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Startup Capital - In this article I’m going to cover the types of businesses that qualify for a startup funding or grant and I will give you a few examples of where to find these funds or grants.
Then, I’ll share some tips to help answer the question: “How do I get free money to start a business?”
You can also read this article on Startup Funding | How To Find Funds For Your New Business Idea
Let’s start by looking at the common categories that startup grants or startup capital fall into.
These are geared toward a business that creates novel, potentially disruptive products. So, this will generally be entrepreneurs in technology, medicine, science, agriculture, education, and research and development. An example grant is the Small Business Innovation Research program, which awards grants of up to $150K in the first phase of funding. Depending on the results achieved, more grant money, up to $1 million, could be awarded.
This generally cover the cost of installing sustainable infrastructure and/or energy systems. The Rural Energy for America Program is part of the USDA, and awards renewable energy systems and energy efficiency improvement grants to agricultural producers and rural small businesses.
Speaking of rural businesses, there are various grants that aim to stimulate the economy in rural and economically distressed areas. An example grant is the Rural Business Development program, which is specifically for nonprofit and public entities.
From the same agency, rural farmers might be eligible for the Value Added Producer grant - startup capital. And for-profit businesses that provide education or health care to rural communities can check out the Distance Learning and Telemedicine grant.
Female entrepreneurs, there is a whole sector of grants dedicated to getting your startup off the ground. You can start your search with programs such as Cartier Women’s Initiative, Amber Grants, and Girl boss Foundation. The grant scene is pretty favorable for nonprofit startups that have 501(c)(3) status with the IRS. With this designation, you’re eligible for some government and private grant money.
You’ll be able to find grants from places like grants.gov, Grant Gopher, and Grant Watch, just to name a few. There is grant money available for nonprofits providing services to veterans, as well as retraining grants for veterans returning to civilian life. You can check out Vet Fran and the National Association for The Self-Employed Growth Grants for more information.
One of the more active categories of grants is those aimed at minority-owned businesses. Some potential resources for these grants include: Grants.gov, Dare To Dream Grant Program, Native American Business Development Institute, Office of Minority Health Grant Programs, and State government grants.
Then there are general grants that are available to any kind of business, but they are VERY competitive, so you’re going to need a SUPER impressive story or track record to really impress the judges. Two examples of grant programs in this category are the FedEx Small Business Grant Contest and Visa’s Everywhere Initiative. So, that’s the type of grants available to startups.
Now how to actually win one of those grants? How do you make your startup stand out from the rest?
Here are 6 tips to keep in mind when applying for a grant:
1. Make Sure you’re Eligible - Sounds Obvious but Triple-Check.
2. Tailor Your Pitch to your Audience - Who’s offering the Grant? Are they Formal Organization or more Laid-Back?
3. Don’t Skip any part of the application - Even If It Seems redundant, don’t Skip It.
4. Create a compelling narrative - Don’t put the judges to Sleep. Be interesting.
5. Be realistic -Not just for humility. Show your business Sense.
6. Talk about how your business will affect your community - Community Advocacy Is the thing.
Let’s be real. Finding grants or startup capital that are for new businesses is tough. And there are government grant scams that you have to watch out for! There AREN’T huge piles of free grant money ripe for the taking. It’s a highly competitive and selective arena.
Want to do more research on available grant programs? Feel free to do that. Have questions? Hit us up in the comments. And, as always, consider sharing our articles.