How to Raise Money for Your Business - Part 1: Grants & Programs

Quick’s Design & Construction is what I called my failed business. My 20-year-old self started a construction business with the goal of paying my rent while completing my engineering degree. I was young and energetic with 6 years of industry experience. What could go wrong? Three years later I was selling my tools, trailer, and other acquired assets wondering how I had failed so hard at every aspect of business.

With diploma in hand, I was ready to move on and never think about my burned business again. I could put the late nights, early mornings, empty pockets, and headaches away for good.

Now that I am an intellectual property (IP) attorney, I think about my previous construction business almost every day. As I listen to entrepreneurs and startups talk about their struggles, concerns, and questions, I recall mistakes I made. I lacked the knowledge and the resources to be successful in business. I had no idea what LLC formation was. I assumed I could bootstrap the whole operation, because I thought that’s how everyone did it. I didn’t even know all the resources I needed were right under my nose.

At the time, I was attending a top university with a renowned entrepreneurship program and with funding for startups like mine. Mentors and teachers were ready to explain to me how to form an LLC or other corporation. Funding from grants, micro-loans, and business loans were hanging like fruit on a tree. Like fruit hanging from a tree, all the funds I needed for tools, trailers, LLC formation, trademark registration were waiting for the application with my name on it.

Financial concerns are the biggest for any entrepreneur, startup, or fortune 500 company. Bootstrapping works for a few, but for many, funds need to be raised. As an IP attorney, I hear the same concerns over and over; “I need money for equipment”, “I need to raise money for manufacturing”, “I need to raise money to secure IP rights”. The money is available; we just need to look in the right place.

This post is the first part of a four-part series. First, I’ll discuss Grants. Grants are free money - everyone wants free money. Second, I’ll discuss the micro-loan options. These are low, usually super low, interest rate loans up to $50,000 depending on the state you are in. Third, I’ll post about bank financing, which will include a blip on seller financing. Bank financing is anything from $50,000 up into the millions. Finally, we will venture into equity capital.

The programs and resources I’ll discuss in this series will include national and state level programs. The state level programs will be Iowa specific, but it's likely you can find a similar local program in your state. Feel free to reach out to BW's Intellectual Property Team if you need help finding any local programs or have other questions.

Without further ado, let’s talk about free money.

Grants ($1,000-$1.7 million)

I’m starting with grants and programs not because they are the easiest to get or get into. It is quite the contrary. However, grants are free money, if you are willing to invest in time. These programs almost always involve an application process and sometimes extensive application processes. Let’s start with the heavy hitters. Eleven federal agencies give away about $2.6 billion (that’s with a “B”) every year. Although truckloads of money are available, these grants can be a challenge to obtain. One statewide resource in Iowa that helps folks get this free money is the Iowa Innovation Corporation (II Corp.).

SBIR/STTR

The Small Business Innovation Resource (SBIR) and the Small Business Technology Transfer grants are geared toward innovation and technology. These funds can be hard to attain and often involve a long report.

II Corp. assists with obtaining and securing federal funding through the Small Business Innovation Resource (SBIR) and the Small Business Technology Transfer (STTR) grants and contract programs. The II Corp. also offers pre-and post-award support.

II Corp. is a great organization to get connected with if you have a technology or innovative purpose driving your business. These heavy hitters can help obtain large grants and in some cases offer matching perks, going dollar-for-dollar.

For more information or to get started, contact:
Anne Price / anne@iicorp.com

Also, the II Corp. website has a lot of information:
https://iicorp.com/

Amber Grant for Women ($1,000-$11,000)

Every month, this program awards $1,000 to a women with a small business. Business women from Iowa and all around America are eligible for this grant. This free money is sometimes awarded to more than one person each month. Meaning the program isn’t limited to only $1,000 per month. At the end of every year, the 12 winners from the year are also eligible for a $10,000 grant. This grant is a great example of getting some free money. If you need a quick $1,000 to help cover some monthly expenses for your business, it may be helpful, but if you need a $50,000 piece of equipment, you might have to keep searching or explore a micro-loan.

For more information, visit:
https://ambergrantsforwomen.com/business-grants-women-iowa/

Main Street Iowa Challenge ($15,000-$75,000)

Another thing to keep in mind is that the State of Iowa issues grant funding every year for businesses and others. One interesting grant available this year is for folks starting and/or maintaining brick and mortar businesses located along the main streets of Iowa. This grant is available until September 21 of this year.

For more information about this grant, visit:
https://www.iowagrants.gov/insideLinkOpps.jsp?documentPk=1465245270610

To see what other state grants your business might eligible for, visit:
https://www.iowagrants.gov/outsideStorefrontList.jsp?type=Grant

CyStarters ($6,500-$13,000)

Iowa State students or recent graduates are eligible. CyStarters is a 10-week accelerator to help them focus on their startup or business idea. Participants receive $6,500 for an individual or up to $13,000 for a team. Participants spend a summer dedicated to achieving their startup goals and pursuing entrepreneurial aspirations. The selection process is competitive as the program has a limited number of spots each summer.

For more information, visit the website:
www.isupjcenter.org/programs/cystarters/

For questions about the program and how you can get involved, contact:
Diana Wright / dkw@iastate.edu

Lorentzen Student Hatchery (up to $10,000)

The Lorentzen Student Hatchery of is a program aimed at fostering student startups. Drake University students of any major, including undergraduate and graduate students are eligible. Teams can earn up to $10,000. The program does have a prerequisite. Students must either take Entrepreneurship 101, attend the Startup Boot Camp, or display equivalent knowledge.

For more information, visit the website:
http://www.drake.edu/cbpa/centers/lorentzenhatchery/

For questions about the program and how you can get involved, contact:
jpec@drake.edu

Student Accelerator ($3,500)

The University of Iowa student accelerator aims to drive the startup process for students and increase their chances of success. This 8-week summer program is available to any student currently enrolled in an undergraduate, or graduate program, or recently graduated. The program offers additional money during Final Pitches on Demo Day.

Other University of Iowa programs that provide grants include Founders Club and Innovation Medical Innovation Group (IMIG). Both are available to students or recent graduates to help with various other items such as medical innovation and other product development. IMIG provides an opportunity to compete and win funding which supports commercialization of a product.

For more information on the student accelerator program at the University of Iowa, visit:
https://www.iowajpec.org/studentaccelerator

For more information on the Founders Club, visit:
https://www.iowajpec.org/foundersclub

For more information on IMIG, visit:
https://www.iowajpec.org/students/student-ventures/iowa-medical-innovation-group

If any of these opportunities fit your needs, get started! Free money is waiting.