this reason, governmental institutions at national- and EU-level have created programs that support innovation activities in start-ups and SMEs. For a start-up public funding is risk-free capital. Often termed ‘soft funding’, public funding is non-dilutive, which means that companies will not have to give up ownership shares in return for the funding. The funding ensures swift implementation of your projects and enables fast market introduction of your product or service. In addition, public funding is a quality stamp, which helps attract further investments. So why give up equity before exploring the opportunities for - equity-free - public funding first?
Tech startup Dliver has received 0.1M€ in soft funding from the Danish fund InnoBooster and the European Horizon 2020 combined, with help from Techfunding.eu. Dliver is building the World’s first digital B2B marketplace, that matches supply of carrier vans’ capacity with demand for parcel delivery services – in a convenient, transparent and cost-efficient way. The company is now testing their MVP with select Danish customers, in which the solution has already shown to increase deliveries per driver and reduce fuel consumption per parcel. They now aim for quick scale-up to penetrate key markets across Europe.
For expertise on public funding we spoke to Lina Petrova from Techfunding.eu. Here is Lina’s 5 tips on how to succeed with your funding proposals:
1. Make sure the novelty of your technology is clear Government funds support the development of new, innovative services and products. The first question you need to ask yourself is whether your idea meets this requirement. After that, it is important that you make clear in the application how your service or product is different from competitors or alternatives. For example, can you quantify how much better your solution is? Or does it have features that none of the others have?
2. Show that you already have potential customers Projects that receive funding must have great commercial potential. Your idea is therefore only relevant if you actually have the opportunity to sell your product or service after the project is over. It is not enough to throw a lot of impressive market figures into your application. Have you actually talked to potential customers? Made interviews? Tested that your particular product meets their needs? Have you already generated early revenues? Give specific examples of who and how many prospects you have received interest from.
3. Underline strong skills in your team - but acknowledge weaknesses Your idea may be great, but if the fund doesn't believe that you can complete the project and commercialize the product, you won't get any support. Therefore, make a sharp and concrete description of your team's competencies and past achievements. And don't be afraid to point out where you lack knowledge. Funds support the hiring of new employees and the use of knowledge providers or partners. Therefore, it is positive if you have identified what type of knowledge you need and apply for support to bring this knowledge into the company.
4. Present a clear and concrete project plan Where private investors typically invest in your company, government invests in your development project. It is therefore important to emphasize that you are looking for money for a specific project. You don't just get a sum of money that you can spend as you please. This means that you must present a project description with a clear purpose, as well as an activity plan with milestones and budget for each activity. We often see companies not getting through this part of the application because it may seem a little heavy. But it is incredibly important to tell the fund what is going to happen in the project and what comes out of the support you are seeking. Define some clear activities - and take the time to think them through. What are some KPIs you need to reach? What milestones do you need to reach before you can start the next activity? And what are the sub-goals of the individual activities.
5. Get feedback on your application It is an absolute must to have another person give you feedback on your application. Preferably, find someone who doesn't know your business and project as well as you. When you are passionate about an idea that you may have been working on for a very long time, you can easily miss explaining some basic elements of the content.
How to get started
In the initial phase you should consider all the aspects of your project. These three pieces of advice might help you:
1) Find the right funding program Increase your chances of success by choosing the right call. It sounds so simple but the market for funding is vast and it takes time to identify the best options. Some programmes have a bottom-up call, while others have specific theme-based calls.
2) Check the novelty Examine whether or not your product/service has a sufficient height of innovation and as a result is new or applied in a new way. Do a novelty search or freedom to operate analysis. You can also have a university validate the technology or get in contact with the respective funding authority to “pitch” the idea.
3) Team up with the best Many funding programmes demand international partnerships – meaning you must apply as a consortium. It must be absolutely clear why each partner participates in the project. The ideal partner helps lift the quality of the consortium and has the skills and resources to carry out their own activities. Naturally, there are many advantages when teaming up with partners you already know. However, a new partner often contributes with new perspectives, which benefits the project and your company.Are you all set? Then you are ready to start scoping your project and writing the application.
Do you need assistance? For an overview of your soft-funding opportunities you can visit www.techfunding.eu or https://vf.dk/ where you will find up-to-date information about funding opportunities relevant for your specific innovation project.