Daniel Robinson, evaluation manager at Nominet Trust, provides his 7 top tips for tech for good startups looking to raise funding.
The imaginative use of technology to tackle society’s biggest challenges has the potential to change the world, from education and employment to humanitarian aid and healthcare.
But despite most tech for good enterprises beginning in the same way as commercial startups, many traditional VCs and investors are dubious about the potential of ‘not-for-profits’ to scale and grow. Grant funding therefore has a vital role in social technology innovation. It can support the higher costs and risks of early stage R&D and later, help projects to access larger pools of impact investment.
But with such strong competition for limited funding, how can you maximise your chance of success? Here are our seven top tips:
1. Problem definition
Many applicants struggle to fully explain the nature of the social challenge they’re addressing. Instead of describing ‘top-level’ problems e.g. the ‘UK has high levels of youth unemployment’, funders want a credible explanation as to ‘why?’. You need to demonstrate a real expertise and understanding of the issues being tackled. Without detail on the root causes of a social challenge, it becomes difficult to explain why your proposed solution will be successful (and where others failed).
2. Tangible social change
The strongest applications are clear about the social change they intend to bring about, how they will achieve it and how they will demonstrate their effectiveness. Sometimes applications provide vivid explanations of a social challenge and detailed plans of activities, but they neglect their intended results. A useful tip at this early stage is to identify in your application what changes you will measure and what measurement tools you will use.
3. Demand not need
During funding applications, you might be asked for evidence of demand for your product or service. A common pitfall here is reiterating the social problem and the need for solutions. What investors want is evidence of strong interest in your solution. Surveys and interviews can be useful but have limitations. The best thing is evidence generated through testing functioning digital prototypes with people affected by the social problem you’re addressing.
4. Differentiation
Applications that appear similar to what investors have already funded, or what already appears to be available, will struggle in very competitive funding processes which prioritise innovation. Although it is unlikely any application is entirely unique, what is important is proactively demonstrating awareness of other products and services that compare to you and why your idea is different and more effective.
5. Meet the criteria
Your application might be brilliant; there’s a clear need, demand, solution, etc. But there’s one problem! You didn’t check the aims and assessment criteria of the funding programme and your stage of development is too early or late. With such competitive processes, and to avoid wasting your own time, make sure you meet the programme criteria.
6. Team expertise
Naturally investors evaluate whether applicants have the skills, experience, capacity and contacts to deliver their proposal. A common pitfall is to focus heavily on the details of the project and overlook who will be delivering it. Most applications received by investors are likely to come from organisations that they don’t know. Therefore it is important to use the application process to sell both your idea and your team.
It is also important to detail the partnerships that will be critical to the delivery of the your proposed project. It isn’t enough to just name your partners. Describe clearly how committed those partnerships are, and what specifically each will bring to the project.
7. The detail
In such competitive processes the materials you submit are your opportunity to demonstrate that you have the skills and competencies to manage a complex, detailed and fast-moving project. Answering questions fully, making sure your figures add up, and including all the supporting documents requested, as well as avoiding the pitfalls detailed above are all ways that you can make the best application possible.
Tech for good has come a long way in a short space of time, with many charities and social tech startups making exciting progress towards impact at scale. But the sector still needs the wider investment community to adapt to its distinct needs and risks, that don’t fit so easily with traditional investment structures designed for commercial delivery. To move forward, the sector needs greater discussion and collaboration between funders and social tech teams. But in the meantime, although there are no guarantees, following our advice will give your grant funding applications the best possible chance of success.