To an early stage startup or nonprofit, any amount of funding can go a long way. According to USA Spending, the U.S. federal government allocated $6.8 trillion toward grants and fixed charges in 2020. While this number may seem comically large, it’s important to realize what it means for you—there’s a lot of funding available if you’re tackling humanity’s greatest challenges, and the public sector wants to spend it.
To give you an idea of what this can look like, we’ve compiled a short list of popular companies that have benefitted from grant funding (there are thousands more, this is just a tiny sample).
- Zendesk won a grant from Singapore’s Economic Development Board in 2019 (undisclosed amount) to support workforce development in the region. The grant helped Zendesk double its product development and engineering team over three years, hiring more software engineers, product managers, devops engineers, security engineers, user experience researchers and program managers.
- mHUB won a $500,000 grant from the U.S. Economic Development Administration (EDA) in 2016. The grant was for organizations focused on fostering innovation and helping entrepreneurs build businesses and create new jobs. They used the funds to help build the mHUB facility, support education programs and assist in securing advanced prototyping equipment. In 2020, mHUB won another $1.3 million from the EDA, which will be received over three years to scale services that connect entrepreneurs, engineers, designers, developers and other skilled innovators with small-to-medium enterprise manufacturers to accelerate R&D and bring new physical products to market faster.
- ProtonMail won €2 million in 2019 as part of the European Commission’s Horizon 2020 program, which has distributed nearly €80 billion across Europe to encourage scientific research and technological innovation. With this grant, ProtonMail states that “The EU has now clearly signaled its support for privacy rights and is betting on Proton Technologies to deliver a European answer to the data mining monopolies of US tech giants like Google. In summary, we have not just gained a meaningful amount of funding, but also a powerful ally in the tough battles to come.” The European Commission has specific requirements for the use of funds, and this funding is mostly earmarked for building technologies for ProtonDrive, as the EU would like to see an expansion of the Proton product offerings to enhance their global competitiveness.
- Talkspace was awarded close to $7 million in grants in 2021—nearly $4 million from the NIH’s National Institute of Mental Health Small Business Innovation Research (SBIR) Program, and a $3 million NIH R01 grant—to examine the experiences of tele-mental health and tele-therapy services for patients. Talkspace will partner with the University of Washington’s School of Medicine Department of Psychiatry and Behavioral Sciences and Paul G. Allen School of Computer Science & Engineering, and Mental Health America. This research will focus on the efficacy of tele-therapy as America experiences a mental health crisis with limited accessibility to in-person behavioral health services due to the COVID-19 pandemic.
- UserTesting received a £3.2 million grant in 2020 from Scottish Enterprise, Scotland’s national economic development agency, to create up to 70 new R&D roles in Edinburgh and drive growth in the Scottish technology sector. The funding will help strengthen UserTesting’s product R&D department based in Edinburgh, enhancing the platform’s capabilities, and supporting international growth as UserTesting expands into more European markets. UserTesting, a San Francisco-based insights company, launched its European headquarters in July of 2019 after recognizing the city’s potential as a European centre for technology.
You’ll notice the international nature of some of this funding. These are great examples of what’s possible when you treat governments as partners and view your market from a global perspective. Grant funding can be much more than a simple capital transaction—it can (and generally should) be the start of a public/private partnership that benefits large swaths of a society. All stakeholders—public and private—want similar outcomes, and oftentimes those outcomes are only accomplished by working together.
It’s not only startups that receive grant funding though. Most of the world’s largest and most successful companies have received multiple rounds of grants, and many reapply annually depending on their geography and the work they’re doing. Notable companies that have and continue to receive grants include SpaceX, Tesla, Moderna, General Motors, Frito-Lay, Sprint Wireless, Amazon, and Toyota.
The bottom line here is that grants can be incredibly valuable for the right organizations, and are worth exploring for nearly every entrepreneur (for-profit and nonprofit). They are no silver bullet, but they do offer much more than just capital. Grants are a great introductory relationship to the most powerful stakeholders in your market (public sector leaders), and can be an ideal catalyst for the launch or growth for your organization.