A science-based startup rarely follows the fund raising model of typical tech-based startups, where they go from angel round to a seed round, then go through a few priced VC rounds all the way to an exit event. Typically they need more incubation time than traditional equity-based funding sources are willing to provide.
Science-based startups can benefit from investigating non-equity-based funding sources like federal contracts and grants, grants from non-profits, competition prize money and the like. Here are some examples.
- The SBIR/STTR program, with 11 participating government agencies as of July 2017, has provided over $2B of grants which funded over 4000 projects in 2016. See our FAQ section on SBIR/STTR here.
- The Department of Energy (DoE), which also participates in the SBIR program, has its own grant solication process under their National Energy and Technology Laboratory (NETL).
- USAID is the lead government agency that is working to end global poverty. They also have their own grant solication process.
- The Gates Foundation will award grants for research areas of interest. Most of their grants are awarded to non-profits.
- Venturewell partners with lead universities and provides small grants as well as training programs to help innovators commercialize their technologies and scientific inventions.