Stacy L ChinFounder, KeepYourEquity · I get the government to write you checks

Reasons why you should NOT fundraise with grants #SHORT

8 Mar 2023 · 1 min

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In this short video, Stacy Chin explains that pursuing grant funding is not suitable for every startup. She highlights three main drawbacks: (1) grant processes have long timelines, which can be problematic for early‑stage companies that need cash quickly; (2) there is no guarantee of award even with a perfect application, due to opaque decision factors; and (3) grants may not align with the capital needs of companies in a growth phase that require faster, larger investments. Chin advises founders to assess their current stage and cash‑flow urgency, and to consider seeking outside investors in parallel with any grant applications to avoid funding gaps.

Chapters

Are there any circumstances where you don't think it's a good idea to go after grants? Yes. Raising money through grants is not a good fit for everyone, and that is okay. The timelines are really long. As an early-stage company, time is king. You want to make sure the fundraising route is aligned to what you need at that time. Depends on the stage that you're in, it's not a good idea to go for grants if you need money sooner. If you are in a growth phase, you might want to consider outside investments that can come in a little bit quicker. Whenever you submit a grant, no guarantees whether or not a grant would awarded despite whether you wrote the most perfect grant in the world. There's just a lot of factors behind the scenes that you're just not familiar with that would indicate whether or not a grant gets awarded. It might make sense to look for investors in parallel with submitting grants yourself.