A Good Grant Lesson

The actual story that I’m about to tell you is real, but I’m going to change the name of the grant agency.

The grant lessons in this article are for entrepreneurs and non-profit organizations, and it can save you money, headache, and one of the most precious resources of all in businesses – time.

Recently I met a bright entrepreneur. Young and hardworking, he is exactly what the federal and provincial governments are looking for. A job creator, an innovator, a market-driven product, and a new Canadian. I mean governments should be lining up to fund him.

He retained Alberta Business Grants to build a VIP Finding Grant package. That’s when we find every grant dollar eligible for his business and share our decade of grant experience. Having seen all the eligible free cash on the table, he engaged us to write the first grant.

The first grant program we went after was called the “Innovation Program Grant.” Not it’s real name.

The grant guidelines said, “we’ll fund travel to new markets, new products, etc.” I mean, it basically said it would be willing to fund just about everything.

We looked like a perfect fit, but I’ve learned a few tricks over the years.

The first step I recommended was that he call the grant agency and see if we’re a good fit.

He did.

As I expected, the grant agency loved him. “You should apply!” he exclaimed.

I gave the entrepreneur caution.

“Be careful,” I said. “Grant agencies love to boast about their numbers.”

Grant agencies love to say, “we had over 100 applicants apply,” they boast. “Unfortunately, we could only accept 5 exceptional innovators.”

The reality is that 50 of those applicants shouldn’t have even wasted a minute of their time applying in the first place.

The cold reality is that in some cases the grant agency knew it too, but they are in a really difficult spot. Imagine being in their position. How do you tell an entrepreneur who is eligible for the program, but they really don’t think your idea will win? It’s really tough.

So how do you, the entrepreneur, determine if you should apply or not?

You need to decode your call with the bureaucrat, and I’ll explain how we did it.

After the entrepreneur got off the call, he was pretty ecstatic to apply.

Not my first grant rodeo, I recommended two tactics.

I knew we had to run a test before we wrote.

STEP ONE

First, we had two eligible projects. Instead of writing one application for everything, I said we should divide them into two shorter applications.

I highly recommend this approach by the way. The applications are easier to write, and in my experience, you are more likely to get at least one. I’ve actually seen us get both before, which is a real bonus. Anyway, you reduce risk and it’s clearer to write if you write two.

STEP TWO

Second, I said we will write a really rough draft and submit it for the grant agency to review. I spent a couple hours drafting up two “draft” applications, and we ran them by the grant agency.

Well, well, well…did the grant agency man’s tune change.

“The first one is not a fit at all,” he exclaimed (even though the grant guidelines said it would btw). “It would be much better for another program; a perfect fit for that grant.” “Excellent,” I thought to myself. “Now we have a clear green light for a grant and a project. Plus, we now have a grant agency champion to help us navigate the complex government landscape.”

“The second one needs to clearly be a new product or a “significant modification” to an existing product. It can’t just be a modest modification to an existing product,” said the grant agency man.

Now we’re really in the grey zone. Here are the risks to winning the grant:

As a writer, can I really convince the grant agency that his project is a “significant” vs “insignificant” modification. That is hard. The entrepreneur is creating the next version of his product, and for him “it’s really significant,” but will the grant agency buy it?

The grant staffer said, “you will have to tell a really convincing story” and show the impact. The final draft will need to have much more details, financials, letters of support, and independent supporting documentation. “Exactly what I was hoping for,” I thought. “We want to know the likelihood of winning BEFORE we spend all that time and energy.”

As an aside, the entrepreneur was thinking, “what planet is this bureaucrat on? I have to sell, make payroll, attend tradeshows, hire and fire staff, and this government guy wants me to spend a bunch of time telling some detailed story about my product that is already currently selling well? I don’t have the time or energy for that!” Fortunately, he just said, “Thank you for your time sir.”

While we are on this aside, and it’s outside the scope of this article, 99% of grant agency folks are really wonderful people and want to help, but they or their masters are often from government not business.

The cold reality is that some grants like this “innovation grant” can be a complete distraction for the entrepreneur. Apple’s latest innovation is the next version of its 12 year old iPhone. Often, “innovation grants” want “new.” But is “new” just a squirrel for you?

The problem is that “new” can be a complete distraction for the entrepreneurs’ core business. As one of my mentors notes in this clever card:

THE FINAL DECISION

Feeling that we were in the “grey zone,” I recommended we “walk away.” “Let’s go after the sure thing,” I said.

I learned this lesson the hard way. Sometimes people say, “let’s take a shot. What do we have to lose?” You can lose a lot (e.g. time and energy), including the grant.

I need to get back to writing the sure grant, lower my client’s risk, and greatly increase his chance of winning the first time we apply.