fundingTips

Government guarantee means now is a great time to apply for Horizon 2020 funding

Thousands of British organisations will be pleased to learn that the government has confirmed it will guarantee to fulfil funds due on any Horizon 2020 grants won before the UK leaves the European Union.

This statement will provide a degree of reassurance to businesses at what has become a very uncertain time for the UK economic landscape. Following the announcement of the referendum results many businesses have been reluctant to embark on European funding bids as it was unclear how they would be effected once the exit process began. For this reason, applications from UK companies are likely to have fallen giving the latest applicants the best chance of making the cut.

This commitment gives businesses the opportunity to continue accessing this valuable resource for research and innovation funding. It is particularly good news for small companies who can apply for SME instrument grant of up to €2.5million for early stage proof of concept through to bringing products to market. We encourage all tech companies to take advantage of this opportunity while it is still accessible and would be happy to chat to anyone wanting to know more information about the opportunities available. Get in touch with us at grants@tenshi.co.uk

Tips on Horizon 2020 Funding

This post summarises the key things that you need to be aware of when considering applying to Horizon 2020.

‘SME Instrument – Open Disruptive Scheme’ is the section of Horizon 2020 relevant to smaller companies in creative industries

Most of Horizon 2020 is not suitable for SMEs (small to medium size businesses), but the ‘SME Instrument’ section is specifically there to provide funding to smaller businesses. Within SME Instrument is the ‘Open Disruptive Scheme’ which is relevant for creative businesses.

How much money do they have?

Horizon 2020 as a whole has huge amount of funding.

For the SME Instrument – Open Disruptive Scheme specifically in 2015 they planned to fund 90 phase 1 projects (up to €50k) in 2015 and up to 26 phase 2 projects (up to €2.5million).

When does the fund end?

The fund runs until 2020 (started 2014) but they announce details including themes and submission dates in 2 year sections.

How much money can I apply for?

There are 3 phases you can apply for:

Phase 1 – feasibility study, €50k (70% match funding)

Phase 2 – Innovation project, between €500k-€2.5m (70% match funding)

Phase 2 – Commercialisation & Coaching, no funding, provides support to projects funded through Phase 2

What Phase should I apply for?

It depends on your project, however there is a very strong link between companies who undertake a Phase 1 before applying for Phase 2. The success rate of companies applying straight for Phase 2 is very low.

How long should my project be?

Phase 1 – usually around 6-9 months

Phase 2 – 1-2 years

Phase 3 – On-going

You need to have the potential to grow to a very large company on a global scale

They are looking for companies who could provide benefit to the European Union, so you have to have plans that include scaling significantly.

You have to be doing something genuinely innovative

There has to be something new, for example a new technology, in what you are doing.

You need a solid business plan that focuses on the EU

You must be market ready, so need a solid business plan. Phase 1 is designed to fund you to develop this, so that going into Phase 2 you have it ready. Horizon 2020 is an EU program so your plan must focus on the EU, not just the UK.

You have to already have proven that your idea works

You need to have already developed the project to a point where it works.

You need customers

You need to be able to show strong demonstrable market interest, which ideally means having customers already.

The differences between Proof of Concept and Development of Prototype duringa SMART application

There are three types InnovateUK SMART grants you can apply for. The smallest (up to £25k) is for Proof of Market, and then you have Proof of Concept (up to £100K) and Development of Prototype (up to £250k).

One of the common challenges is understanding the difference between what is required for Proof of Concept vs Development of Prototype. This post breaks down the key differences based on our experience…

Proof of Concept

For a Proof of Concept you should:

  1. Have theorised a technology solution to a problem.
  2. Have reasonable basis (i.e. data) that there is market opportunity (which may or may not have been found through a Proof of Market grant)
  3. Be ready to test your theory by building something that is only advanced enough to prove the concept can work.

Development of Prototype

For a Development of Prototype you should:

  1. Have proven the concept already.
  2. Now be ready for a more advanced demonstrator that is somewhat representative of what your full commercial offering may be, in order to test the market.

Some examples:

  1. You are looking to build software that compresses data 10% better than the current best in market.
    1. Your Proof of Concept will be to create the software that compresses the data, but with no user friendly UI.
    2. Your Development of Prototype will be throw-away code, but have a decent UI and some other features such as ability to upload a file.
  1. You are looking to build a new car that is more aerodynamic that any currently on the market.
    1. Your Proof of Concept might be made out of solid clay, designed to see if it is aerodynamic and whether people like how it looks.
    2. Your Development of Prototype will be a prototype of the actual car, used to find the best manufacturing techniques and test how it drives, but will be scrapped afterwards.

Therefore, both projects involve roughly the same people and skills, and both require engineering. However a Proof of Concept is about creating some software to answer ‘is it even possible to solve my problem that way?’, whereas a Development of Prototype involved building software to test, to validate the market fit and work out how to go about building the full commercial product afterwards.

 

Public grants: What are technology innovation grants?

Public grants are a popular route for companies to get funding to develop products or services. Development of own IP can sometimes be challenging to fund, particularly during the early stages before you can prove the potential of your idea. Public grants are often the best way to find that early stage funding.

An important consideration when applying for a public grant should be that grant funds have a greater reason for existing than just to benefit your company. Often that purpose is to generate economic growth either through job creation, or through technology innovation.

This article is going to look at technology innovation grants, and what types of projects they are designed for.

Grants for technology innovation can often be substantial amounts of money, sometimes up to £100k, but often higher up to £250k and in some cases into the millions. In the UK, these grants are mainly available through InnovateUK (innovateuk.gov.uk) (Technology Strategy Board) and the EU Horizon 2020 program (ec.europa.eu/programmes/horizon2020).

So, what is technology innovation and how does it apply to games?

Technology innovation is defined as the research and development of new or improved technology, developed for widespread use. What this means in practice is that:You need to be developing technology, not a game and not content.

Some examples of what this might be are a new game engine, a Unity plugin that you will sell on the asset store, a specific algorithm, or a standalone tool for part of the production pipeline, for example animation or lighting.

You can develop this technology as part of a bigger project.

For example, you may develop the tool during the production of your game as part of the process. In fact, this is a good thing because the game enables you to prototype and proves that the technology works. The funding is only available however to cover the time spent on technology development, but if part of that is developing a prototype game to prove it, you may be able to get some funding for part of that too.

The technology you are developing does not exist.

You cannot recreate something that already exists. Whatever you are doing must be new, or a significant step forward based on some existing technology.

It must be something that will benefit your industry (or others) as a whole and not just your company.

So you must be intending to, and demonstrate commercial potential, to be able to sell this technology to other companies, to help them as well as help yourself. What this means is that if you are developing something that you only plan to use in-house, to make your games better than your competitors, you will not be able to get technology innovation funding because you are not creating something that can have widespread use.

You need to be developing the technology innovation yourself.

Essentially, you cannot be outsourcing or contracting the development of the technology. You need to show that you have the skills in-house to create the technology; otherwise, it will be perceived that it’s not your team that should be getting the funding, as you are not the ones with the skills to create it.

You should be able to demonstrate why this technology is relevant right now.

Being able to show that there is a need for this technology in your target industry right now is crucial. This usually means that there is a step change in your industry that gives your technology significant potential value, or a problem that your industry has been struggling with for a long time.

There must be significant technical uncertainty that you can deliver the project.

This is the complete opposite of most types of funding, but if you know exactly how you are going to developing the technology and it is just a matter of doing it, then you will not be eligible for technology innovation funding. There needs to be a significant element of research & development, with key risks that may stop you from succeeding. You must have a plan to mitigate those risks, but those risks and unknowns must exist.

Many technology innovation grants are not about getting to market, they are about proving the technology.

This does not apply to all technology innovation funding, however many including InnovateUK Smart Grants (one of the most popular grants for technology innovation) are specifically not funding you to get your technology to market. They are funding the R&D of the technology, after which you can then look to turn it into a full product to take to market.

If your project does have technology innovation, then you should consider applying for grant funding from InnovateUK or Horizon 2020, although be aware that there are other criteria to meet, such as being able to cashflow the project, being able to match fund and proving that you have the team in place to effectively project manage the process.

If you are looking to raise grant funding for technology innovation projects, then you can either write the grant application yourself, or work with a company such as Tenshi Grants who will write the application for you.

Technology innovation grants are not suitable for everyone, many games companies now use 3rd party technologies such as game engines or tools to enable them to focus on building games and content as efficiently as possible. However, some companies focus on building technology and others find that they come across a problem that cannot be solved with existing technology so have to build it themselves. In those scenarios, you are potentially eligible for significant grant funding and should be consider this as a way to fund your company growth.

SMART – A Closer Look

SMART grants are one of the grants available from Innovate UK (Technology Strategy Board) that provides public funding to small and medium sized enterprises (SME’s) that are looking to use technology, science and engineering to push borders and redefine boundaries. Previously known as the Grant for Research and Development scheme, it was designed to do just that, encouraging companies to engage in R&D projects, from which valuable new products, processes and services could be created to contribute to growth of the UK economy.

Technical innovation
Your project must involve technical innovation. That means it is a leap-forward over the current state of the art.

Commercial innovation
Your project must have commercial innovation. That means it must have the potential to change the way that businesses in your sector operate.

Is it risky?
Is your project technically risky? It should be. InnovateUK expect that SMART projects involve technical risk and that they may well fail. If you have a ‘sure bet’ then look for other funding sources.

Of greater benefit    
Will your project help companies other than your own? SMART funding exists to help the UK companies, not simply to benefit you and your business.

For the future
Does your technology have the potential to deliver social, economic and/or environmental benefits? Does it cut carbon emissions, help disadvantaged people in society or help reduce waste for example?

Money
Most of your team need to be direct employees on a PAYE scheme, not contracted. Likewise, director’s dividends do not count as allowable staff costs.

Risky R&D only
Do not aim to take your product/service to market with these grants; they are intended for early stage, risky R&D. InnovateUK would expect that you will fund follow-on product/tech development and market entry with other sources of funding after your SMART project has completed.

SMART support
If you can fund this yourself, do not apply, SMART grants are intended to help fill a funding gap and you must to be able to show that the project would not be undertaken as well or at all without SMART support.

Cashflow
Do not expect to cash flow your business with a SMART grant, it is matched – meaning that you need to find 40-55% of the project costs yourself – and the grant is paid every 3 months after you incur the costs.

Costs
Don’t include any sales, marketing or business development costs. These are not allowable.

Milestones
Be prepared to provide project plans, updates, milestone reports, proof of deliverables and cost claims on a regular basis. Make sure they are accurate otherwise your grant will be delayed.

The SMART scheme has already been of huge help too many UK companies and with funding rounds announced until March 2016 and a further batch planned, will continue to help SMEs to fund R&D projects.

If your company is in the business of “pushing the envelope”, Tenshi Grants can make the application process simple and cost effective for your SME, by helping you to write your application to ensure you meet all the criteria and present your project as effectively as possible. Contact us to talk about SMART grants.

Grant writing – A few of the common problems explained

At Tenshi Grants we see a great many grant applications so we’ve asked our experts to put together a list of common faux pas, highlighting a few of the problems and throwing in some tips to help ease what can be a lengthy and challenging process.

Not reading the instructions and guidelines clearly

Not all funding programs provide clear and concise instructions. Some are very extensive and unwieldy. Whatever they provide, your chances of success are greatly improved if you have read every word several times and sought to understand exactly what is required. We have seen applications fail because they went over word limits, missed mandatory appendices or failed to cover required information. Failing ‘on a technicality’ is painful waste of your time.

Applying for inappropriate funding

Funding generally exists to foster particular industrial activity or to support a particular sector or sectors. SMART funding, for example, is intended to support UK-based, SMEs (small to medium sized businesses) in undertaking early-stage technology research and development. If your organization does not meet all of those elements then you are unlikely to be able gain funding and your efforts will be wasted.

Many companies apply for grants because they are in need of cash. There is sometimes an assumption that ‘grants are easy to get’. Some can be relatively trivial to acquire, that is true.  Other grants (and this most definitely includes SMART and Horizon 2020 funding that Tenshi Grants specialises in) are anything but easy and their assessment criteria will weed out any applications that are not very well suited. A SMART or Horizon 2020 grant is not suited for a company that needs funding to cover a cash flow hole. You are much bett er advised to focus on resolving that issue in more conventional ways such as with an overdraft or by renegotiating creditor payments.

Not devoting sufficient time

Most grant applications will take up a lot of your time if you do them well.  If your main role revolves around delivering projects for paying clients then it is unlikely that you will be able to free up the required time to write a top-class application. When push comes to shove and choices need to be made, paying clients inevitably take priority and your grant application is put off or, worse, you submit a poor application.

Leaving it to the last minute

Never plan to submit close to the stated deadline. It is almost inevitable that the application-writing will take longer than you think and that other priorities will crop up just when you least expect them too. Similarly, it is unwise to assume that the post will deliver your application on time or that the funding body’s online system won’t go offline at the worst possible moment. It happens. We have seen it!

Having the wrong person write the application

Writing a strong application requires a mix of qualities that not everyone has. These include diligence, attention to detail, strong written communication, the ability to be self-critical, research and analytical abilities and creativity. Just because your finance director is great with numbers does not mean he or she is best placed to write your grant application.

Equally, the person who is best equipped in your organization may actually be far too valuable to take away from their normal duties.

Not doing your homework

Sometimes (often) funding comes about because of some local or national political imperative.  Understanding the real reasons why the funding exists and understanding the way a grant-funding body works can be crucial for a successful application. If, for example, the core ambition of the funding body is to create local, full-time employment, then failing to realize that and, perhaps, basing a project plan on utilizing an overseas development team, will inevitably cause problems.

Understanding the assessor as well as the process

Understanding who assesses your application and what process they will apply could offer you better placement when to comes to winning a grant. Is it someone who understands your industry for example? Should you avoid using complex terminology and sector-specific abbreviations?  Will that assessor know what you mean by DAUs, MAUs and ARPPU?

Not understanding the competition

Grant funding is more often than not heavily oversubscribed. Competition to get that ‘free money’ is, thus, highly competitive. Ask yourself; “Is our project or company a good match for this funding?” If your gut feel is that you are grasping at straws then you are probably right.

Get people to review your application

Get as many people as possible to review your application during early drafts and as it approaches its final form. Let them ask dumb questions. It is very easy to be focused on certain aspects and to miss others when you are locked away in an office writing that application. Let others help you improve it.

Always support assertions

If you state that your technology is going to be the best, you must be ready and able to explain why that will be the case and prove it with data. If assessors think that you are making claims that you cannot support they will quickly adopt a very conservative approach to marking your application.

Avoid unnecessarily flowery prose

Do not try to baffle assessors with a stream of techno-babble.  Adopting unnatural language will do far more harm than good. Keep it simple, clear and concise. You are not writing a great work of literature you are simply trying to convey why your project deserves funding. Assessors may be up late. They may well be doing this on a salary or even on a voluntary basis. Do not make then think you are treating them like idiots. You will fail.

Many people out there will happily take a nice generous day rate to write up your application. To what extent is their success aligned with your own?  A good funding specialist will often offer to share risk with you. This generally means that initially you are only liable to cover overheads (cost of sale, marketing, office costs etc) followed by a success-based fee. If the grant funding opportunity you have identified is truly a good match for your project and company then consider hiring an organization that specializes in winning grants and that has the necessary resources to go about applying properly.
If your company’s sphere of activities is in creative media, digital technologies or videogames then having people who have worked in those sectors will bring significant advantages when it comes to constructing a solid funding application.

This is why Tenshi Grants exists. We work with your to write grant applications and share risk on its success. We have the experience in games, creative and digital sectors to really understand your project.