Here’s the deal. Grants are good. Grants are also never guaranteed. I’ve been a party to many conversations with founders hanging their dreams of success on the receipt of non-repayable funding, compliments of the Canadian grant system. In the words of my good friend Rasta Phil, “It doesn’t work like that.” Here’s why:

 

Grants are competitions. Through a generic application, you have a mission to showcase your product, process, and people by weaving a tale so fantastic that it sparks interest in the hearts of the decision makers. By the way, you need to accomplish this feat while using basic English because the last thing you want to do is use industry-specific lingo that leaves the judges lost and confused. Founders who are able to craft a realistic and informative proposal are one step closer to getting the prize. But still…grants are not guaranteed.

 

Maximum impact is better when the government is involved, this includes government supported funding programs. In order for funding organizations to receive the support, they have mandatory goals that need to be met. Those goals usually revolve around the overall impact that their funding will have within communities. This can be anything from job creation to having a direct impact on the recipient’s ability to raise funding and/or increase sales. These are the factors that attribute to the national GDP, so naturally funding organizations that will create the biggest and most immediate impact is always a priority. I’m speaking from experience here. Imagine my disappointment when I’m told that decision makers have chosen to give 5K to a company that recently raised millions instead of supporting a company that was bootstrapping and clearly had a greater need. I get it, but that doesn’t mean I agree. What I know for sure is that grants are not guaranteed.

 

Grants are reimbursements. If you are one of the lucky ones to receive the coveted email of approval, you will quickly notice The Asterisk. You need to spend the cash up front and wait a number of weeks/months for repayment after you accomplish the tedious task of filling out forms and supplying receipts and credit card proof. If you don’t have the cash upfront some organizations will work with you and provide a portion of the funding in advance. But when this is not possible, be prepared to take that acceptance letter and use it as proof that the money will be repaid when you are begging your friends and family for one more loan. Beware, if your final submission includes ineligible expenses, reimbursement is not guaranteed.

 

Most grants are not substantial. This does not mean that they are useless, but if you are holding out on launching an initiative be prepared for quantities that range in the amount of 3K – 10K. I feel fortunate to have received a number of grants, however, when they are piecemeal, creating a substantial impact is going to be a challenge. Consider using the funding to conduct a smaller test that contributes to your overall ability to prove the concept.

 

Substantial grants can require substantial information. I’m talking more than a business map and a paragraph about your dream. They require hard facts, proven research, forecasts, projections, audited financial statements, and mandatory matching funds.

 

In September of 2018, the Federal Government announced the Women’s Entrepreneurship Fund as a first step in advancing gender equality while prioritizing diverse women entrepreneurs. Sounds wonderful, doesn’t it? Buried in the fine print is The Asterisk; Applicants were required to submit two years of audited company financial statements. I thought this was a big misstep. There are so many challenges facing women and diverse founders that contribute to a lack of liquid cash, which was the very reason for this grant in the first place. The caveat of spending 2-5K, on the low side, to obtain audited financials automatically disqualifies the business’ that need the most support. I understand that audited financials provide proof and create a level playing field, but there has to be a better way. My advice to underrepresented entrepreneurs, gather all your loonies and make sure you find a credible auditing company to comb through your financial statements, even if the cost is substantially more than the total amount of sales in that fiscal year. Or put off applying for the larger grants until you have the ability to provide industry standard accounting records.

 

Instead of focusing on grants, focus on growing your bank account through a reliable revenue stream. When the time is right, leverage grants like a powerup. Just don’t rely on them because grants are not guaranteed.

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