Funding a business idea is a major challenge for startups. Alongside the ‘dragons den’ routes of angel investors, crowd-sourced funding and pitches, grants are a less glamorous but potentially effective route for early stage research and proof of concepts.

The major route to innovation grant funding in the UK is Innovate UK (previously the Technology Strategy Board). It is the UK Government’s innovation agency, whether for UK or EC Horizon 2020 funded projects. Innovate UK grants can provide an SME with funding ranging from 100% of “pre-industrial Feasibility Study” costs to 35% of “Experimental Development” costs.

Getting to grips with grant terminology like this is one of the first hurdles you will have to overcome.

Regular quarterly SMART awards provide £25k – £250k funding to SMEs to engage in proof of market, proof of concept and prototype development. For example I am currently helping a Somerset firm develop a new testing instrument for the tyre industry, with the grant helping pay for trials and development that would otherwise have been impossible to fund.

Larger scale competitions are aligned to priority research themes, funding 1-2 year projects of up to £1-2m. Understanding these priorities and finding those that match your business ideas is a critical first step.

“Do your homework and networking to understand the aims, competition and key players”


Do your homework and networking to understand the aims, competition and key players. Priority areas likely to interest TechSPARKies include digital economy, creative industries, health and care, and the Future Cities Internet of Things. Joining the Connect forums will help you identify relevant grant competitions (Connect is Innovate UK’s open innovation social platform you will need to join to get the application form or see webinars about competitions).

Larger competitions typically require you to bring together a consortium of companies. For an SME this can be a great way of getting wider market exposure, meeting and working with larger companies and universities. Being part of a research project is a great way of getting through doors that would otherwise be closed: most people who would turn down a sales call are interested and flattered to be asked to help with a research project.

What’s the catch?

So where is the catch to this free money? The weight of form filling and administration that comes with the role isn’t so great. Agile, lean startups may baulk at the admin and bureaucracy: the overhead may simply be too great.

With many applicants chasing the grants you will have to tightly align your project to the competition aims to beat some stiff competition.

Understanding the “exam question” is critical: so networking, doing your homework and knowing the organisers is invaluable. Your existing plans and pitches are an essential input, but experience shows every word will need changing to fit the application form so be prepared for some late nights.

Where to start? Check out the Innovate UK website and join the Connect network for the areas that relevant to you. I am always happy to talk to people considering innovative projects and grant funding.

Michael-YoungmanMichael “Grants Ninja” Youngman leads the Technology Delivered consultancy based in The Guild, Bath.

This year he has applied and managed delivery of three Innovate UK funded projects, securing £177k grants. He is currently awaiting the outcome for an application for a £996k project for beacon software company blispa