State of Grant Funding in 2022
Among other funding, the recently signed $1.2 trillion U.S. infrastructure bill sets aside billions for economic development, small business, and tech innovation in 2022.
In This 1-Hour Session, We Covered:
- Changes we can expect in the funding landscape
- Key sectors that will receive an influx of funding
- How to prepare and capitalize on new programs
- New tools and resources
- Innovation in the grant ecosystem
About the Speakers
Sedale Turbovsky, Co-Founder & CEO, OpenGrants
Sedale Turbovsky is the CEO and co-founder of OpenGrants, a venture-backed startup focused on building modern infrastructure for funding. He has been an entrepreneur since childhood. After honing his leadership skills as an outdoor guide in his younger years, he started his professional career as an independent consultant focused on delivering data products and digital strategies to enterprise clients in South America. He is experienced in independent grant writing and public/private partnerships at the highest level, having worked directly with OpenGrants’ current strategic partner, Momentum.
Donna Harris, Founder & CEO, Builders + Backers
Donna Harris is CEO of Builders + Backers, a venture studio and investment firm igniting entrepreneurial action and experimentation in communities around the world. Harris is also General Partner of 1776 Ventures, a venture capital fund with investments on five continents, and a Venture Partner at Praxis. She was formerly Managing Director of the Startup America Partnership during the Obama Administration and she is on the Board of the Global Entrepreneurship Network and the Policy Council of the Economic Innovation Group.
Harris is also an active angel investor, cofounder of K Street Capital, and was recognized as one of the top 25 female early-stage investors in the United States in 2021. Named as one of Washington DC’s Power 100 by Washington Business Journal and Washington Life, and as a Tech Titan by Washingtonian Magazine, she has become one of the most influential leaders on the intersection of entrepreneurship, investing and economic thriving. Harris holds a bachelor’s degree from Central Michigan University, an MBA from The University Michigan, and an honorary Doctor of Laws degree from American University.
Read the Transcription
Please note, this transcription is automatically generated and may contain some spelling and contextual errors.
I’m the CEO and co-founder of OpenGrants and we are the easy way to win grant funding. Welcome to the webinar today. We’re going to be talking about some of the funding opportunities and challenges that may be coming up here in the new year.
And I am going to go ahead and introduce just a bit of some of the topics. And then I’m going to let Donna, who is the founder and CEO of Builders and Backers introduce herself as well. Yeah, today’s discussion is really going to go a bit deep on the opportunities for grant funding and for building that we have in the new year.
Really excited about not only that, just the massive amount of opportunities. So I’m sure many of you have heard about the United States innovation and competition act. You may have heard about the infrastructure and the jobs act, all these really like exciting, massive chunks of money flowing everywhere.
It seems so we’re going to go a bit into what that actually means for you as individuals as small businesses and talk a bit about the opportunities that we have to engage. So I’m going to turn it over to Donna, really excited to have you here, Donna, thank you so much for joining us.
We’re excited to have you as a partner with open grants as well. And yeah, you want to go ahead and introduce you.
Yeah, sure. It’s good to see you and thanks for having me today. I’m excited about this conversation. So just a bit about me. I’m, as we’ve said, builders, CEO, builders, and backers just by way of background, I think can relate to many of you in the position that you’re in trying to find grants usually for your early stage company or your innovation and idea.
I have been there myself many times founder starting in entrepreneurial hotbeds in places like downtown Detroit and now live in Washington DC and have built things in industries, from education and healthcare to public affairs and policy. I have been in the seat where I’ve had to go and find the funding to keep the lights on and figure out how to grow my own company.
I’m also went over to the dark side. I’m a venture capitalist as well. So I’m the general partner of 1776 ventures. It’s a seed fund. We invested on five continents and that company, that fund is now fully invested, but we’ve got really great portfolio companies like Guild education and many others that are not only providing great returns, but doing really great things in the world as well.
And that’s really amatic for all of my work, which is how do we use entrepreneurship to jumpstart innovation in areas where they can solve big challenges and create a better society for all of us. So that’s what we do at builders and backers. And we’ll share a little bit more about our work there. But you can find me on Twitter at D Harris in DC, and I’m always love to get connected with entrepreneurs and hear what you got, what you guys have.
Awesome. Thank you so much for joining us. And I just want to say that a while ago, when I had the first zoom call with Donna, we sat down and when we were chatting while we were sitting down, but on computers, and chatted about quite a bit about like the mission and all the things you have going on at billers and backstop.
I know that’s what we should be doing. So just love like huge fans of over here, open grants and the vision that you all have for what you’re building. And and the fact that you’ve taken all this information and learning, and experience and turned it into something that I think is really incredible and gonna unlock some amazing things here in the United States and maybe one day abroad as well.
I want to start off the discussion today and I’m going to go ahead and. Going to go ahead and just put us here in, in some full screen mode. I want to start off the discussion. They had just a discussion about grant funding because we, there’s a lot of different money out there.
You just talked about, venture capital and, going around and looking for grants as well. What is, what’s so unique about grant funding? And I have my own thoughts on this, but I’d love to hear your thoughts. Like why’d you use why are we talking about grant funding? What’s exciting to you about grant funding.
And if you want to talk a bit about like the builders and backers, like grant program as well that I think that’d be highly relevant.
So many things to say let’s dig into first. The why I’m excited about grant funding, because I think that’s a great place to start. When we think about entrepreneurship and we use the words, scale and startup and funding people’s minds typically go right to venture capital and it’s really become almost the default funding mechanism in ecosystems and communities across the world.
And there’s a lot of buzziness and excitement, and we read a lot of press releases and articles about these venture backed companies that are becoming unicorns. But if we put it in perspective, Venture capital is the single most expensive source of capital out there. So if we were to stack all the kinds of capital that you could possibly take to build your company, you would start with grants at the bottom as the least expensive.
And you would go to venture at the top as the most expensive. So hands down as a. Greedy selfish entrepreneur who wants to keep more of the pie for myself. If I’m building a venture, I should want to grow my company with the most appropriate form of capital, but also the capital that costs me the least, right?
It’s just good business decisions. So if I can spend a week unlocking non-dilutive capital, that doesn’t cost me any equity and is the cheapest form of capital. Or I can spend a week pitching venture capitalists that are going to take some giant slice of my company and forced me to sell down the road.
I should want to try to go the least expensive route if I can. And I think most venture capitalists would agree with me, right? VC is really only designed for, the top sort of 1% of all sorts. She’ll go that route. And only 1% of those actually are going to turn into unicorns. We’re one of the things we hope to convey through our program and through, our writings and our conversations and these kinds of discussions is let’s not be as myopic about.
Let’s look much more holistically. And that’s really what we’re doing at builders and backers where we are builders and we are backers, we’re an investor. We take a full-stack approach, which means we want to help everyday people put their ideas into action, and we want to fund those ideas that work to their full potential.
And that for us is singles doubles, triples and home runs through everything from grants, all the way up to equity funding. And that’s why our partnership with open grants is exciting for us. And this kind of conversation today is exciting for us, but I’d love to dig more into why, where grant funding is going.
Because I think that takes that like why I’m excited about grants to even like the next level of what’s possible.
Yeah, no. And let’s definitely go there. Very excited about that. Before we dive in I just want to recap a couple of things you mentioned that I think are highly relevant and really important, and also core to why we love grant funding.
The first one is that it really is like, it’s the chief. It’s the least expensive money that you can find for your venture. And that means, typically grants don’t require any repayment. And typically they don’t require any equity in the company. And I want to throw out there this other fun fact because we.
In the entrepreneurial space, especially in the venture space as well. We get spun this there’s this very good narrative that goes on. That’s Hey, VCs have backed like Uber and, X, Y, and Z like, oh, they created all this transformational technology, which is great. And I’m not bagging on VCs.
We’re a venture backed. We love working with them. We, it plays a very important role in the ecosystem, but something to be aware of, it’s over the last 50 years, two thirds of the most like far reaching momentous technologies that have transformed the world, putting the stuff that’s making this work right now, those all came out of federally backed R and D projects that came out of national labs that came out of public universities.
And there’s a lot of, when you look at what, what actually moves the needle. On really transformational technologies requires de-risking and building it’s grant funding. And then when you skip over from there to what’s going to power folks who aren’t trying to build, like unicorn type things, like grant money is also aligned from an incentives and like outcomes perspective with like social impact and economic development and supporting underserved communities.
And it’s not to say that’s a bad thing, but venture is not really designed for that. It’s designed for returns and that’s what they optimize for. And that’s totally okay. It doesn’t fit the model of, a lot of businesses that are building on main street or that are just trying to build really good lifestyle businesses and employ people.
And that’s where a lot of this like economic drive that’s the economic driver of the nation are these small businesses that are creating these jobs. And so it’s really just a vital piece of the capital stack for companies that are building. Yeah, I, with you on that front
I don’t buy the media narrative that it’s venture capital or bust.
There’s an entire stack of stuff out there from, grants to debt-based fund revenue based on all the way up to equity. And, we think about this through the lens of you own your business, their number one asset you own is your equity. So you should guard it judiciously and spend it wisely.
And so spend it wisely. Venture capital is going to help you reach a scale that other forms couldn’t. But by all means, look across this entire stack and become knowledgeable about the entire stack. And the really great part is when I first started my career in entrepreneurship, way back when there weren’t resources like open grants and others.
It was making a lot of phone calls and surfing the internet, yourself, trying to like piece and bolt this thing together and figure out SBR programs and deadlines. And there weren’t easy ways to access people who, this is what they know and live and breathe, and they can jumpstart how to get that capital done quickly and inexpensively and find you the best targets possible.
Yeah. Yeah, I love it. And I think, that’s a great segue before we jump into like grant funding. And some of that I did wanna, I wanna throw a poll out there for folks. Just like just some general feedback from y’all who are listening in. So please do feel free. I just want to, let us know how you’re feeling, what you’re stoked about, what you’re thinking about.
Love to get your feedback. Feel free to respond to that. And I just want to talk a little bit at a high level of, grant funding, just what Donna just described has frequently been this sort of. Mystical thing of Ooh, we might get money and we might not. And do we just shoot our shot and see what happens?
And it can be really exhausting if it’s approached that way. And one of the things we’re very focused on at open grants is streamlining that access and streamlining transparency around just like a process and how to find it and where to find it, all those other things. But above and beyond all of that, I think one of the things that’s really exciting is starting to see and think about how grant funding ideally kind of functions for our society and drive some of this economic development.
And I love Donna, the program that you run with builders and backers is pretty unique for a couple of reasons. And I wonder if you could talk a little bit about like the grant vehicle and how it works. And why you deploy it the way you. Sure.
So as an investor and as somebody who has worked with entrepreneurs through running an incubator and accelerators there’s nothing, I love more than interacting with entrepreneurs, but one of the things that began to appear as a pattern to me is as entrepreneurs, we see a problem, we identify an idea company, an idea, and I see entrepreneurs jumping in and building that idea and trying to raise capital and getting on the rat race towards getting a seed round and I need funding and I’m building product.
And yet we actually don’t need to take that pathway because it turns out most of the ideas they hadn’t been fully tested. Had they put it out in market in low fidelity way. Might’ve learned that there was a better idea or they were misunderstanding something about the problem. And just a lot of confusion about these sort of early stages of, if I have an idea, what should I do?
What’s the best pathway to actually get that idea put into place. And the other problem is. Our funding mechanism at that stage is personal finances, credit cards, friends, and family. And if COVID has shown us anything, it’s that most of us don’t have a savings account, banked up to be able to fund that many of us, most of us don’t have rich aunts and uncles and parents that we can lean on.
And it’s part of the reason why we lack diversity in entrepreneurship, but it’s also why we’re lacking diversity of ideas in entrepreneurship, because we don’t have a funnel that’s open to everybody to participate. And so what we also looked at. We truly believe entrepreneurship has become what I call financialized meaning.
If you look at our nation’s legacy, entrepreneurial thinking and doing has manifested in a lot of different ways from nation building to figuring out, some of how our civil society works and our great nonprofits to our innovation, mojo and leadership as a nation. We have now taken that broad scope of entrepreneurship and turned it into how do we get return on investment, right?
I want to feel you, I want to fund you like let’s, it’s all about exits. It’s all about scale. And so we wanted to take a step back and say, how do we actually write the ship so that we can be innovation, be innovative as a nation? Meaning everywhere I go, someone has ideas. Every dinner party I go to every time I tell people at the park or my son’s playground, what I do for a living.
I hear about people’s ideas everywhere I go. We don’t have a shortage of ideas. What we have is a gap between idea and putting those ideas into action because of the sort of confusion and financialized and the lack of friends and family. So we threw out the current model, we threw it away, said what could we do if we thought about this entirely differently?
And so we imagine life through the shape of a bow tie on the left side of the bow tie. Teaching as many people across the country and frankly, across the world, how to become a builder, how do I take my idea, turn it into a low-fidelity experiment and actually run that experiment in days or weeks with, zero or hundreds or maybe a few thousand dollars.
And by the way, Make money and obstacle let’s cover that cost ourselves so that when you get done with this program, you are a builder. You see yourself as a builder, you have a much higher agency. You have a sense that I can actually go tackle the problems I care about. I can bring my ideas into the world and then on the right side of the bow tie we’re funders.
So if that idea proves to work, we want to fund it at the launch stage. If it continues to work, we stage gate that through additional types and rounds of funding, and we do everything from a debt and revenue based funding to equity, funding, and grants. Now the left side of that bow tie, this program, where we teach people to put their ideas into action.
We provide a pebble grant as well. Because we want it to be, we want the program to be free and we want people to not have to worry about covering the cost of those experiments. So every participant gets up to $5,000 to spend on whatever is necessary to run that experiment. It’s non-diluted funding.
We don’t take any ownership, any equity, intellectual property for the idea remains with the builder. We’re, we look at it through this startup studio lens. We’re running a massively distributed startup studio with thousands of ideas and thousands of experiments happening around the world.
And we want to be the investor choice for the ideas that work. So for our model at that sort of preceded age where most of us don’t have friends and family grants are a fantastic vehicle, because why would we want to take equity in your company when you haven’t yet figured out. What your company needs to be, cause you haven’t run your experiments yet.
And so we’re an on ramp to entrepreneurship. We view ourselves as an on-ramp into programs across the world that then can help you take that idea to scale. But we think this is a missing piece in communities and ecosystems around the world and the program runs virtually. So you can participate from.
Yeah it’s amazing. A couple of things I just want to pull out because the program is incredible. I’m very excited about it. Just as a personal note, I wrote a while back a blog post about approaching this exact thing. I don’t think it saw the light of day for very many people, this idea of giving folks, access to what is effectively and correct me if I’m wrong, but it’s basically like this unrestricted funding that allows you to widely experiment in a really efficient way to bring your idea to light is incredible.
And I’ve always thought that. Especially with the advent of no-code and all these other tools and opportunities that are out there, you can really test your ideas. And it’s always like sad to me when I like I’m in an Uber or like the amount of conversation I’ve had with people who, I think everyone’s probably had these conversations oh, I had the idea for X before X happened.
What stopped you? And often the things that stopped people is that they didn’t have any money or they didn’t have any people to help them like put that idea out there and experiment on it. And so it’s for us at open grants, this is huge because this for us and talking about like the future of funding is really like the the future that we want to live in, where funding is accessible, transparent.
The process is, set up in these trenches instead of spending and giving someone a grant for a million dollars out the gates to do R and D. They don’t need that much money. And we have the technology in place to manage these relationships so much better.
Love that last point too.
We think about, we talk about our pebble grants. People say, oh, isn’t, how do you cover that $5,000 per builder? Isn’t that a lot of money, for this early stage program. And I say, let’s put it in perspective. If I were to make a series, a investment at the early stage of a company, It wouldn’t be unheard of for me to put $4 million into a company for $4 million.
I can cover a thousand experiments, right? Like it’s mind boggling when you put that in perspective, like what kinds of ideas are we missing because of the structure of the way we’re asking people to on-ramp into entrepreneurship and the lack of focus on what I call sort of modern era approaches, right?
Your low code, no code point is exactly the point. It is both the power being able to run a low-fidelity experiment versus build the whole thing. And. The ability to do that uniquely today because of the way technology has evolved, we can do all kinds of things. Today. We couldn’t do even five years ago that we’re not broadly teaching in entrepreneurship programs, college campuses, community ecosystems.
And we think that this is something that every American or, internationally, whatever everybody needs to know these things, because there are ways that you can not just launch a venture, but you can create a social enterprise. You can come together with your BFFs and do some kind of community project around something you care about.
It’s how we’re mobilizing marching around issues and organizing petitions and funding people who have. A child with cancer, like our ability to connect one-on-one with each other and connect in networks. We have far more power today than we realize. And we’re in a moment where most of us are going, wait a minute.
The world is so broken. So many problems. I feel like a bit victimized. When in fact there’s a whole host of tools and ways you could be taking action on the things you care about. And that’s the part that we want people to recognize that we don’t have to just sit back and wait for an institution to solve the problem.
We don’t have to sit back and wait for somebody to do something about filling the blank. We can be that somebody, but we just don’t know how to do that. And we can teach people how to do that.
Yeah, no, a hundred percent. And the reason that I was really excited about having this discussion in this format is I.
Fundamentally what you’ve built with boulders and backers. I think, there is a analogy or it is analogous to what should be done and like our vision for a lot of a lot of like big programs out there. And I just want to acknowledge, thank you all for participating in the poll real quickly.
I see that there’s some cautiously optimistic folks, so people are stoked for knowledge, some people on vacation read some others. I’m so excited that you’re all here and hopefully we can build on some of that optimism as well as some of that curiosity. And, so in, in our discussions with programs like art, but he, that funds like really cool innovations in energy and DARPA, frankly, on the defense side.
There’s always these questions of Hey, we are missing. There’s an acknowledgement that like we are missing. 40% of the good ideas. I think that’s what they say. They’re like, we think it’s probably somewhere in there. And it’s a real bummer when we say we’re going to like cure cancer or when we say we’re going to go out and.
Fixed the climate or feed the world. If you don’t have a diversity of ideas, you just, you’re not going to solve that problem. And I have to believe that one of the reasons we haven’t cracked the code on cancers just last year and in 2019. We gave 98% of all the cancer research money from the federal government to like old white dudes.
That’s legit what happened. If you’re really limiting access and limiting the way to onboard and putting all these barriers and big applications and all these things in the way, you really are gonna have a problem with diversity of ideas, you’re going to have a problem with outcomes.
And statistically you’re just like gonna do worse because that’s just how numbers work. I would love to hear your thoughts on stepping a bit away from the billers and backers program and just looking at kind of policy. We have, the United States innovation and competition act that was recently passed to have infrastructure bill.
What do you see as like the future of grant funding? And I’d love to hear your thoughts, there’s an unprecedented amount of money flowing around w what are your thoughts on how. No, my engage in this process from like your perspective on the billers and backers approach, or maybe just your personal perspective and experience.
It’s it’s an interesting moment in that there is a lot of grant money splashing around, so to speak big, huge programs being put in place. And we can talk about some of the really cool parts of those programs and why there’ll be an impactful. But when we think about what is a future for grant funding look like, what does the vision look like?
It isn’t just, quote unquote more money because the money that’s out there isn’t being deployed efficiently, effectively, efficiently impactfully, right? To your point a minute ago. So we have to start with the most fundamental problem, which is, people with ideas, aren’t engaging with grants for.
A lot of reasons. We need to improve the process of, how we can get more ideas funded. And we think about, it’s a complicated, it’s time consuming. It’s bureaucratic from arduous applications to repetitive reporting requirements. Like it’s it’s not always a fun process to engage in.
That in of itself causes a lot of people to go. I, that, that mountain looks too big to climb and not even gonna put on my gear, like I’m just going to go find another hill to climb. And then you have the timing problem, right? Entrepreneurs are, moving fast, experimenting ideating and constantly learning.
And grant-makers are often big institutions with long deliberate processes and long reviews and multiple hurdles. And so it’s not really set up for success. It’s set up for control. And, this becomes, I think the biggest opportunity of looking at this in an entirely new way, right? We’ve talked about, the sort of moment with technology and what that allows us to do.
If you think about, COVID, we had this really fantastic trend emerge of fast grants, and the idea that maybe we could do this a different way. And if you look at like Andreessen Horowitz, did their experiment with baskets. 30 minute application, 48 hour turnaround, 4,000 serious applications is $50 million, 260 grants deployed within days.
That’s unheard of. And actually if you’re a fast company reader, there’s a piece from Robert Downey Jr. Just today on fast grants. In fact, and he’s talking about it through the lens of climate and earth change. So you know, one of the things that, that, that starts to lead us toward is a rethinking of the process, the one of the biggest hurdles that keep people from applying.
But I think that’s only one drop in the bucket because the other bigger step is when we think about bringing in the crowd. W we take a step back and think about this charitable giving in 2020 to 2020 was what? 400 billion, almost $500 billion, half a trillion dollars seed stage venture capital fund.
5,227 deals, 7.2 billion, right? 7.2 billion half a trillion. So imagine if we could take that half a trillion dollars and deploy it in ways that we’re getting comfortable engaging with one another. In other parts of the economy, we’ll get in a stranger’s car because of the Uber platform will let a stranger bring us our dinner because of a platform we’ll buy groceries on a platform we’ll buy cool Christmas presents from complete strangers that are creatives on platforms like Etsy will buy a bicycle from a total stranger on Craigslist or Facebook groups or whatever.
So we’ve become comfortable with this peer to peer engagement and we’re getting comfortable with it in the investment world. Crowdfunding crowds. So crowd philanthropy and crowd grantmaking become really interesting because you take that half a trillion dollars. How is that being deployed today? We call it the United way.
So if you’re a corporate employee and it’s time for the annual, campaign to make your donation, odds are you’re making your donation to United way. And then United way is going to turn around and fight. The organizations of their choice, which by the way, are not usually startups because it’s very hard to get into the United way as a young company with something innovative.
So imagine if there was a totally different way where we could take that half a trillion dollars and to play it directly in this sort of fast grants model. We’re seeing the first steps toward this and shared decision making and engaging community members and peer review strategies and getting their feedback and co-creating programs.
But the really the holy grail gets to the place where you and I, and the crowd are coming together in ways where we are in essence supplanting these big bureaucratic institutions, and really re-imagining how we’re doing grant making through this lens of connecting directly to one another. And that just really becomes.
Really really exciting. And for us that’s a super fit with our disruptive democratize thesis. And it’s not to say, government funding shouldn’t continue and these wonderful grants like build back up build back better. And other programs aren’t helpful because they are, they’re super important parts of our innovation infrastructure, but this is another part of our innovation infrastructure that we could be taking advantage of.
And I think that’s where it gets super exciting.
Yeah. As this is like basically all I think about and and and that’s become a really core to one of the things that we want to drive forward is this narrative and I do want to acknowledge one thing real quickly is that, while we’re talking about inefficiencies I just want to bring up the fact that like the civil servants who are deploying these grants they want to be doing a better job.
They’re not like they’re not like purposely creating the inefficiencies. It’s a it’s policy problems. It’s tools, problems, it’s problems within the actual, like logistical nightmare of doing your bureaucracy and government is very hard. And I just want to acknowledge that because the efficiencies it’s not an attack on these people in particular, but more of a indictment of the process and some of the policies that are in place.
And yeah, certainly it’s one thing that we th we think about a lot is, not only are these groups and foundations where these donations going really, unfortunately not well resourced to do like deployment of capital into innovative spaces and to reach large groups, but they’re really.
When you think about it, there they’re really set up to serve their client, which are the people who are donating. They’re not set up to serve anyone. It’s the other activities they do are just an ancillary kind of like process that they have to do, but it’s not something that they’re set up to do necessarily or designed to do.
And so when we think about the future of funding we’re very much in agreement that what you alluded to it in terms of. Almost like the centralized processes over our network are much more efficient. And now, and this is the really exciting thing that you also mentioned is that like now we have the technology to actually make this happen, which is just amazing.
And you can get openness and control, right? Like part of the reason that the systems are designed, the way they’re designed is nobody wants to be the guy on the headline of the wall street journal, having given grants out to, the company that didn’t need it all up. The PPP loan, we saw all those stories, right?
Nobody wants to be that guy or that gal. So control is important, but with technology, we actually can get openness and control. And so I think that’s what makes this moment a uniquely exciting moment for thinking about how do we build a next generation of something that could compliment what’s already there.
A hundred percent. Before we go a bit deeper, I am going to send them another point. I’d love to hear from all the folks listening, just where you are in your funding process. So let us know, are you exploring things you, are you like, are you locked in, I’m looking at adventure, let us know what’s you’re up to.
And while there while y’all are responding throughout a couple of reminders, if you do have questions, please do drop them into the Q and a tool. And we will dive into those shortly here. Feel free to use that to get in touch. And then I’ll also just note, obviously this will be available as a recording post.
Super exciting. I love the vision that we’ve that you’ve painted here. And it is it is really like in keeping with, some of our goals and some of the things we’re building it, open grants. Do you have any thoughts on, What kind of industries are well-positioned for funding?
And this could be for the builders and backers kind of program or, just generally, are there industries that just don’t fit into this model or is grant funding really for
it really can be for everybody, but it’s not going to always be the same kind of grant or the same source of grant or the same size of grant.
We’re super excited about industries like FinTech, healthcare, education, agriculture, things in our food system. We’re also pretty excited about things and what we call civil society sector. So things that can bring us together as a society and help us build stronger bonds to one another and bonds to our community.
So things like volunteerism and philanthropy would fit into that as well. But really, across the board. What’s interesting is that we’re also excited geographically about what’s changing. So if we think about historically the, Trek west to the coast to make your innovation happen The share of capital, going to Bayer startups is set to drop low 30% for the first time in over a decade.
And when you think about the number of investors that are setting up in markets outside of the sort of major tech hubs, the 700% increase over the last 10 years. So like the idea of. You can have a venture and a promising idea and be able to take it to fruition. You can do it in your home communities becoming all the more real today.
And it’s beautiful because of grants can be an important part of that stack of funding that you deploy. Many states have now created state focused innovation funds, small business funds, startup funds that help you. If you’re doing overseas work, if you’re trying to sell internationally, there’s all kinds of different focuses there’s platforms like open grants or hello, Alice and others that help surface.
The opportunities for you. And I think in a post COVID world there’s actually a lot more grant funding available in the sort of micro grant category that typically wasn’t available for younger companies. Most of the, when I launched my first company, if you weren’t going after, five or $10 million big SBI, our grant, it was like zero or 10 million.
There wasn’t much in between. And now you can go get a $5,000 grant or a $10,000 grant from a variety of programs to help you move to the next stage in your venture.
Yeah, no, it’s super exciting. Between between, the United States innovation and competition act just pouring in another $250 billion with a lot of focus on technologies and competing with China in that market in particular.
And then you have the infrastructure bill where there’s all these opportunities for not only like connectivity in rural communities, but everything from, everything related to infrastructure and a lot of it there’s opportunities to go in and demonstrate and really show what really innovative tech can bring bring to bear in this space.
Yeah, think like talking about this, through this digital era lens and no-code tools, the ability to experiment. All of that makes the assumption that you’re connected to high speed internet, which sadly not enough of the country is today. Being able to get the country connected to, what should be baseline infrastructure today is a critical piece of this, of these bills.
Yeah. And I am super excited. That’s the perfect segue because what I want really want him to get into is like this last discussion point of, and I, myself recently moved into a rural rural community back to a rural community from one side game and back. And and. It was shocking.
I currently pay three times the amount that I had to pay for comparable internet every month. And I’m very lucky to be able to even afford that. And also I had to like rig up a satellite on my roof and it’s not like a big one, but like an antenna really in order to like, make that even happen.
And I’d love to hear your thoughts and this is something that I’m personally very passionate about and also super excited about. Now, what advice do you have for founders and other folks who are, they’re looking for funding they’re maybe in these like rural and what we can call developing in emerging markets in the United States.
Like what do you do if you’re there and that’s your situation? I love to hear your thoughts on like ways folks can engage.
How challenging the last three years have been is that the side benefit is created a lot of programs and funding that can help specific segments of entrepreneurs. So if you’re an entrepreneur and you’re in a, what, we’ll call a non tech hub community, particularly if you’re in a rural community, there are a myriad of programs that have emerged that are just focused on rural entrepreneurship funding entrepreneurs in emerging or underserved markets.
One of the first. I would do is be digging into what are those programs, which ones are relevant or near to me. Are there any in my hometown, are there any in my home state, I’m going to some of these platforms and getting a sense for which of these things might be relevant to me.
Second is if you’re a female founder or you’re an underrepresented or underestimated founder, then there are also programs specifically dedicated to you. There’s been a number of new programs and funding and it become available. So the same piece of advice there, go and do some homework and do some digging.
And oftentimes people will say to me, oh, that sounds so boring. I don’t want to do that. This is, this seems so confusing and complicated. And my answer to that would be few. Think about how much time you would spend. Putting a pitch deck together, figuring out who venture capital investors are sending them your deck and pitching them, take a fraction of that and go do dedicate some of that to homework around non-dilutive funding.
Again, back to where we started. Why would you spend all your time going after the most expensive kind of funding when you can reallocate that time and go after the least expensive amount of funding and, instead of focusing on, I couldn’t get venture, so let me work my way down the ladder.
We should be flipping that and saying, okay, can I get grant funding? Let’s start there and work my way up the ladder because I’m working from least expensive to most expensive. And of course that’s not for every kind of business. Again, like there are certain categories of companies that you just need to go down the venture path because of the scale and the capital requirements.
Take a close look at city grants, state grants, economic development grants and go after that. I’d also just be fully aware of, don’t go in blindly, go in wise. The restrictions around the use of those grant funds venture and other kinds of funding tend to be more open-ended, but oftentimes the grants come with specific things.
You can use that money for specific, expenditures and whatnot and reporting requirements and things like that. So just be aware of, if I’m going to go down this path, this is what it means, but don’t think if you go down the venture capital pathway, it doesn’t mean those things either, because you’re going to have to report to your venture investor.
You’re going to have hard conversations with the VC, like one way or the other. You’re going to have to report to the people who gave you money. And then I would say the last piece is get. This is a rabbit hole that Alice could disappear down and never emerged from. If you don’t really understand this world, you can spend hours and days and weeks reading websites and reading through 80 page grant applications and backgrounds and listening to webinars and hiring or getting an expert can be a super time-saver.
It can help you pinpoint the things that you are and are not, if it for save you time, not applying for things that you don’t fit for and help you put your best foot forward. When you do apply for the ones that you go after. In this area, You do what you’re good at, which is you have your idea, you building your company, find somebody who’s really good at helping you find the grants and give them a big bear hug and bring them into your organization to help you
Now, let me just throw out there too. Cause I see that a lot of you are currently just exploring these opportunities. That is this is just one thing that you can do to put yourself way ahead is just go talk to somebody who knows the space and can help you. You can find those folks on open grants, you can chat with them and there’s no cost to have a conversation with folks about that.
You can also go to like your SBDC or your local P-TECH. And we can send some follow-up information about how to find those. Those are both nationally Nash national organizations that are federally funded to provide you with no cost consulting in this space. So if you just are on some very shoestring tight.
And you don’t want to hire or like potentially engage a consultant. There’s even some really great free resources you can access. But I think, all the things that Donna just pointed out are huge. Just being aware in particular of the restrictions and requirements and all those other things.
But if you take nothing else away from that, definitely have that conversation with someone because there really is, as we’ve alluded to there, there are, there’s more grant money coming out than there has been in, in decades. And it’s the most investment that the United States has made in non-military funding.
And I think in history, but maybe I’m wrong, but definitely in the last, a hundred years it’s more money than it has been poured into the nation for non-military purposes than ever before. There’s huge opportunities, especially if you have new ideas about how to bring things forward or advance the technology or the state of some thing, technology group of individuals.
What have you if you’ve got some good ideas come to the table, And use some of the resources that we’ve talked about today to, bring those ideas forward because it’s really what the country needs. And it’s also a great opportunity to obviously make make some money while while doing something really cool.
Yeah. Don’t be restricted to thinking grants only come from the government, right? Organizations, private companies, banks, big financial institutions, a lot of big brand companies have programs have grant funding that they either are offering are going to be offering in 2022.
I’ve just today had three conversations with major national brands that are planning on grant programs for 2022 COVID has helped everybody recognize the need to jumpstart innovation, the need for more. Young business, more startups, more, competitiveness, more jobs. And a lot of the corporate social responsibility investments that are being made in entrepreneurship, economic development underserved and underrepresented and underestimated founders.
So there’s a ton of stuff coming down the pike on the private side.
Yeah, definitely. So we are gonna open it up and dive into the QA Q and a so feel free to pop over there and drop any any additional questions. While you’re doing that, I’m going to also send out a poll real quick.
Just, getting your thoughts on like your biggest challenges with funding. So feel free to dive into the QA section and I’m going to start I’m going to tackle some of these and some of them are one of the first ones here was just. How, and if we can apply for grants located in Boston from from my side of the table a really quick and easy way to do that would be to create a profile on open grants it’s free and you’ll start getting emails about grants that are relevant for what you’re doing.
And if you say, Hey, in your profile, we’re doing things in Boston, or we want grants in Boston, then let us know. And I, and Donna, I actually was a little unclear and maybe you can shed some light on is the billers and backers program everywhere. Is it just in certain communities?
So you can apply to the program from anywhere. We’re currently taking applications for the cohort that starts mid January. Applications are live. They closed Sunday night at midnight. So if you just go to builders and backers.com, click on the idea accelerator button, it’ll take you there. The applications online it’s five or 10 minute process.
So you could apply for that from Boston. The program is structured so that anybody can take it from anywhere, but we also have some communities that have dedicated seats. So if you live in places like Oxford, Mississippi, Tulsa Oklahoma city, Oklahoma, or Iowa say Iowa, there’s actually dedicated spots held for you in that cohort at no cost because you have a local underwriter that is covering that cost for you. If you’re in Boston, you should apply.
Yeah. All right. So those are some ideas on how to apply for grants in Boston. Another question a new startup that just finished Cleantech open. Congratulations. I took my first startup company to Cleantech open and Lacey was awesome. Ended up exiting it in fact, so good luck to you.
I’m asking, they don’t have a lot of capital wondering if they can get help getting grants not paying as much upfront in the balance when you get funding. The quick. Answer to this question is that there’s a lot of grants that have a specific restriction that you only use the grant money for things and activities that happen after you’re awarded for that grant.
So typically that arrangement doesn’t function very well. However, as I mentioned earlier, there are federally funded groups, including SBDC S and P tax, which are procurement technical assistance agencies. And they will help you with that and they won’t even charge you for it. So it’s a great service.
It’s I was like, I went through two startups before I found out SBDC and the P tax existed and they’re massively helpful, so highly recommend getting connected to those folks. And if you happen to be in LA then I can actually make some of those connections for you. So feel free to like ping me on LinkedIn or Twitter and happy to get you connected up.
A great one for Donna here. Can you give an example of builders and backers giving a small grant to support, testing an idea? And she’s just interested in understanding the practical application of the concept and how it supports idea that.
Sure. Yeah. I give you an example and actually, if you go to YouTube, you can watch videos from some of the builders from our summer cohort.
We’ve got builders and backers, YouTube channel. You can just watch all those are about one minute long, so you get a sense for their experience. So great example would be a way to build her in Winston Salem, North Carolina, that was concerned about the lack of access to fresh produce in a significant part of their community.
And also noticed that the community was surrounded by a lot of farms and wondered how could it be? We don’t have fresh produce when we’re surrounded by farms. Can we somehow marry these things to up? And through the program, took an idea created an idea called mobile market, which is think of a sort of ice cream truck, but with fruits and vegetables instead of ice cream and ended up with a low-fidelity experiment.
Got the truck borrowed from a partner in the community, partnered with one of the HBCUs in the community to help spread the word, put locations up all over the city and developed a stop schedule. And then for a month each day went and bought fruits, vegetables from local farmers, put it on the truck, drove it around to the stops to test.
Would people want to buy fruits and vegetables from the test from the truck? Is there a. Supply and demand to match these things. Is there a sustainable model to do this on an ongoing basis? And it turned out to be a tremendous success. The truck ended up running a sold out of produce every single day, week on week, hundreds of percent growth of sales week on week and a is getting ready to launch as a permanent fixture in Winston-Salem.
And we have other communities now interested in bringing that model to their communities as well. So this one is one that is not a fit for our venture capital structure financing, but is one that we have continued to invest in through other forms of capital. Because we think that it solves a significant problem in a community it’s scalable idea because every community we visit talks about food deserts.
It doesn’t have to be a social impact idea. It can be, have an idea for an app. We’ve got lots of those. So we’re idea agnostic. What we’re looking at is the marrying of problem and idea.
Awesome. Very cool. And we’ll definitely include some links to all these resources folks.
So no worries there. Thank you so much for that. A quick question for you. Donna, this is someone who’s asking, they’ve done. You said they’ve done 200 customer interviews to validate an idea and then build a small prototype would apply to builders and backers. Should they apply to builders and backers and would they be able to use the money for a pilot?
So my answer is maybe so here’s the context. The program is designed to help you run an experiment to validate that your idea works. And what we find is that oftentimes people will go do a bunch of customer discovery interviews. They’ll listen, and then they actually go build it. And then they see.
Will people use it. We want to flip that around so that you can do the customer discovery interviews, but we want you to actually do a low-fidelity experiment to actually see if people use the product and then invest in building the product. Now you’ve already built a small prototype, which is great.
That’s awesome. Yay. I hope that works. And off to the races you go we would probably not be a great fit for you if your objective is I’ve got that prototype. And I just want to go put that prototype into market. If you are open to saying this prototype may or may not be the right thing to run a low-fidelity experiment with, let me learn from the program and let me come in open-handed then by all means you should definitely apply where we have had people who have just looking at this as operational funding to feel what they have already done. We’re probably not a great fit for that.
Awesome. Thank you. Quick one. Here are you talking about grants is direct payments. Entreprenuers are talking about funding for free services for entrepreneurs. So grant funding. And frankly is used for all of the above. And this is one of the reasons it’s important to talk to folks who can help you navigate this space.
So many of the grants that I’ve mentioned are more like a payment, like literally like money goes into your account to spend on business activities. Like SBI are many of those. But there’s also a lot of funding for if you’re like a community-based organization doing economic development, you can get grant funding for those activities as well.
So there’s a really broad spectrum of grant funding. And a lot of what we’re talking about today has to do with not only like getting access to any of that in any context, but also how we might improve the process there. So that it maybe is not so burdensome and ideally more accessible. So I’m going to go ahead and yeah, it’s just a, it’s a big space.
And I see Donna’s typing in some some responses as well. So I’ll scroll down here and could a social voting platform be of interest to the U S government and grant agencies? hundred percent. I actually worked personally with a few companies that are building some very exciting things in that space.
So definitely if you’re doing something in that space, something that the, that we need and, important, so definitely, get into it. Do you think depending on where you are, builders and backers might be a great, might be a great fit. And yeah, check it out. Yeah. Cool. Great question here too. And I just want to throw this out there. Do you know of any funding opportunities specifically for minority owned businesses? So I’ll speak from the government side and a bit from the foundation side on this and then turn it over to Donna, maybe for your thoughts.
But one of the exciting things that we ha are starting to see is requirements policy-wise to include minority owned businesses focuses on underrepresented founders and groups that have classically been underserved in this space. There, there are a lot of programs out there where you can effectively make yourself a little more competitive by putting that foot forward and presenting and participating.
And then there are specific set aside funding opportunities for minority owned businesses as well. So definitely. Like I said, it’s a broad space. My first suggestion, go talk to somebody about it.
Hello, Alice and others are really great place to start. Otherwise you can just spend your time going down rabbit holes. And this dovetails to one of the other questions around, like why would for profit entities want to offer grants? If you’re a big corporation, you have a ginormous budget for marketing and a general market budget for corporate social responsibility.
And oftentimes you also have a foundation or other sort of philanthropic arm it’s through any one of those three entities that corporations tend to do this kind of work. They set a philanthropic agenda. Oftentimes the grants play a role in that related to the kind of change they want to bring out in the world, whether it’s environmental, it causes helping increase diversity and supplier relations, getting more people, starting entrepreneurs, starting companies in rural communities.
And so if you just look through some of these big brands like JP Morgan, chase bank of America, many of the banks have programs. It’s really, for them, it’s a way to help build their brand right. And get their brand out there. It’s all related to mark.
A hundred percent. Yeah. You think about just the massive impact on their bottom line that Patagonia, like Patagonia is in the news, every other, at least every quarter for something related to this.
And they’re a great example where they just invest a lot in this space of, impact related activities. And obviously they they know their demo, right? They’re all, it’s all about sustainability and environmental stuff. And they catered to that exact, like those are the people that buy their stuff.
It’s a very big driver and it’s shown and, across the board to really improve improve the things that they’re looking to drive, which are profits ultimately we are right here at the end of time folks. I’m going to say thank you very much. Thank you all for coming.
Really appreciate Donna and you sharing your time with us today. Thank you so much. And this will of course be recorded and you’ll be able to access this. We’ll send some emails with resources. Donna one last thing, there was a couple of questions about folks who are either outside of the United States.
Wondering if builders and backers is available internationally. And maybe, yeah. If you want to share any closing thoughts and maybe address real quick.
Sure. That’d be great. So the cohort that’s starting in January is USA only, but we will be opening it internationally in 2022. We’ve got a group in Canada that are exploring it now, and we’ve got some partnership conversations underway that would open this up to people from countries all over the world.
Go to builders and backers.com and the best way to stay in touch with that is to subscribe to the regular newsletter updates that come and you’ll get an update on when applications go live. And if there’s any questions that we didn’t get to today that you want to dig into, there’s an email addresses on our website that you can send us a specific note and get in touch and we’ll schedule a time to follow up.
Awesome. Thank you all so much. It is now 1201. So we’re going to go ahead and close this out. Thank you all for attending. Thank you so much, Donna, for not just being here, but also for the awesome work you’re doing and excited, excited for the new year and to see what opens up here in 2022. So thank you all. And until next time, have a lovely holiday season.