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When Are Grants Better For You Than Venture Capital?
When Are Grants Better For You Than Venture Capital?

When Are Grants Better For You Than Venture Capital?

3 minutes, 45 seconds Read

Venture capital is available for a number of businesses that are developing products for large markets. You hear about some of these companies, many in the technology field, nearly every day.

Did you know that grants may also be available for the same businesses?

So which should you take: venture capital (VC) or a grant?

To help you decide, here are some facts about venture capital and grants.

Venture Capital Facts 

  • Venture capital is an investment in a corporation — purchase of stock.
  • With venture capital you give up ownership — typically 30% to 50%.
  • When a large block of ownership is given up — 50% or more — in many instances, you’re an employee once again, this time working for the venture capitalist.

Facts about Grants

  • Grants do not require that you give up any ownership — you own 100% of the business to which the grant was made.
  • A grant may be distributed in parts, for example, a $100,000 grant disbursed $20,000 at a time. This can be highly motivating to you, making you to work more.
  • A small grant may be followed by a big grant if the work is successful and has been done as promised or on-time.
  • Most grants are given for product development, where marketing is not covered by the grant. So you must find more money for marketing.
  • Plenty of money is available for grants, but it can be slow in being delivered to you because of required paperwork.

K-15 : The IWS Venture Capital Millions Kit

$96.00

The IWS Venture Capital Million Kit provides the steps for preparing an Executive Summary, business plan, and all the sundry elements that VCs look for in a burgeoning prospect.

SKU: K-15

What’s the Best Choice?

If you don’t want to give-up ownership of your business, you’ll take the grants funding.

If you need large amounts of money, say $1-million and up, you’ll go for venture capital.

Of course, you can pursue both.

How Do You Get Either Form of Funding?

To get either type of funding:

  1. Your business must, in general, be organized as a corporation.
  2. You must be doing practical research that can lead to useful products for large entities, such as the Department of Defense, U.S. Department of Health, the Office of Homeland Security, State Education Department, City Health Department, State Electric Power Company, etc.
  3. Research you’re doing must be conducted in a formal lab or manufacturing setting. It’s almost impossible to get a research grant for a home business because agencies want practical results.
  4. Non-corporate grants are available for small businesses in the fields of book publishing, theatre production, and arts (painting, sculpture, etc.) of various types. These are generally obtained from the National Endowment for the Arts and from similar state of city groups. The work being done can be performed at home. Venture capital is, in general, NOT available for these types of activities because they do not meet the profit goals of VC.
  5. Smaller grants are often available for small to medium size businesses, no matter of corporate status or size or location, through local chambers of commerce or the Small Business Administration. These are generally not on-going and have “windows of opportunity” during which you can apply, usually online.

K-8 : The IWS Raising Money from Grants and Other Sources Success Kit

$120.00

The first book in your kit, Fast Guide To Getting Profitable Grants For Yourself Or Your Firm, answers 14 key questions you may have about grants. These questions are arranged to give you a fast, sufficiently deep understanding of grants in a short time. So turn to your Fast Guide now and read the questions…

SKU: K-8

Your Grant Proposal

To get the grant you seek, you must submit a proposal detailing

(a) how mush money you need,

(b) the purposes for which the money will be used,

(c) what benefits the public, the government, or other groups will derive from the work.

Submit your proposal to government (State, Federal) and private grant givers.

It’s an Art and a Science

Grant-getting is both an art and a science. It takes continual searching to find the grants that are available through all the various government agencies and offices and corporate arms.

After that, completing the proposal is, as stated, an art and a science because many different factors come into play, from what industry you’re in to the timing to your individual circumstances. Some grants are only for women entrepreneurs, for example. Other grants only accept applications/proposals in the first quarter of the year. Be sure to consider those and other factors when searching and applying.

Networking via your Chamber of Commerce or community mixers is a great way to discover new and little-known grant opportunities. Sometimes, it’s as the saying goes: it’s not what you know, but who you know.

Most importantly, keep trying! You never know how many fish you will catch until you put your hook in the water. So keep your hook wet and sooner or later, you’ll get the grant you need!

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