If you’re an international founder, whether in the U.S. or outside, and looking for startup funding in the U.S., there are various options available, even the funds are coming from for-profit entities.
Grant funding, also known as free money, that usually doesn’t require a repayment, nor is the ownership of your company going to be reduced. That being said, there are certain conditions you need to be aware of before going down this route.
Sedale Turbovsky, the CEO of OpenGrants, shares some pieces of knowledge when it comes to grant funding, and see if this is a viable option for you to take as a startup founder.
What is grant funding?
- Grant funding is a non-dilutive type of funding that doesn’t require repayment. It is capital that you can bring on board and it doesn’t reduce the ownership of your company. You don’t have to pay the money back, that’s why people call it “free money.”
- Grant funding usually involves a contract that has an offer, an acceptance, and a consideration. Therefore, be sure to let your lawyer look at the contract before signing anything.
- Grant funding is usually about impact, relating to economic-related outcomes or delivery-based outcomes. In venture capital (VC), you’re looking at economic outcomes such as returns for investors. On the other hand, grant funding is usually about the impact (ex. testing a cancer vaccine or taking your new tech idea or prototype to commercial deployment).
How to Be Grant Ready
- Reporting – Have a clear accounting that you’ve used the grant money for the things you said you used it for, so be sure to have systems in place.
- Accounting – Have a good accounting system in place, and have a good attorney to thoroughly review your contract.
The Main Buckets of Grant Funding
- Social progress (ex. Job creation, addressing the unhoused population)
- Economic development (ex. Job creation, upskilling labor)
- Research (heavy R&D)
All of these categories are very important for immigration purposes such as the National Interest Waiver green card. These are valuable things for you to prove your extraordinary ability as evidence as well.
Potential Sources of Funding:
- Federal and state funding
- Private foundations
- Private philanthropy
While grant funding is abundant, in terms of utility, it is not easy to use for a lot of different reasons. Therefore, you have to do due diligence before getting yourself
If you want to learn more about Free Money and Funding Your Startup with Sedale Turbovsky, check out https://www.alcorn.law/podcast/ilt143