Granting wishes

Non-dilutive funding in the form of grants can be invaluable for giving startups an initial boost, but finding out which grant is right for you, and navigating the application process, can be challenging.

Here are seven tips from experts and founders on how best to access and apply for grants.

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1. Understand the landscape

Jonathan Ring, co-founder and CEO of cleantech startup Zincovery, says that it’s vital founders have a firm grasp of the funding environment. “When first starting out, it’s important to build your understanding of the different government institutions, how they all operate together and what’s going on in them, because it’s not simple.”

It’s also important to be clued-up on the process. “Understand what the requirements are before you start applying for a grant,” says Max Thompson, Investment Manager at New Zealand Growth Capital Partners (NZGCP). “What commitment is going to be needed? Is there co-funding, and if so, can you provide this? You have to make sure you can meet the basic criteria.”

2. Allocate appropriate resources

Thompson advises founders to be as efficient as possible. “Don’t overcommit resources and make sure what you do allocate is weighted in terms of the value you are going to get out of the grant.”

Emily Blythe – founder and CEO of Pyper Vision, which creates safe visibility at airports – agrees that it’s important to assess if the time and effort will be worth the funding that’s available, but tells founders that the first grant will always take the longest. “The process will get quicker over time as you get to understand the process, terminology and reporting requirements.”

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3. Treat the grant provider as a customer

“People will work hard for a sale, but often they won’t work as hard for grant funding,” says Deloitte Director Jason Yang. “Founders should treat the grant provider as a customer, as someone they are promoting their business to. There is no such thing as free money – you have to work for it.”

4. Embrace the process

Founders can find value in the application process itself. “It might highlight areas that you need to focus on a bit more, or things that you haven’t thought about,” says NZGCP’s Thompson. “There are people who get a lot out of it from a business planning perspective.”‍

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5. Language is key‍

Spencer Willis, general manager of funding engagement at Callaghan Innovation says writing a grant application is about storytelling.

“It’s likely the person reading the application is not as technical as you are, so don’t overcomplicate it. We want you to tell us what the problem is, how you are going to solve it, and what the outcomes are.”

6. Foster relationships

Take advantage of the connections you make. “The network, guidance, mentorship and support from those who have done it before is key,” says Carmen Doran, CEO of medicinal cannabis company Helius Therapeutics. “Make the most of opportunities when you are invited to networking events.”

In addition, she says small grants can often lead to larger grants. “Small grants are proof of concept, and if you can show you have a good product market fit as a result of that smaller fund, there are bigger funds you can apply for.”

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7. Get advice

Helius Therapeutics has accessed various Callaghan grants, including the R&D Experience Grant, and Doran advises founders to work closely with the Callaghan team. “They are very supportive and provide a lot of guidance; it’s not an exam, so don’t feel like you’ve got to do it all by yourself.” She also recommends the Regional Business Partner Network for those struggling to navigate what grants are available to them.

Deloitte’s Yang suggests reaching out to someone who understands the process. “That could be advisors or grant specialists – and sometimes you might even need grant writers.”

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A roundup of currently available grants in New Zealand

Callaghan Innovation

New to R&D Grant: Maximum of $400,000 (co-funded at 20 percent) for up to two years of funding for ventures without prior experience investing in R&D.

Ārohia Trailblazer Grant: A full grant (up to $4 million on a co-funded basis) or a seed grant (up to $25,000, co-funded) for non-R&D activities involved in taking an innovation to market.

R&D Career Grant: Designed for businesses looking for fresh expertise to help solve a specific R&D problem. Funds the first six months of employment of a masters student (up to $30,000) or PhD student (up to $35,000).

R&D Experience Grant: Funds innovative businesses to employ tertiary-level students as full-time interns ($10,400 for 400 hours of full-time work).

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Kiwi Innovation Network (KiwiNet)

Pre-seed Accelerator Fund: An open-ended 50:50 matched grant (a typical grant is between $150,000 and $250,000). Aims to get technology to the point of investor readiness.

Emerging Innovators Fund: $10,000 to help scientists and researchers with clever new ideas build industry connections and demonstrate proof of concept.

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Agricultural and Marketing Research and Development Trust (AGMARDT)

Agribusiness Innovation Grant: Up to $200,000 (at least 40 percent co-funding required for grants over $30,000) for individuals involved in agriculture, horticulture and forestry in New Zealand, with a project that will benefit the food and fibre sector.

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Ministry for Primary Industries (MPI)

Sustainable Food and Fibre Futures: Co-funds a range of initiatives that target New Zealand’s food and fibre sector, with a pool of $40 million available each year.

Māori Agribusiness Innovation Fund: Co-funding of up to $250,000 to develop innovative practices and products within the primary sector.

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Others

R&D Tax Incentive: A tax credit equal to 15 percent of eligible R&D expenditure.

R&D Loss Tax Credit: A refund of up to 28 percent of your tax losses from R&D activity.

Various New Zealand Trade and Enterprise (NZTE) grants, including the International Growth Fund (50:50 co-funding to accelerate international growth) and Strategic Investment Fund (up to 50 percent of the cost of a feasibility study, to a maximum of $100,000).

The Waste Minimisation Fund and the Plastics Innovation Fund, both administered by the Ministry for the Environment.

The Consortium for Medical Device Technologies (CMDT) provides a range of grant funding for medical technology.

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