I’m not a fan of government grants.
In the past I’ve used them for startups and they’ve always been a bit of a pain. The paperwork is ridiculous, it takes too long to get through and often the money runs out before you’ve finished your project.
They also come with lots of strings attached; you need to work with certain contractors or use specific suppliers — and there’s always the catch that if you don’t finish on time or don’t reach your target, then the Government takes back all your money!
On top of all that, the amount of funding available is always very small — often just a few thousand pounds. So the grants are really only useful for small projects that aren’t going to cost much.
So why do they exist?
The government wants to encourage people to be entrepreneurial and get involved with small business. By providing a small amount of funding, it’s more likely that someone will take a chance and start something new. And if they don’t make it, it’s not costly for the government. In fact, I think these grants are really just a way for the government to give something back to its citizens who may be struggling in tough times. I know many people who have used these grants as a real lifeline when they were in trouble — and thank goodness for them, because without them they may never have started their own business.
So if you can find a way to get a government grant for your startup, I’d say go for it. But don’t rely on them. You’ll be disappointed.
I prefer to rely more on private investment. Private investment is much more flexible and you’re not tied to specific suppliers, contractors or timescales — although there are still risks and strings attached!
If you’re building a business that’s going to be huge and profitable in the long term, then it probably makes sense to go after private investment — but make sure you have a good business plan and some kind of proof that the idea will work before you approach an investor. You’ll probably need at least S$200,000 from somewhere in order to make it happen (and preferably more).
In conclusion, know that when you start a business, there will be times when you’re struggling. You need to make sure that you plan for these times and don’t get yourself into a position where you’ve got nothing left to fall back on. Get some savings, either from your own money or from private investment, so that you have something to fall back on. Don’t rely on grants. They’re almost certain to come with strings attached, and if you don’t finish on time or don’t reach your target then the government takes all your money back.
Finally, don’t rely too much on your own money either. It’s better to bootstrap your startup with your own cash than sell everything you’ve got and lose all your savings along with it!
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.