What I learnt from my first startup: Lesson 4, Do Good, and thou shall get EU grants (well, maybe).
This is the fourth of ten snapshots capturing what I learnt building my first startup. I published it first on LinkedIn.
So the company was set, a nice website developed, the idea roughly defined and a first client was in sight. Now money was needed.
And there is the goose that lays golden eggs… her majesty Europe and her grants.
For those who are not familiar with this system, we’re not talking about loans, or equity investments, but a generous “gift” from the Union to help you do business. It of course comes with lots of administrative stuffs, but at least, you remain bootstrap, and therefore free to pivot if needed.
Among the EU grand, the one you’ll hear about first is Horizon 2020, which is the pinnacle of what startups are looking for. Lots of money, but little chance (around 15,%) to get in, and it is only for company post “A round”.
Besides 2020, there are hundreds of small programs, with grants between 20 and 100K€, but the competition is fierce between all across Europe startups, and the way companies are being chosen is far from being transparent.
When a startuper has finished filling the 20 to 40 pages application, the document is sent to freelance judges, paid by the union and completely external to the funding program itself. They mark the document on couple of topic, without having to explain why, and then an average is calculated and a threshold set.
A nice lottery?
Well, it looks like that, but from what I have seen of the companies selected is that they are “making the world a better place”.
Smart city, anti pollution systems, car pooling etc. are the trend now.
Our company was about optimising digital content (especially advertising) by leveraging contextual data, such as the weather.
We were asking Europe to fund something that would help e-commerce website to sell more. One day, someone told me “so you want to get some money to make the devil warmer?”. Needless to say that finding a grant has been a tough process (even though we were sometime successful).
This prospective is the opposite to what private investors meeting are about. Of course the pitch starts by the big idea “The World would be a better place if…” but that is not the keystone of the discussion.
These two approaches form a good balance, but for lot of startups (including us), it is triggers a schizophrenic behaviour, sometime difficult to maintain.
And it raised another question; we said previously that the team comes before the product. In my next venture, I think I’ll test grants applications first.
What do you think?
>> I now head Canabava, a marketing agency helping startups building their brand, defining marketing strategy and developing digital communication tools. While we manage projects from Stockholm, the creatives and developers are located in India (where I lived for 5 years), allowing maximum cost/efficiency. Contact me at email@example.com to get more info.