Did you ever see those commercials about how the government wants to give you free money? Government grants go unclaimed every year! The government wants to give you money!
Yeah, that’s a lie.
The government does not want to give you money. You have to knock the government down and wrest the money out of its grubby little hands while it fights you kicking and screaming.
I’ve told many people that the process of getting grants is simple – you sit down at a word processor and slice open a vein. It’s not EXACTLY that painful but it is certainly not a simple process. While getting investor funding isn’t a simple process, either, it is vastly different.
First of all, the government is smarter than you think. No, really, I’m serious. Very smart people will read your proposal and they are selected because they have some expertise in whatever you are proposing. If your project is a new type of fertilizer, you can bet there is someone reading your proposal who is an expert on manure. Investors are equally smart and they MAY know a lot about your field – or they may not. You might be pitching your new fertilizer to the guy who invented contact lenses. Well, actually, that was Kevin Tuohy and he died in 1968, but you get the idea.
The biggest difference, to me, is that with grant proposals, everything is specified:
- How long your proposal should be – down to the details like the minimum size font,
- The due date, down to the minute – Close of business, Eastern Standard Time (which is usually 5 pm but sometimes specified as an earlier time)
- The exact components that should be in your proposal, in order, and the maximum points awarded for each of these.
- The amount of money to be awarded.
- Where and how your proposal should be submitted.
With investors, nothing is specified. How long should your pitch be? Depending on the group, it can be anywhere from 30 seconds to 30 minutes. When will a round close? Well, you can set a specific date. Theoretically, you can open up another round the next day. There are some components you should have – people want to know who your team is, how much money you expect to make. Some investors may think your team is more important. I’ve heard others say, “Screw team! I want to know about your product.” Still others, don’t seem to care at all about your team or your product. They just want to know how much money you made last week and how much money you’ll be worth in the next year.
While grant funding is usually allocated and there will be grants awarded, investors might decide they just want to keep their money. Or, they may decide to fund more than you had intended to raise.
What investors do you pitch, how and where? It’s not like everyone lines up on the third Tuesday in September to talk to a guy named Bob.
It’s not that one is easier or better than the other, but grant writing and raising funds from investors are two vastly different activities.