By Debby Winters
I have people ask me quite frequently how they can get funding for their invention or their small business. Here are a few sources for you to consider.
Source 1 – Grants (local, state, federal, and non-profit)
If you have a small business, then consider the SBIR/STTR program. I have worked with dozens of startup companies that have received $150,000 SBIR grant from the federal government. Using grants as sources of funding are ideal because they are essentially free money. You don’t have to pay that money back and you don’t have to give up any equity in your startup. Of course they are also very competitive and hard to get. For more information go to http://www.sbir.gov/
The best (and free) source to find small business grants from the federal government for a new technology related company is: http://www.zyn.com/sbir/. Did you know you can get free help finding and writing these types of grants? Most states have local developmental centers that know of these types of grants and they can help you find them and apply for free. You don’t have to pay for their services (your tax dollars fund these groups). To find them, Google your state name plus small business or your state name plus SBIR.
Source 2 – Business Plan Competitions
Another great source for small businesses is a business plan competition. There are not only a good source of free money, they often allow you to network and connect with people in your area who can help you with your new business or in bringing your ideas to market. There are local business plan completions as well as ones that you can compete for outside of your area. Besides the money and the networking, these competitions usually offer free mentoring and seminars to help you build your business and develop a commercialization plan. You can find these by searching for your closest city name and business plan competition, or you can try calling your local university technology transfer office and they should know of any competitions on your area. If you don’t mind traveling to compete, there are many in other areas as well. Check out http://www.bizplancompetitions.com/ for ones that might interest you.
Source 3 – Angel Investor Networks
Angel investors are usually wealthy individuals who are willing to invest in very early stage companies or even people with a good idea and a good business plan. The usual amount of their investment is $50,000-$100,000. Unlike the two sources mentioned above, this type of money is not “free”. You will have to give up equity (stock) in your company in exchange for this type of investment. Most cities and large towns will have an angel investment group. The groups meet and the inventors and entrepreneurs come to pitch their ideas. Even if you don’t get funded it’s a good learning experience and most of the angels will try to help you out and maybe put you in touch with people who they think can help you with your new venture. You can search Google or call your closest university technology transfer office and they should be able to tell you if there are any angel networks nearby.
Source 4 – Crowd Funding
Most crowd funding sites allow you to post details about your idea and anyone who likes it can either donate money or pre-order your product or service. This may be a great source of income because it does not make you give up any equity in your company. A popular crowd funding site is kickstarter but there are lots of other sites as well. To learn more, you can go here: http://www.kickstarter.com/help/school/defining_your_project.
Source 5 – State Matching Funds
Many states provide matching funds for investments or tax incentive funds. Google you state and “matching funds for small businesses” to find a list. I’m in Arkansas and we have a number you can apply for. Among these are:
One word of caution is that you should make sure your patent application is filed before you post any details about your invention online. If you need help filing a patent application, contact me.