Grants In The Tech Space Are Available For Small Businesses On A Mission

Posted: Aug 27 2019, 10:58am CDT | by

 

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Grants in the Tech Space are Available for Small Businesses on a Mission
Grants in the Tech Space are Available for Small Businesses on a Mission

Grants are extremely helpful for tech companies, but being awarded money doesn’t guarantee success. For example, A123 – a company that made batteries for electric cars – was backed by a $249 million U.S. government grant. The company employed high ranking engineers who built high performance batteries. Despite their technical success, the company filed for bankruptcy in 2012.

The success of any company is not determined solely by how much capital they have, but how they run their business and navigate the ever-changing landscape of tech. Still, acquiring grants to get started is a huge help for small tech startups.

There are a variety of grants available to tech companies awarded by local and federal agencies.

Here are three examples of grants awarded in the tech space:

1. The EDGE grant

Funded by the Delaware Division of Small Businesses, the EDGE grant matches $3 for every $1 spent by small businesses that do a minimum of 51% of their business in Delaware. The awards go up to $50,000 for non-STEM entrepreneurs and $100,000 for STEM startups.

The matched funds are provided for necessary expenses like advertising, marketing, construction and renovation, equipment, website development, lab space, and even rent.

Truly supporting small businesses, the EDGE grant is only available to businesses less than five years old with 10 or fewer full-time employees (or 20 part-time employees).

The Delaware Division of Small Businesses favors applicants with:

  • A business located in certain districts
  • Founding members with MWVBE (Minority, Women, Veteran Business Enterprise) status
  • The potential to create jobs in the state of Delaware

The EDGE grant (Encouraging Development, Growth and Expansion) was announced on May 6, 2019. The first round of applications were due on June 14, 2019. Finalists are expected to be announced sometime in August and the grantees will be chosen soon afterward.

2. The NIH SBIR/STTR grant

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs fund many small businesses with early capital to help them research, develop and commercialize health related technology.

The program’s goals are to support innovation that has the potential to improve health, save lives, and reach consumer markets.

NIH SBIR/STTR proposals

The proposal process for the SBIR/STTR grants are more involved than most. Applicants putting together an NIH SBIR/STTR grant cost proposal can be overwhelmed with the requirements, including the need to define fringe and F&A rates. Most applicants are afraid to propose anything higher than a nominal fringe and F&A rates, but that’s the wrong approach according to the government grant CPA specialists at Jameson & Company, CPAs.

They suggest applicants start with a 35% fringe rate and a 40% F&A rate, as having too low an indirect rate will result in cash flow problems that can jeopardize the business. They point out the business can re-budget money from their indirect cost budget categories into direct budget categories, but not the other way around.

SBIR/STTR grants have three phases

Unlike other grants, the SBIR/STTR grant is awarded in three phases, each phase increasing in requirements and amount awarded. For example, Assistech Systems LLC won a Phase I award in 2019 in the amount of $99,986. This tech company created what they call a “Person-Centered Planning ToolKit” designed to increase opportunities for customized employment for individuals with cognitive disabilities.

If Assitech Systems LLC continues to apply for subsequent phases, they can, but the requirements will get stricter. Funding for Phase II will be based on the results achieved in Phase I as well as the commercial potential for the project they propose. Phase III is designed to help businesses pursue commercialization but the SBIR program doesn’t fund this phase.

3. Miscellaneous educational technology grants

Educational tech grants are available from government agencies, private companies, charities, and sometimes individuals. They’re sometimes difficult to track down, but Top Hat published an article with several links to search for grants as well as advice for writing applications and proposals.

The most important thing to remember about preparing a grant proposal is that you’re asking for money from an organization that has a specific idea for what they want to fund. It’s possible your project might not be a perfect match. If you’re rejected, don’t take it personally. Rejection doesn’t mean your project isn’t good enough.

Grants in the tech space are funding a brighter future

Developing great ideas requires money – something many small businesses struggle to acquire. Grants in the tech space are helping small businesses pursue ideas that have the potential to change the world.

This story may contain affiliate links.

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The Author

<a href="/latest_stories/all/all/68" rel="author">Larry Alton</a>
Larry is an independent business consultant specializing in tech, social media trends, business, and entrepreneurship. Follow him on Twitter and LinkedIn.

 

 

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