Public Funding 101
This guide is a living document that provides access to all of the relevant resources the public needs to engage the government as a resource for building businesses.
What You Will Learn In This Guide?
- Why grant funding is a compelling source of capital.
- How startups can use grant funding.
- How to find the ideal funding opportunity.
- How to write successful grant proposals.
- Sector specific insights into the grant funding ecosystem.
How To Use The Guide
Jump to a relevant section using these links, search for relevant content, or browse the whole guide. Our resources library will connect you to free and subsidized resources to support development of your public sector strategy. Grants generally fall into the following categories:
- Business Innovation - digitization of services, unique business models, education, deployment of new service models
- Technology Innovation - science-based innovation, technology-based companies, research and development
- Social Innovation - non-profits, impacted based work, socially progressive work, millennium development goals
Want to find relevant content quickly? Use the search at the top of the page.
About OpenGrants
OpenGrants is run by an experienced and passionate team of entrepreneurs, technologists and philosophers. We believe that, if done right, a business can be an effective catalyst for lasting change. Our past experiences exposed major challenges with grant funding, so we’re building the tools and community to solve them. It’s not an easy path, and not a typical company. Our mission—build modern infrastructure for public funding to massively improve the efficiency and equity of those funds—is what drives us every day.
Our Thesis
Technology and science will continue to advance exponentially in the labs and research institutions of the world. This constant drive for advancement is in human nature, and unless there’s a catastrophe, it won’t be stopped.
Unfortunately, the infrastructure that holds up our society was not designed to keep up with today’s pace of change. Our education systems, economic models, and cultural norms are buckling under the pressure of a world that looks completely different than it did just 20 years ago. A global pandemic has exposed the cracks that have been spreading for decades.
Nowhere are these cracks deeper than in our government, where hardworking public servants do their best to distribute billions of dollars in taxpayer money—money that’s earmarked to improve our societal condition—using PDFs, Excel, and often educated guesswork.
The core issues include outdated technology, lack of data, and poor communication tools. Because of these issues, public funding is indisputably inefficient, ineffective, and inequitable. As entrepreneurs and technologists, we cannot in good conscience sit back and let it continue.
Fortunately, the scenario is primed for action. Never before has technology been more available, affordable, secure, and scalable. Never before has the government been so hungry for—and open to—new solutions. And never before has society so blatantly witnessed systemic issues be exacerbated by outdated infrastructure.
The future of prosperity depends on our ability to bring an intelligent external solution into government. We must build deep partnerships across the public sector, leverage enterprise-class technology to build software and data management tools that fit the needs and pace of modern day society, and effectively integrate these two disparate worlds.
All of this must happen quickly if we hope to give the next generation any shot at tackling their own challenges. This is our massive transformative purpose. This is why we’re here.
What We Do
We empower startups, nonprofits, grant writers, foundations, and government agencies to participate in a new paradigm of funding. The OpenGrants platform—a search engine and expert marketplace—unlocks non-dilutive U.S. funding for organizations around the world.
Grants 101
If you are starting from zero and want to understand grant funding, start here. This section will give you useful background about grant funding generally.
A grant is an award, usually financial, given by one entity (typically a company, foundation, or government) to another, often an individual or a company, to facilitate a goal or incentivize performance. Grants are essentially gifts that do not have to be paid back, under most conditions. -- Investopedia
Grants are excellent strategic capital for startups. They are non-dilutive, which means they don't take up space on your cap table, and they don't need to be paid back. However, this means they come with some restrictions and limitations. Grants must be used for specific goals or outcomes, and they often require some reporting in exchange for the money.
Here are some of the main lenses through which you should view grants:
- Grants are a great tool to give organizations access to capital to fund research, development, marketing and growth.
- Grants are a partnership. A successful award means that you will have a contractual partnership with the granting entity to achieve a goal of some kind.
- Grants are non-dilutive capital. They are a great financial instrument to inject funding into a company, without giving away equity.
- Grants are a sale. They are very real market validation and a great early signal. They also ultimately result in a contract, which you need to understand and honor.
Can Startups Use Grants?
Startups can use grants. The US government deploys millions of dollars every year to support research in a variety of tech verticals including med-tech, blockchain, AI, and clean-tech. There are a variety of government agencies and private foundations that fund everything from outreach and education, to the development of energy infrastructure. You should consider grant funding as a strategic way to onboard capital and support the growth of your company.
How Do You Win Grant Funding?
Do your best to build genuine, honest relationships. Winning a grant is a lot like sales. Having a reputation for being decent and honest will increase your chances of winning grant funding. Your ability to be awarded grant funding is dependent on two very specific rules.
Rule 1: Follow the Rules.
This first one is simple to understand, but difficult to execute. Follow all instructions exactly. Pay attention to page limits, approved fonts, format, and order. In almost every grant funding program, we see people get disqualified. This means they could have had the best idea in the world, but it's not being considered because they did not follow the rules.
Naturally, we view the fact that this happens as a big problem, and we're working to solve it. In the meantime, you'll have to follow the rules.
Rule 2: Be A Good Partner.
This second rule is a bit more nuanced. Be a good partner. There are a variety of things that you can do to be a good partner. Some of the basics include being in good legal standing, and having a history of past successful projects is always a bonus. Offer to be helpful and build real relationships with the funder.
Meet with your prospective granting partner. Submit comments when they request feedback on proposed funding programs. Attend workshops. Make sure they have your company on their radar.
Consider the following graphic when you are thinking about this process.
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The OpenGrants process for winning grants. It's not novel or new, it just works.
Frequently Asked Questions
Are grants free money?
No. They are non-dilutive, but there is significant opportunity cost and sweat equity involved. Also, many grantors deploy capital via reimbursement with some retention, so you often need capital to take advantage of grant funding.
What about my IP?
Access to IP varies. Have your attorney carefully review your contract. Know that you are under no obligation to do work with an agency until you sign the agreement, so don’t let IP keep you from applying.
How long will this take?
It can take a long time, months or even years. Grants are great strategic funding tools, but if you need capital in a hurry, go back to your investors or visit a bank.
Do I need to be a non-profit?
No. However, sometimes it may help to have a non-profit partner. For more information, search "partnering strategy" in this guide.
A Final Note About Grants
You need to start with a project, outcome or research idea. Grants are strategic capital. Trying to find a grant for the sake of grant funding is a fool's errand, so start with the end in mind. You will ideally want to develop a strategy that includes grant funding as an aspect of that strategy.
Working with professionals and doing your research upfront will ensure that you are highly competitive, and will dramatically increase your ability to be successful.
Last modified 1yr ago