Seven hacks to win grant funding for your climate-tech startup - with Helena Merk from Streamline Climate
How to find and win non-dilutive funding in climate-tech
Hi, we’re Florian & Shaneez and welcome to our newsletter, Down to Zero. We speak with leading VCs, entrepreneurs, and experts how to build a successful climate-tech company. Follow along to learn their playbooks and how you can apply them to further your career in climate-tech.
It can cost billions of dollars to develop climate technologies, from lab-scale R&D to CAPEX-intensive commercial deployment. Thankfully, climate-tech startups can rely on an increasingly broad climate-tech capital stack with cheaper non-dilutive funding besides equity financing.
But how do you win non-dilutive funding, such as government grants?
We sat down with Helena Merk, CEO and Co-Founder of Streamline Climate. Streamline helps climate tech startups find and win non-dilutive funding with their AI-powered grant discovery and drafting platform.
Based on our conversation with Helena, we’re sharing seven hacks to help you increase your chances to win and benefit from government grants.
#1 Be proactive, not just opportunistic.
The grant journey begins before you spot a grant chance. Grants go to those who fit exactly into who it was defined for. That’s why it’s critical to engage early with those who have the potential to shape upcoming areas of funding.
Helena notes that those who “benefit the most from the Inflation Reduction Act are entrepreneurs who were able get involved in shaping these policies in advance.” Even with limited runway, proactively shaping grant policies is “really the only way to play in the grant world.”
Our hack: Email the program managers listed, share your project, ask for clarification, and expect a response within 24 hours. They're there to assist you and can be a valuable resource. As Helena says: “Grant program managers are on your side; use them as a resource.”
#2 Uncover diverse grant opportunities.
Don't rely on a single source; actively seek out grants. Diversify your strategy by targeting local and state grants, which may be less competitive, but are often more difficult to uncover. Here, research and community involvement are key to increasing your odds of success.
Our hack: If you’re on a budget, use free platforms like grants.gov or OpenGrants.io which serve as a repository for grants from many different sources. Speaking to your government representatives can be another great way.
#3 Focus on fit.
Grants are typically very specific in scope. Don’t apply to grants where you need to bend your company’s narrative. Grants favor those who precisely match their criteria. You won’t win.
Stick to your R&D roadmap and prioritize what the company truly needs. Don't design your R&D roadmap around grants. Instead, get involved early in shaping grant policies to your advantage.
Our hack: Language models like Streamline Climate’s (even their free version!) can assist you in thoroughly understanding grant requirements and assessing fit.
#4 Ensure eligibility.
Check eligibility before applying for grants. This sounds obvious, but is the single biggest reason that grant applications fail. Criteria may be scattered across lengthy announcements, sometimes spanning over 100 pages.
Our hack: Build a spreadsheet checklist that covers grant requirements (must-have’s, nice-to-have’s, don’t do’s) and evaluation criteria. Use this to create a template and outline for your grant application.
#5 Plan ahead.
Begin your grant applications early; last-minute submissions rarely succeed. For a lot of grants, you will want partners. For significant grants, preparation can span months, but with pre-existing resources, writing can still take 50 to 100 hours.
Review the solicitation for project narrative guidelines, which may not specify sections but will outline what to include. Be thorough, as some grants provide clear grading criteria within the solicitation.
Our hack: Reach out to past awardees to learn from their best practices. Helena recommends: “Every single past awardee is made public online and you can ping them. Figure out who is the PI on the specific grant, ask them for help and how they won it.”
#6 Diversify your funding strategy.
Recognize that grants may not fully fund every aspect of your project; they might cover people but not equipment, for example. Be prepared to secure additional funding sources for the uncovered parts.
Also, most founders don’t realize that grants are typically funded on a reimbursement basis. That necessitates working capital to fund the startup’s activities before government funds come through.
Our hack: Working capital can usually be funded by getting a loan from banks with proof of the award of the government grant. Also, specialized startups like Enduring Planet can help cover this temporary funding gap.
#7 Prepare for negotiation and reporting.
Be prepared to negotiate terms after securing a grant. This can cause delays and demand several hours per week.
Once terms are settled, spend the money, document expenses, and report milestones. Outsourcing reporting can save time and ensure accuracy and compliance, reducing the risk of funding delays.
Our hack: Double and triple check your receipts that you submit in your reports to make sure they comply with funding requirements. You don’t want to be that founder who accidentally included a beer in their receipt and lost funding for a whole quarter (listen to the podcast for the full story!).
Other resources
There are plenty of other resources available to help you on your grants journey. Four great resources are:
Streamline Climate’s blog and AI-based tool to help with grant discovery, drafting and management.
CTVC’s grant materials.
Climate Finance Solutions, the leading grant consultancy for climate finance planning and grant writing.
Enduring Planet, who offer bridge capital to successful grant awardees. They offer webinars and blog, and are working on a database of grant opportunities