What we have learned from raising €2 million from public funds

mads@radiobotics.com

With more than €2 million raised from public funds, we at Radiobotics would like to share some of our learnings and experiences so others also can get started and hopefully be successful on their funding journey as well. In the EU and Denmark, where we are based, we have amazing opportunities to apply for both national and European grant funding. Funding equals traction for a young startup, and traction is key in an early stage to attract attention.

We found that there are several good reasons why you should consider applying for public grants:

  1. It’s invaluable validation of your company and technology.
  2. It’s non-dilutive money (comes with admin though).
  3. You learn a lot throughout the process.
  4. When you get the money, it’s easier to use that as an instrument to raise equity money.
  5. It’s a great way to establish partnerships that can be very beneficial in the future.
  6. It increases the chances of your startup to succeed.
  7. It forces you to make a long-term plan, consider your business potential, and put it down in writing.

Go for smaller grants to gain initial traction

To apply for larger grants of over €500,000, you will normally need to have a lot of traction, including an early product and a team. So generally speaking, the earlier the stage, the smaller the grants. We started our journey by applying for a range of early-stage grants from an EU-funded program called Data Pitch and the Innobooster program by the Danish Innovation Fund.

Data Pitch was an EU-funded open innovation programme bringing together corporate and public-sector organisations. It is centred around a competition with several tracks, which describe challenges set by the data-provisioning organisations, and a six-month-long accelerator programme to help startups and SMEs develop solutions to meet these challenges. We received a grant of €100,000 from Data Pitch and that was just enough for us to start working on the problem we’re trying to solve in a much more focused way. And exactly that opportunity to focus helped us a lot in building Radiobotics in its very early days.

Innobooster is a grant from the Danish Innovation Fund given to companies that wish to develop and make a new product or service ready for the market or to improve a process that increases the company’s competitiveness and creates growth. The grant may also help reduce the company’s project-related risks. However, this programme requires some co-financing, which needs to be documented accordingly.

When writing the applications, you’re forced to be very structured and document your plans and visions. That work has paid off: not only did we receive the actual grant (€70,000 in total), but having everything written down also helped a lot in later growth stages of Radiobotics.

With these grants we were able to start growing our team, advance our technology and build important partnerships in order to then begin applying for further funding. This is where we were also fortunate to get support from the EIT Health programme, which is a Knowledge and Innovation Community (KIC) established by the European Institute for Innovation & Technology (EIT) to promote innovation and entrepreneurship across Europe. We got €50,000 after spending a few weeks putting together an application. With these funds we could grow our dev team — in other words, we were able to hire a ML engineer.

Side note: Figure out your technology readiness level!

Different early-stage funding programmes support companies at different stages. So it is important to understand what stage your technology is at in that perspective. The TRL (Technology Readiness Level) is perceived as an effective way to indicate the development stage of a given technology or product (read more about TRL). As the company grows and moves up the TRL ladder then more and more opportunities will come up. In Denmark, there are a lot of opportunities, most of which can be found at the Innovationsfonden website.

Get help going for the larger grants

Going for the larger grants can be a very time-consuming project and will require insight and knowledge that can appear unmanageable. However, there is a way to overcome this, by basically getting help from external consultants that specialise in helping companies like us with grant applications. This can be expensive, however being based in Denmark, we can actually apply for public funds to get co-financing.

This way, we can get help with managing the application process and writing the grant — and, possibly more importantly, to ensure that all formal requirements are met. Simply speaking, you can apply for money to apply for more money. Such things exist!

So we had the opportunity to apply for a grant called EUopstart, from which we were granted €7,000; these kind grants are available for Danish and Norwegian-based companies and research institutions, and possibly in more countries as well. This funding helped us to work with an agency when applying for the Horizon 2020 programmes.

Once you have established some funds to pay an agency to help you, there are plenty out there that can help you. We teamed up with Catalyze and Innovayt respectively for different applications — my advice would be to find an agency that understands your technology and your case quite well, since this makes it much musier to collaborate on completing the application together. I would also suggest talking to several and get offers from them individually, so you can compare pricing and services provided — this might vary a lot from case to case.

Catalyze supported us in successfully applying for the Eurostars grant, with a total project budget of €1.1 million, split between three partners. Eurostars is a Horizon 2020 funding programme for research-intensive small enterprises that supports the development of innovative solutions and products. Many details and a lot of documentation needed for these larger applications like Eurostars, and Catalyze made sure that all details and documentation were in place. Catalyze specialises in obtaining funding for biomedical and healthcare innovations, so we were a good fit.

Innovayt specialise in helping companies obtain funding for their projects through grant and funding applications. They supported and assisted us in the preparations for the Horizon 2020 EIC Accelerator programme and helped us receive a grant of €1.3 million. This grant will fund substantial clinical trials and testing of our medical imaging algorithms in several countries within the EU. More than 1,800 companies applied for this programme, and less than 2.5 percent of them were awarded a grant. Radiobotics was one of the few to actually make it all the way through the very competitive process.

Working with agencies

The agencies’ business model varies, but is in our experience a mix between an upfront payment or “commitment fee” and a success bonus. The agencies will screen you and your project, since your success also means that they’d get paid (more). Depending on the agreement you make, an agency can help you with several aspects of a grant application, including managing the application process, finding consortium partners when needed, and even project managing and reporting if you get the grant.

Note that commitment fees and success fees might vary a lot, and many agencies are open to discussing different models and levels of engagement, as long as they can see an upside in the collaboration. And remember that everything is negotiable — there is competition among the agencies out there.

Also, expect that it is difficult and competitive to obtain these grants, so it is not unlikely to get rejected several times.When applying I would suggest to expect to get a rejection initially, so you can plan for also using time to adjust the application based on feedback, and resubmit the updated application. Many grants have several openings every year and allow for resubmission — which is also a good thing to remember to negotiate to have included in the services from the grant agencies.

We’ve learned that the validation from receiving these grants can be extremely valuable. Recognition from both public institutions like the European Commission and private investors gives you the most optimal conditions to succeed, because it means that you are vetted from several perspectives.

Creating a technology like we do requires help, input, and international collaborations to ensure it’s relevant. When applying for grants, you are often forced to collaborate with other partners, both other private institutions, universities, hospitals, etc. This is for us a very positive thing, since it enables a way to formalise a collaboration with benefits for all partners, since all partners are receivers of the grant and have well-defined measures of success as part of a project. As a small early-stage company, this can otherwise be difficult to obtain if you don’t have funds to support it, so a grant is ideal.

All these collaborations and funding have been instrumental in forming Radiobotics into what it is today, and we aim to continue to pursue future opportunities. We hope that our experience with EU and national funding programmes can help you and your startup on your way.

Featured image credit: Mauro Sbicego on Unsplash

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