Issue#2: VCs are shaken - look to grants to survive winter

Bera market things...

Reading time: 2.5 mins

Grants are great.

My number 1 piece of advice to any first time founder - go for grants, test your ideas before diluting yourself.

My Web3 start-up has bootstrapped our early development with over $400k in grants and awards.

Learning how to apply to grant programs successfully means you’ll be building your product without giving away any equity…

Unfortunately grants are often overlooked as VCs preach doing multiple rounds e.g. a friends and family round.

Lets step through what you need to do to make a grant applications a success.

1. Eligibility

Each grant program will have its own eligibility requirements, such as the type of business, location, or the purpose of the funding.

Make sure you understand the requirements and ensure that your start-up meets them before applying.

Sometimes there are some obvious signs you won’t get the grant

2. Prepare a strong application

Most grant programs require a written application, but most start-ups usually fail to understand why the grants are asking for this.

Here are a few tips for preparing a strong grant application:

• Research the grant and the grant-making organization to understand their priorities and the types of projects they typically fund. In Web3 these will typically be ecosystem funds, so there needs to be an emphasis on how your technology will enable other projects within your application.

• Clearly articulate the problem your start-up is trying to solve, and how your solution addresses that problem (bit like a pitch deck)

• Outline a realistic and detailed budget that demonstrates how you will use the grant funds to achieve your goals.

• Demonstrate the impact and sustainability of your project. Will you start generating revenue at the end of the grant period?

• Get letters of support or endorsements from relevant organizations or individuals. These are aka LOIs.

3. Apply for multiple grants

Don’t have all your eggs in one basket, look at multiple grants from several sources if applicable.

Don’t be Anakin…

For those Web3 founders out there DeFi Llama has put together a great list of grants to explore: https://wiki.defillama.com/wiki/LlamaoGrants

Bonus: When not to take grants

Here are a few situations when a start-up might not want to take grant money:

• Too many strings attached, it might not be worth the effort of applying for and accepting. Grants typically requires the start-up to provide regular updates and reports, this can be a time-consuming process.

• A grant that doesn't provide enough funding may not be sufficient to make a meaningful impact.

• Equity requirement - may defeat the point of going after this funding source as VCs may take an equal stake but provide great support.

Done

It can take time and effort to find and apply for grants, but the rewards can be significant.

Grants can provide vital funding to help your start-up get off the ground or take the next step in its growth especially while the funding market is still in a downturn.

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