Five things for SMEs and Startups to consider when applying for InnovateUK SMART grants
One of the highlights of the past year at iPushPull was winning our first SMART award from InnovateUK. Winning the second was even better (well, it was a lot more money!). Both grants have helped us fund our ground-breaking research and development work in the fields of security and encryption. We’re aiming to integrate the results of these projects into our existing product line, expand our offering into new areas and hopefully gain some IP in the process.
InnovateUK (formerly the Technology Strategy Board) is the branch of UK government responsible for funding, supporting and connecting innovative businesses. They run a wide range of funding competitions, many of which are targeted at specific technologies or problem areas. If you can’t afford to wait for the perfect competition for your product, the SMART awards for SME innovation might be right up your street. These competitions are run every two months.
Since we won the awards a number of people have asked us for advice about the grant application and management process. There is plenty of information on the SMART website and I advise you to read it all. But here are some things a start-up should consider before applying:
- Applying for a grant is simply a matter of completing an application form. This form is fundamentally an exam paper, with each question worth a set number of marks. So pretend you’re back at school, read the questions carefully and make sure you answer what you are being asked (especially the questions about finance). The system rather laughably suggests that the form will take around an hour to complete – set aside a week or so to get it right.
- There are three types of award, each for a different stage of a project’s lifecycle. A Proof-of-Market project leads neatly into a Proof-of-Concept, which leads in turn into a Development-of-Prototype. You can apply for any of these in isolation but, if possible, think strategically and maximise the amount of grant you can claim by starting with a Proof-of-Market project and taking it from there. And make your application for the next stage easier by shaping your project’s deliverables to match the inputs InnovateUK wants for the next project stage.
- On the topic of deliverables – InnovateUK will want sight of the deliverables you tell them you will produce, even if they are just internal reports. So consider what is going to be valuable to your business and don’t over-promise.
- SMART grants are a great way for start-ups to get investment without giving away equity. But they can only part-fund your project – you have to provide a significant proportion of the money from your own company funds. So perform a cash flow analysis up-front to make sure you’ll complete the project before running out of money. And don’t forget that…
- Winning a grant may reduce the amount of R&D tax credits you can claim. The rules are complex – ask your accountant for help!
I hope this article doesn’t put anyone off, but I hope I’ve shown that applying for a grant is a more nuanced decision than it might seem at first. Good luck!