• Home
  • Learn
  • What to Consider Before Investing in Grants

What to Consider Before Investing in Grants

By on February 26, 2021 3 min read

Are you looking for business grants? Join our Grant Match Program and we'll email you a custom list of grants that could be a fit for your business.

Best of all, as we get new grants that match your profile, we will email them straight to you!

Get your custom grant list
What to Consider Before Investing in Grants

This is not just a list of grants to apply to if you're a woman entrepreneur. That breadth of information is covered in our other post, 6 Business Grants for Women. Rather, this article focuses on the ins and outs of grants and other forms of funding to better explain the “whys” behind the do and don't of applying for, and investing in, grants. In particular, this post will focus on start-up grants and where the best investment of your time will come into play. Here’s what to consider before investing in grants:

Read our complete guide to business grants

Valuing the Investment

A grant can be the backbone of a company just starting to get off the ground. However, a grant is much like a risky investment. The payoff could be huge, but it could also be a waste of time and resources if you're not awarded. Therefore, how can you determine what grant applications to invest time in versus the ones to avoid?

The biggest rule in investing with grants is the 20% rule. Simply put, if you do not have a 20% chance or higher of being awarded the grant, there is an extremely high probability that you will waste whatever resources you are putting into the application. For businesses already with a strong foundation, a risky investment with a lower percentage may still be appealing, as they have more resources.

Investing in Grants

The easiest way to calculate your chance of winning the grant is by contacting a representative of the grant directly. Ask for the number of total awardees for the last cycle and divide by the total number of applicants. Furthermore, a quick trick to increase your percentage is to aim for grants with specificity. If your company is in the field of art, then prioritize art-based grants first.

The next step in valuing the investment is to consider the process of the application itself. “Time is money” is a cliché for a reason. Starting a business from the ground up takes a considerable amount of time and effort, and therefore, any additional time you have outside your agenda is immensely valuable. Always divide the award amount by the number of hours you will spend in pursuit of it, as well as the hours needed to manage it. Many grants come with additional strings. These often include spending reports, updates, etc. If the initial application process and the additional managing take away more resources than you're receiving, then the grant becomes a deficit.

Grants for Growth Newsletter

Navigating a Database

Take your culinary skills to a whole new level by transforming your cooking talents and ideas into a lucrative business. Whether you choose to open a cozy community cafe or offer personal catering for events, food service remains ripe with potential. Samantha Fore connected with her Sri Lankan roots and amazing cooking abilities to hit the road with the popular pop-up eatery, Tuk Tuk Sri Lankan Bites. The Kentucky-based entrepreneur found a way to interpret her own career goals. For Samantha, it seems, the best yet to come.

Grants.govis the go-to for finding every sort of grant available. It's easy to navigate, but if you're new to databases, then there are innumerable guides online, including instructional videos.

Different grant databases usually fall into three different database categories: active funding opportunities, foundation profiles, and awarded grants. The first of these three types include sites such as Grants.gov. These are the databases to find open applications throughout the year.

Once you make a list of possible grants, the second type of database is to look into for more information on the foundation itself. It is always wise to ensure that your business aligns with the mission and values of the foundation you seek to gain support from. Not to mention, your application will seem more favorable to that foundation if you express similar interests and goals. The best source for this is to use the FoundationDirectory.

The last of the types of databases isn't as useful for new businesses as it is for established nonprofits, but it is still a good place to learn the history of grants provided by foundations. If you're curious to see the history of an organization’s giving or the kind of businesses they have awarded in the past, then sites such as Federal Reportermay be of interest.

One of the biggest mistakes for a new business owner is to apply to every possible grant you find. However, taking the time to better evaluate grants as an investment, saves time and revenue.

For additional advice, be sure to read through our page on Grants & Funding. Another, often undervalued, form of future funding for your business is investing in networking. After finding the right grants for your business and applying, take the time to enrich your network through some of our tips and tricks, including these Top 5 Networks for Women Business Owners.

Join the Friday Fund Newsletter

About Fundid

Fundid is redefining how small businesses understand and access capital.

We spend our time thinking about what the world would look like if the 80% of businesses that have under 10 employees had access to the capital they needed to grow and thrive. 
Similar Articles

Similar Articles

By Michelle Griczika on April 11, 2023
Are you a new business owner with big dreams? Are you looking for ways to fund your new venture but...
By Fundid on April 26, 2023
Starting a business is an exciting adventure! After months of research, hard work, and preparation...
By Fundid on June 06, 2022
Companies often need help managing their cash flow, especially in their growing stages. Most...