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by Mike Vestil 

The Complete Guide To Grants For Startups

Starting your own business is an exciting but risky venture. To lessen the financial burden, small businesses can benefit from securing grants to get them off the ground. Grants for startups are non-repayable funds that support founders of new businesses in the initial stages of development.

This financial aid can help with product research, market analysis, and patent approvals, among other things. In this article, we will explore the types of grants available, the application process, and the eligibility criteria to help you secure funds to launch your own venture.

Introduction To Grants For Startups

What Is Grants For Startups?

When we talk about grants for startups, we refer to funds provided by governments, non-profit organizations, corporations or philanthropists that are aimed at promoting innovative businesses.

These funds are non-refundable and are awarded on a competitive basis to companies that meet certain criteria. Grants for startups can be used to cover costs related to research and development, hiring new employees, purchasing equipment, marketing, and expansion.

The main difference between grants and loans is that grants do not need to be paid back, while loans have to be repaid with interest. Grants for startups are seen as a way to stimulate economic growth by promoting innovation and entrepreneurship.

They also provide a way for startups to secure funding without taking on debt or giving up equity. Startups that receive grants also gain credibility, which can help them attract additional investment down the line.

Overall, grants for startups are an important tool for promoting innovation and entrepreneurship, and can provide critical support to early-stage businesses with limited financial resources.

Importance Of Grants For Startups

Grants play an important role in the success of startups. When starting a business, obtaining capital is crucial, and this is where grants come in. Grants are financial aid given by various organizations to help entrepreneurs who want to start a business or expand an existing one.

Grants provide a unique opportunity to entrepreneurs since they are not required to pay back the loan. By encouraging startups, grants not only help businesses grow but also provide job opportunities for people, which benefits the entire community.

Grants serve as an alternative to traditional funding options, such as loans from banks. Banks often have a higher interest rate, and entrepreneurs may be required to provide collateral to secure the loan.

Grants, on the other hand, are often offered by government entities, non-profit organizations, and corporations, and are not required to be repaid. Another advantage of grants is that they can provide access to resources, networking opportunities, and professional mentorship.

These opportunities can help the startup in its early stages, when it is most vulnerable. Overall, grants provide a low-risk option for entrepreneurs while creating jobs and stimulating economic growth.

Types Of Grants For Startups

Grants are financial resources provided by the government or private organizations to assist new businesses, individuals or organizations to achieve specific goals.

Grants for startups can be categorized into three main types: Seed funding grants, growth and expansion grants, and general small business grants. Seed funding grants are provided to startup businesses or individuals who are looking to kick-start their business idea.

These grants can be obtained from accelerators, angel investors or venture capitalists. Growth and expansion grants are provided to businesses who are looking to expand their operations or scale up their existing business.

These grants are provided by foundations, government agencies and private organizations. General small business grants are provided to small businesses that can use the funds to meet their daily operations and enhance their working capital.

Seed funding grants are awarded to businesses that are in their initial stage of development. The aim of seed funding is to assist the business in developing its prototype, creating a minimum viable product, and validating its business model.

One of the most common types of seed funding grants is business plan competitions. These competitions not only provide funding for the winner but also offer mentorship, coaching and networking opportunities to the participants. Angel investors and venture capitalists also provide seed funding grants to startups. These investors are looking for businesses with high growth potential that can generate returns in the long run.

Growth and expansion grants are awarded to businesses that have already established a strong base. These grants aim to help businesses in expanding their operations, hiring new employees, or building new products.

Foundations and government agencies are the primary providers of growth and expansion grants. These grants usually come with strict guidelines that dictate how the funds can be used.

Businesses that are looking to apply for these grants need to have a clear growth plan that outlines how they intend to expand their operations, and how they will use the funds.

General small business grants are awarded to small businesses that are currently operating, and need financial support to meet their day-to-day operations or improve their working capital.

These grants are typically provided by government agencies like the Small Business Administration (SBA) and private organizations.

The eligibility criteria for these grants may vary depending on the provider, but small businesses usually need to have a certain level of revenue or employee size to qualify for these grants. The application process for these grants is less complex compared to the other two types of grants.

1. Government Grants

a. Federal Grants

Startups can benefit from grants that are provided by the federal government. Federal grants are often highly competitive and have strict requirements, but they can provide an excellent source of funding for businesses that meet their criteria.

These grants are typically designed to fund research and development, with the goal of promoting innovation across a variety of industries. Federal grants can be used to fund a wide range of activities, including basic research, applied research, and technology development.

These grants can also be used to fund the creation of new products or the improvement of existing ones.

One of the most popular types of federal grants for startups is the Small Business Innovation Research (SBIR) program. This program provides funding for research and development projects that have the potential to commercialize new technologies.

Another popular federal grant program is the Small Business Technology Transfer (STTR) program, which is similar to the SBIR program but requires collaboration between a small business and a research institution. Both the SBIR and STTR programs offer significant funding opportunities for eligible startups, but they also require a comprehensive research proposal and a competitive application.

In addition to these programs, startups can also explore federal grant opportunities through the Department of Commerce, Department of Defense, and Department of Energy.

These departments offer a range of grants and programs that fund innovation and technology development across various industries.

Startups may also be eligible for federal grants through specialized programs such as the National Science Foundation’s Innovation Corps (I-Corps) program, which supports entrepreneurial training and market research for innovative technologies.

Applying for federal grants can be a complex and time-consuming process, but the potential benefits can be significant for startups that are successful in securing funding.

To increase their chances of success, startups should consider working with a grant writer or seeking professional guidance from a Small Business Development Center (SBDC) or other similar organizations. By carefully researching federal grant opportunities and submitting a competitive application, startups can access valuable resources to support their growth and success.

b. State Grants

State grants are another excellent option for startups looking to secure funding. Just like federal grants, state grants are non-repayable, which makes them an attractive alternative to loans. Every state offers grants to startups, which means that you need to research your state’s grants to understand your eligibility requirements.

Understanding your eligibility will help you to identify the grants you qualify for and apply to them. Generally, the state offers grants for a variety of purposes, including research and development, hiring, and purchasing equipment. State grants may be targeted to businesses that are located in particular regions, businesses that are veteran-owned, or those that focus on certain industries, such as green energy or biotech.

If your startup focuses on enhancing the economy of your state or region, creating employment, or providing innovative solutions to essential problems, you may qualify for financial assistance from your state. Typically, state grants are granted based on specific criteria, such as the startup’s potential to grow and its potential impact on the community.

Also, some states have matching grant programs, which means the state will match the funds provided by an investor or business partner up to a specific amount. Thus, partnering with other funding sources can help you secure a more significant funding amount.

Additionally, some states offer tax credits to startups that have applied for state grants, which means that your startup may benefit from tax reductions in other areas.

By taking advantage of state grant programs, you could save a significant amount of money when starting your business. It’s essential to note that some grants have specific deadlines for application submission, so it’s important to plan accordingly to avoid missing out on opportunities.

Applying for grants can be a long and difficult process, but the potential benefit of securing funding significantly outweighs the cost. In summary, state grants are a viable option for early-stage startups that do not have the revenue or assets to qualify for loans or businesses that are not interested in taking on more debt.

c. Local Grants

Local grants are one of the most accessible funding sources for startups. These grants are provided by local government agencies, municipalities, and private organizations, and are mostly aimed at creating employment opportunities and fostering economic growth within the area. It is important for startups to assess the eligibility criteria and application requirements for local grants since they differ across regions, sectors, and types of businesses.

Most local grants are limited to specific geographic areas, and the funds may be allocated based on the type of business, the impact on the community, and the potential for growth. Some local grants may also require matching funds or cost sharing, which means that startups need to be prepared to invest some of their own capital to qualify.

The application process for local grants typically involves submitting a comprehensive proposal that outlines the business plan, the intended use of funds, the projected impact on the community, and the expected outcomes. Startups that apply for local grants should be prepared to demonstrate their readiness, commitment, and capability to execute the proposed plan, and to provide evidence of their financial and managerial capacity.

In addition to funding, local grants may offer startups access to valuable resources, such as networking opportunities, mentoring, and technical assistance, which can help them overcome challenges and expand their reach. Overall, local grants are an excellent way for startups to obtain funding, gain visibility, and establish a foothold in their local markets.

2. Corporate Grants

Types Of Corporate Grants

The world of business is highly competitive and requires entrepreneurs to find ways to stay ahead of the curve. Startups may face a myriad of challenges such as limited funding, lack of resources, and little to no industry experience. One way for startups to address some of these issues is by applying for corporate grants.

Corporate grants are a source of funding for businesses that can help drive growth and expansion. They are awarded by corporations to businesses that meet certain qualifications or eligibility criteria. Corporate grants provide funding for various types of projects, including research and development, community outreach, and capacity building. There are several types of corporate grants available that startups can apply for.

The first type of corporate grant is a research and development grant. These grants are given to businesses that are focused on developing new products, technologies, or services. This type of grant is often used by startups in the technology or pharmaceutical industries. Research and development grants provide funding for new discoveries and innovations, which can help startups gain a competitive advantage in their respective markets.

The second type of corporate grant is a community outreach grant. These grants are given to businesses that are dedicated to giving back to the community. Community outreach grants can be used to support a variety of initiatives, including education programs, job training, and charitable causes. Startups that receive community outreach grants can use the funding to build brand awareness and loyalty with their target market.

The third type of corporate grant is a capacity building grant. These grants are given to businesses that need assistance with building their infrastructure, processes, and organizational capabilities. Capacity building grants can be used to hire new staff, upgrade technology, or improve overall efficiency. Startups that receive capacity building grants can use the funding to strengthen their operations and become more competitive in their industry.

In conclusion, corporate grants offer a valuable source of funding for startups that are looking to grow and expand. Each type of corporate grant serves a unique purpose and can help address specific business needs. Understanding the different types of corporate grants that are available can help startups identify the best funding opportunities for their business. It is important for startups to carefully review eligibility criteria and application requirements before applying for corporate grants to maximize their chances of receiving funding.

Eligibility Criteria Of Corporate Grants

Eligibility criteria for corporate grants are a set of requirements that startups must meet before being considered for the grant. The criteria vary from one corporate grant to another. Some of the general eligibility criteria include having a registered business entity, being operational for a specified period, having a valid tax identification number, and proving financial need.

Others include having a business plan, being able to demonstrate leadership experience and expertise, having a marketable product or service, and having a marketing strategy. Startups that have an established track record of growth and impact might have higher chances of getting a grant, while those that focus on social impact or environmental sustainability might be preferred by certain corporate grants.

Startups should also research and tailor their applications to the specific eligibility requirements of the corporate grant they are applying for. Some grants might prioritize startups in a particular industry or technology sector, while others might focus on supporting underserved communities or underrepresented founders. Understanding the mission and values of the corporate grant programs can also guide startups to align their proposals with the grant’s criteria and objectives.

Additionally, startups that have already secured other funding sources, such as venture capital or angel investors, might not be eligible for certain corporate grants. Some grants might also have geographical limitations or prefer startups in a particular region or country. Therefore, startups must carefully read and follow the eligibility requirements to avoid wasting time and resources on applications that are not a good fit.

Overall, eligibility criteria serve as a screening process for corporate grant programs and a tool for startups to assess their readiness to apply. By meeting the eligibility requirements, startups can position themselves as strong candidates for the grant and showcase their potential for growth and impact.

Application Process Of Corporate Grants

The process to apply for a grant can be daunting, but with a clear understanding of the steps involved, applicants can increase their chances of success. The first step is to identify the grant that best fits the needs of the startup.

There are various types of grants available, including seed grants, research grants, and innovation grants. Once a grant has been chosen, the next step is to thoroughly review the eligibility criteria to ensure that the startup meets all requirements. It is important to note that eligibility criteria can vary significantly between different grants.

After confirming eligibility, the application process can begin. Most grant applications require a detailed business plan, financial projections, and a description of how the grant funds will be used. It is essential to spend ample time on this section, as it can significantly impact the chances of being awarded the grant. Startups should ensure that all information is accurate, well-researched, and presented in a clear and concise manner.

Along with the application, startups may be required to submit additional documents, such as letters of recommendation and financial statements. It is crucial to carefully review all instructions provided in the grant application, as failure to submit required documents can result in immediate disqualification.

Once the application has been submitted, most grants have a review process that can take several months. During this time, it is important to maintain open communication with the grant administrators and to promptly respond to any requests for additional information. After the review process has been completed, the startup will be notified whether they have been awarded the grant.

Overall, applying for a grant requires careful planning and attention to detail. By identifying the right grant, thoroughly reviewing eligibility criteria, and carefully completing the application process, startups can increase their chances of obtaining the funding necessary to launch and grow their business.

3. Non-Profit Grants

Types Of Non-Profit Grants

Non-profit grants are a vital resource for organizations that prioritize their mission over profitability. They help fund services, programs, and events designed to create maximum impact for the targeted audience.

There are different types of non-profit grants available, and organizations need to be aware of what’s available to determine which grant would better align with their organizational objectives. Government grants are among the most widely known options, and they are issued by government departments and agencies at the federal, state, and sometimes local levels.

Non-profit grant opportunities, such as Challenge grants, provide organizations with the opportunity to get creative with their project, and they usually come with a high amount of recognition and visibility. Women and minority business owners can benefit greatly from the grants for women and minority business owners, which is a program specifically designed to help underserviced groups.

Capacity building grants are designed to provide assistance to organizations with a healthy track record, but one that needs additional support in building their organizational processes and procedures. Corporate giving is a growing resource of non-profit grants that offer funding to organizations whose services align with their objectives.

Lastly, foundation grants come from private, charitable foundations, whose objectives align with the areas they fund. Foundation grants can be more manageable to apply for, and they come with an added sense of credibility from the foundation’s backing.

Organizing and preparing a grant application is a daunting process, but knowing what type of grants are available can help an organization to select applicable grants that better align with their organizational objectives.

Eligibility Criteria Of Non Profit Grants

Eligibility Criteria are an essential part of the grant application process. They outline the qualifications that need to be met before a startup can even be considered for a grant. The eligibility criteria can differ depending on the type of grant and the organization that is providing it.

Generally, though, there are several common eligibility criteria that startups need to be aware of. Firstly, most grants require startups to be registered as a legal entity, such as a non-profit or LLC. Additionally, startups need to have a business plan that outlines their objectives, goals, and how they plan to use the grant money.

Startups also need to have a leadership team that can demonstrate their ability to manage the grant and execute on their business plan. Additionally, startups need to meet specific financial requirements, such as having a certain amount of revenue or being in business for a minimum amount of time.

Lastly, some grants may have specific eligibility criteria related to the industry or sector that the startup is operating in. It is critical for startups to fully understand the eligibility criteria for each grant they apply for to increase their chances of being awarded the grant.

Application Process To Apply For Non-Profit Grants

The application process is an essential step when it comes to non-profit grants for startups. To apply successfully for any non-profit grant, you must first do your research to learn about the grant-making organization’s priorities, objectives, and requirements.

Once you’ve identified a grant to apply for, begin by reviewing the funding guidelines to ensure that your startup meets the eligibility criteria. It is also essential to follow the application instructions and complete all required forms accurately, paying close attention to the deadline for submission.

One critical aspect to look out for in the grant application process is to ensure that the grant application aligns with the mission and objectives of your startup.

Additionally, it would help if you included relevant information in your proposal, such as your startup’s mission statement, goals, objectives, and outcomes of past programs. It would also be useful to include a clear description of in what ways the non-profit grant or grant funding will impact your startup.

Furthermore, your grant application must have proper formatting, syntax, and grammar, so ensure to review your application before submitting it. Lastly, remember to track your application’s progress, follow up accordingly, and patiently wait for the grant-making organization’s decision.

4. Crowdfunding Grants

Types Of Crowdfunding Grants

Crowdfunding grants have become an attractive source of funding for various startups. Several types of crowdfunding grants are available for startups. Firstly, equity-based crowdfunding grants offer supporters company’s ownership in exchange for capital investment.

The investors then become stakeholders in the company and have a stake in its success. Secondly, reward-based crowdfunding grants offer supporters an incentive in the form of a physical or non-physical reward.

Thirdly, debt-based crowdfunding grants involve supporters funding the company with a loan payable with interest to investors. Lastly, donation-based crowdfunding grants offer supporters the opportunity to donate funds to a cause or project without expecting any financial returns.

To be eligible for crowdfunding grants, startups must meet certain criteria. They must present a convincing business plan, demonstrate a revenue model, have a prototype or an existing product, and offer an enticing value proposition to investors.

Additionally, startups must have a competent team with a diverse skill set to run and grow the company successfully. The company’s social impact and its relevance to society also play a crucial role in securing crowdfunding grants.

The application process for crowdfunding grants varies depending on the type of grant. Generally, startups create a profile on the crowdfunding platform and submit their proposal, including their business plan, funding needs, and pitch video.

Once the proposal is live, the startup should promote it to attract potential supporters. Social media, email campaigns, and word-of-mouth are effective strategies for promoting crowdfunding campaigns. Investors evaluate the proposal, and if they find it compelling, they can invest or donate funds.

The crowdfunding platform manages the funding process, and once the campaign ends, the startup receives the funds, and investors receive their rewards or returns, depending on the type of grant.

In conclusion, crowdfunding grants provide startups with a viable alternative to traditional funding sources. By familiarising themselves with the various types of crowdfunding grants, startups can identify the grant that suits their business needs the most.

Moreover, meeting the eligibility criteria and following the application process diligently can increase the chances of success in securing a crowdfunding grant.

Eligibility Criteria For Crowdfunding Grants

In order to be eligible for crowdfunding grants, startups should be aware of the various requirements that must be met. Most grants require that the startup be registered as a legal entity and have a clear mission statement.

The startup should be able to demonstrate that it has a strong plan for growth and a clear strategy for achieving its goals. In addition, startups must show that they have the ability to manage their finances effectively and that they have a strong team in place to execute their plan.

Many grants require that startups be working on projects that are innovative or have the potential to create significant social impact. Finally, startups should be prepared to provide detailed information about their research and development process, including any patents or intellectual property that they have developed.

There are a few other factors that may impact a startup’s eligibility for crowdfunding grants. Startups with a focus on sustainability or that contribute positively to the environment or local community may be given preference.

Additionally, some grants may only be available to startups that meet certain demographic criteria, such as being led by women or minorities. Finally, startups that are located in specific geographic areas may be more likely to receive grants from local foundations or government organizations.

It is important to note that eligibility criteria can vary widely among different types of crowdfunding grants. It is important for startups to carefully review the criteria for any grants they are interested in and to make sure they meet all of the requirements outlined.

In some cases, startups may need to work with a grant writer or consultant to help them navigate the application process and ensure that they are presenting themselves in the best possible light.

Application Process Of Crowdfunding Grants

When preparing to apply for a grant, startup companies must be aware of the application process involved. The first step is to thoroughly research the available grants and determine which ones align with the company’s mission and goals.

This involves evaluating the qualifications required and ensuring that the company meets the eligibility criteria. Once the appropriate grants are identified, the application process can begin. The application typically requires detailed information on the company’s structure, purpose, and goals, as well as financial statements and projections.

Additionally, many grants require a business plan, a budget proposal, and a marketing strategy. Companies may also need to provide evidence of their compliance with legal and regulatory requirements.

In some cases, the application may require the participation of a third-party reviewer or a pitch to a panel of judges. With all of these requirements in mind, startups should allow ample time to complete the application thoroughly and to ensure that it is polished and professional.

This may involve obtaining feedback from other professionals in the industry or engaging the services of a grant writing consultant. Throughout the process, startups should maintain open and clear communication with the grant organization, ensuring that all application requirements are met and deadlines are adhered to.

By following these guidelines, companies can enhance their chances of success in obtaining a grant, thereby advancing their innovative ideas and promoting lasting societal benefits.


Summary Of Grants For Startups

In summary, grants for startups are a crucial source of funding for entrepreneurs who lack capital to fund their business ideas. They provide access to resources that help startups grow and expand their businesses. However, obtaining grants is not an easy task, and entrepreneurs must go through a rigorous application process to secure funding.

Grant providers evaluate business ideas based on various criteria, including sustainability, innovation, and potential for growth. The future of grants for startups looks promising as more organizations recognize the need to support entrepreneurs in bringing their ideas to life.

With the increasing demand for innovative solutions and a growing focus on social impact, grants for startups will continue to play a critical role in driving entrepreneurship and innovation in various industries.

Future Of Grants for Startups

As the world becomes more technologically advanced, startups are gaining increased recognition as being the driving force behind innovative ideas and solutions. With the demand for new and creative solutions continuing to grow, the future of grants for startups is looking bright.

In the years to come, it is likely that more and more individuals and organizations will recognize the value of supporting startups in their efforts to develop new technologies and ideas. This may lead to an increase in the number of grants available for startups, as more funding sources become available.

Additionally, as the world shifts towards a more sustainable future, it is likely that grants for startups focused on environmental and social impact will become increasingly popular. Startups that can demonstrate their commitment to reducing their carbon footprint, or contributing to social causes may be more likely to receive funding.

However, as the number of startups seeking funding continues to grow, there may be increased competition for available grants. This may mean that startups will need to become more creative in their applications, in order to stand out from the crowd. Startups may need to demonstrate their unique value proposition and their potential to make a significant impact in their industry.

They may also need to show how their solution differs from existing competitors, and how it fills a gap in the market.

Finally, as the world becomes more connected, so too will the startup community. With enhanced connectivity, there may be a shift towards global grants, where startup funding is not limited to a specific geographical region. This may allow startups to access funding from a much larger pool of potential funders, and may encourage more collaboration and innovation across borders.

In summary, the future of grants for startups is one that is filled with opportunities and challenges. While there may be increased competition for funding, there will likely also be an increase in the number of grants available, particularly for startups focused on sustainability and social impact.

Startups will need to become more creative in their applications, and demonstrate their unique value proposition and potential to make a significant impact in their industry. With enhanced connectivity, global grants may become increasingly popular, allowing startups to access funding from a larger pool of potential funders.

Grants For Startups: FAQs

1. What Are Grants For Startups?

Grants for startups are funds that are provided by government organizations, non-profit organizations, and other entities to help early-stage startups to kick-start their projects and build their businesses.

2. Who Is Eligible For Grants For Startups?

Eligibility criteria for grants for startups can vary depending on each grant provider. However, typically, startups that are in the early stages of development, have innovative business ideas, and can demonstrate a high potential for growth are eligible to apply.

3. Where Can Startups Find Grants?

Startups can find grants from a variety of sources such as government agencies, private foundations, venture capitalists, and angel investors. They can also use search engines to find grant opportunities that match their business type and location.

4. How Much Funding Do Startups Receive Through Grants?

The amount of funding that startups receive through grants varies depending on the type of grant and the grant provider. Some grants provide modest amounts, while others can provide large sums of funding. It is important for startups to do research on different grant types to determine which grants are suitable for their business needs.

5. What Should Startups Prepare Before Applying For Grants?

To apply for grants for startups, startups must have a solid business plan that outlines their goals, their target market, and their revenue projections. They should also ensure that their business model is sustainable and that they can demonstrate their ability to execute their plans.

6. What Are The Advantages Of Receiving Grants For Startups?

Receiving grants for startups can provide several benefits including the ability to invest in the business’ growth without having to dilute ownership or give up equity. Grants can also act as a stamp of approval for the business and can help startups to secure additional funding from other investors.

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About the author 

Mike Vestil

Mike Vestil is the author of the Lazy Man's Guide To Living The Good Life. He also has a YouTube channel with over 700,000 subscribers where he talks about personal development and personal finance.

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