1. Do we match the funder’s objectives?
As in any commercial situation, the applicant needs to start by putting themselves in the shoes of the people who will be parting with their cash. Ask: “Does the product or proposition that we are offering match what they are looking for”? Does it do the job for them?
It’s important to research and understand what drives each potential funder.
- Do they want to save the world?
- Is their agenda the exploitation of science?
- Are they in an economic development role, supporting particular sectors and creating jobs?
- Is their viewpoint international or at a local level?
2. Is our innovation at the right stage?
The stage of the innovation dictates who funds it and why any funding may be available. The above diagram illustrates the various technology readiness levels, as widely agreed.
Levels 1 to 3, shown on the left, are very much about 'blue sky thinking' and early research and would typically be carried out in universities and research establishments, funded by Research Councils and the like. As the development moves further to the right toward Level 8 and 9, nearer and nearer to commercialisation, the more it is expected that industry and those likely to reap the rewards will bear an increasing amount of the costs.
Funding tends to be available around Levels 6 & 7 where the project is concerned with showing that the technology works in a real-life situation.
3. Do we have the resources?
A grant application is simply the route to convincing funders that their money will be used wisely.
- Are the physical resources available? This might be premises, machinery or testing facilities
- Is the innovation protected from being copied, at risk of reducing the potential reward? Is the idea able to be patented? Are the design elements registered? Are there trademarks and a brand to protect?
- Are the right people available, either within the business or in the wider network?
- And what about the finance needed? Are you risking your own money? Are others backing the idea too?
4. Can we fund the project?
On the question of resources, nearly all grant funds available require 'match funding' where the funder makes a contribution but the beneficiary does too. The intervention rate, as it's called, can be dependent upon the scheme, the size of the company, its location and other factors.
Sadly, no-one just comes along and hands over cash. Some schemes will pay a proportion of costs up front but, generally, expenses must be incurred and proven before they can be claimed back. Understanding the impact of this process on cash flow is critical.
5. How will we take it to market?
Making the business innovation journey can be an exciting and fulfilling one but, at some point, it’s time to move away from the theoretical and show the idea to the world. Many innovators become so embroiled in their ideas that they forget about the customers who ultimately must need or want the solution and be willing to pay for it.
- Have we identified customers?
- Have we evidence of their need?
- How will we be telling people about our shiny new innovation?
- And how will they actually get hold of it?
Sometimes the best ideas fail because they simply cannot be made at an acceptable cost, so a realistic and well thought through business model is essential.
6. Can we write it down?
And, as we've already said, no-one is going to simply give away public money. The beneficiary has to work for it. Generally, the more funding you seek, the more detailed will be the information required.
A decision must be made as to whether or not the organisation has the time and skills to do this. If not, there are outsourcing solutions available - but the information will still need to be provided.
If there are deadlines, and there often are, all the information needs to be available in time. It’s not a good idea to get the application in on the very last day at the final hour (!) and last minute rushes can run into problems with IT. For extra insights, it’s worth attending any relevant events, such as the briefings held around the country as Innovate UK launches each funding round.
7. What are the alternatives?
Applying for grant funding for an innovation can be a frustrating process and, given its often competitive nature, may not be successful. So, how else might you fund? From internal resources, from friends and family? By borrowing? Or taking investors on board? And don’t forget that R&D tax credits can represent a significant contribution from HMRC.
EEN advisers can offer support in identifying suitable funding options available for your innovation at European, national and local level.
Contact the EEN team for further information.