Grants for innovation: the "why" with a dash of the "how".
- Arise Innovations
- Sep 13, 2024
- 13 min read

Welcome
In a world where innovation and technological advances are shaping the future of the economy, start-ups and small and medium-sized enterprises (SMEs) in the deep tech sector often face a crucial challenge: the funding.
In this article:
What are grants for innovation
Typical funding programs
DOs and DON'Ts when applying + expert tips
Helpful tips for a holistic innovation strategy
Bonus material: Further links for self-study + short self-check of eligibility (for download)
New ideas, disruptive technologies and pioneering projects require not only expertise and commitment, but also considerable financial resources to be developed and brought to market. This is especially true for deep tech innovations, which are characterized by high scientific risks, long development paths and barriers to market entry.
Commercial grants offer companies a unique opportunity to realize their innovation projects without being completely dependent on equity or debt capital. These are financial supports that usually do not have to be repaid and are specifically designed to encourage research, development and technological breakthroughs. For companies that are on the threshold of market maturity or whose projects are still in the development phase, grants can be an essential support to mitigate risks and pave the way to sustainable growth.
However, the importance of funding goes beyond mere financing. It is a strategic tool that not only helps companies to increase their innovative power, but also to develop new partnerships and networks. Many funding programs encourage collaboration between science and industry, which gives companies access to valuable know-how and new market opportunities.
Especially for start-ups and SMEs, the use of funding is often the decisive factor in securing competitive advantages and asserting themselves in international markets. However, despite the obvious advantages, many companies remain underfunded because they lack the knowledge or resources to successfully master the complex process of acquiring funding. The right strategy, thorough preparation and understanding of the requirements of the respective programs are essential to obtaining funding.
In this article, you will learn why funding is essential for the innovation process and how you can take the first steps towards a successful acquisition.
Let’s explore together how funding through grants can help your company drive innovation and realize your vision.
What are grants?
Grants are financial contributions provided by public bodies, foundations or private organizations to support the development of innovation, research and technology. They serve as a crucial source of financing for companies that operate in a highly innovation-driven environment and often rely on additional funds to turn their ideas into reality. Unlike loans, grants usually do not have to be repaid, which makes them an attractive way to finance projects.
However, applying for funding requires a structured approach. First, the company or organization must identify suitable funding programs that match their project. Each funding program has specific criteria that must be met, be it in relation to the type of project, the degree of innovation or the potential economic and social impact. After selecting a suitable program, a detailed application is submitted describing the project and its benefits for innovation and development.
Types of funding
Academic funding: This supports research projects that are primarily carried out at universities, research institutions or in partnership with academic institutions. Such funding often finances basic research and creates the basis for technological developments (Technology Readiness Level, TRL: up to 4) that could be used in the economy in the long term. Well-known programs include the German Research Foundation (DFG) or EU-wide programs such as ERC . In addition, there is a wide range of options for financing spin-offs from universities and research institutions using funding. A prominent example in Germany is the eXIST framework.
Commercial funding: This form of funding is aimed directly at companies, particularly start-ups and SMEs, that develop application-oriented innovations. They are awarded as grants and do not cover the total costs of the project. The aim is to finance the development of new products, services or business models that can be brought to market in the short term. Typical frameworks include the Central Innovation Programme for SMEs (ZIM) or KMU-innovativ , which specifically support SMEs with innovative projects, or the EIC Accelerator , which promotes groundbreaking European innovations.
Aim of funding
The main aim of R&D funding is to accelerate research, development and technology transfer in companies and institutions. By providing financial resources, companies are supported in researching innovative ideas and bringing them to market maturity. Funding not only makes a financial contribution, but also encourages cooperation between science and business. Particularly in technology-driven sectors such as artificial intelligence , sustainability or life sciences, funding plays a key role in covering the high development costs while minimizing the innovation risk.
Funding helps companies to remain competitive while addressing social challenges, such as climate change or digitalization, through technological solutions.
Why is funding acquisition essential for innovation?
Funding acquisition plays a central role in the innovation process as it enables companies to finance their research and development (R&D) projects without being entirely dependent on equity or external investors.
Another advantage is risk reduction . Innovations often involve high financial risks, especially in the early stages of development when the success of the project is still uncertain. Funding helps to spread this risk and reduces the financial burden on companies. This means that technological breakthroughs can be pursued with significantly less economic pressure.
In addition, many funding programs specifically promote cooperation between companies, universities and research institutions. Such partnerships provide access to additional resources, expertise and networks that can significantly increase the potential for innovation. Collaboration with external partners not only helps to accelerate research processes, but also increases the likelihood of projects being successful through the exchange of knowledge and technologies.
Success factors for a successful application
Successful funding acquisition requires thoughtful and strategic planning . Companies should plan their innovation projects for the long term and ensure that they are in line with the requirements and goals of the available funding programs. This means that innovation projects are structured early on so that they meet the criteria of the programs and at the same time support the company's goals. However, it is very important not to bend your vision and your own integrity too much just to get funding. In the long run, it is better to wait for a more suitable program.
Another key to success is the right choice of funding programs . It is crucial to identify programs that are tailored not only to the industry, but also to the specific level of innovation and development phase of the project. Each funding program has different focuses, whether it supports basic research, market launch or technological development. Carefully selecting the right program maximizes the chances of success.
Finally, consistent communication plays an essential role. When submitting an application, the innovation project must be presented clearly and transparently. It is important to formulate the goals, milestones and potential benefits of the project precisely. Funding bodies must understand exactly what innovation is being pursued and how it contributes to economic and social development. Clear and convincing communication can often be the decisive factor in determining whether a grant is approved.
The most common mistakes in funding acquisition
Applying for funding is a strategic process that requires more than just formal correctness. Many applicants fail not because of a lack of innovation, but because of avoidable errors during the application phase. Here are the most common stumbling blocks - and how to avoid them:
Incomplete applications: the underestimated complexity
A common mistake is submitting incomplete or inaccurate applications . Many companies underestimate the administrative effort and level of detail that funding bodies require. Funding applications usually have to not only describe the innovative idea, but also include detailed plans on financial, technical and organizational aspects. Missing or unclear information can lead to the application being rejected - sometimes even without a chance of improvement.
Expert tip : A common weak point is the financial plans. These must be precise and understandable, but at the same time allow flexibility for possible changes during the project. It is worth involving a financial planning expert such as Arise Innovations , who specializes in grants, in order to create a realistic and grant-compliant calculation.
Lack of fit: Applying blindly
Another problem is that companies often choose funding programs that do not exactly match their innovation area or stage of development . The variety of funding opportunities can be overwhelming, and many companies apply to programs that are not optimally suited to their needs. This leads to a mismatch between the goals of the program and the projects submitted.
Expert tip : Before applying, companies should develop a funding strategy based on their long-term innovation plan. It is important not only to consider short-term funding needs, but to choose funding programs that support the entire lifecycle of the innovation - from research to development to market launch. Use advisory services, e.g. from Arise Innovations , or special funding databases to find the programs that fit both your innovation sector and development phase.
Failure to comply with the funding criteria: the little things count
A critical mistake that is often overlooked is not following the detailed funding criteria . Many companies ignore specific requirements or assume that they can be easily modified or handled flexibly - which is often not the case. Funding programs have strict requirements regarding company size, project scope, geographical relevance or technology focus. Formal aspects, such as correctly completing application forms or meeting deadlines, can also determine success or failure.
Expert tip : Many companies overlook the fact that it is not just about meeting the basic requirements, but that detailed and structured documentation of project risks, milestones and success indicators is crucial. Include a risk analysis in your application that shows that you have identified potential challenges and taken precautions to overcome them. Funders prefer projects that clearly demonstrate how they manage risks and maximize the chances of success.
Delays and unclear schedules: timing is everything
Many companies make the mistake of underestimating the timeline for their project and the funding process. A funding application should contain clear milestones and realistic timelines that take into account both the development phase of the project and the submission and evaluation periods of the program. Delays or unrealistic deadlines in the application can jeopardize a project right from the start.
Expert tip : Create a timeline with buffers that allow for unforeseen project delays. You should also take into account the processing times of the funding agencies. Some funding programs require several months to evaluate. Make sure that your project plan matches the funding programs' decision and payment deadlines.
The process of acquiring funding
Successfully acquiring funding requires a clearly structured process divided into several crucial phases. Every company should prepare well for the process in order to maximize the chances of success.
Research
The first step is to conduct extensive research into suitable funding programs. The aim is to find programs that fit both the company's innovation strategy and the specific project. Companies should consider not only national programs, but also European and regional funding opportunities. Important criteria include the degree of innovation of the project, the company sector and the funding conditions. There are special databases and platforms that can help identify the right funding programs.
Expert tip : To save time and find the right programs, it is helpful to use specialized consulting services or databases that can search and filter all available funding programs.
Application
Once a suitable program has been found, the actual application process begins. This step requires the submission of a detailed application that clearly sets out the project objective, planned steps, timeline and expected results. In addition to the actual project information, financial planning and technical documentation must also be submitted. Depending on the program, there are strict deadlines and specific forms that must be filled out.
Expert tip : Make sure that your application is precise and well structured. Applications often fail not because of the content, but because of the lack of clarity or unclear wording. Use templates and sample applications to optimize the formatting and structure.
Review and approval
After the application has been submitted, the review phase begins, in which the application is evaluated by experts from the funding program. The examiners analyze the technical feasibility, the degree of innovation and the potential economic benefit of the project. Depending on the program, this process can take several weeks to months and consist of several stages. During this phase, it is important to be available for queries and to provide any additional requests for documents quickly.
Once the application is approved, the company will receive a commitment and a detailed overview of the next steps, including disbursement of funds and reporting obligations during the project.
Expert tip : Prepare for the evaluation by setting out clear success criteria and risk management strategies in the application. Thorough preparatory work can make all the difference when the application is evaluated.
What funding programs are there for companies?
Companies seeking funding for their innovation projects have access to a wide range of programs offered at different levels and for different sectors. These funding opportunities can be roughly divided into European , national , regional programs and tax incentives .
European funding programmes
At the European level, there are programs such as the EIC Accelerator or Horizon Europe that focus on groundbreaking innovations and long-term research projects. These programs are aimed at companies that develop technologies that have the potential to change entire industries. Start-ups and SMEs with a high degree of innovation in particular benefit from these funding opportunities.
National funding programmes
In Germany, there are a number of national funding initiatives, such as the Central Innovation Programme for SMEs (ZIM) or KMU Innovativ , which specifically support small and medium-sized enterprises. These programmes are designed to support companies in various development phases, from research to the market launch of new products.
Regional funding programs
In addition, many regional programs offer financial support targeted at specific industries or local needs. These grants can be a valuable addition to national or European programs, as they often offer more flexible conditions and are tailored to the needs of smaller companies in specific regions.
Tax incentives
In addition to direct funding, there are also tax incentives such as the research allowance , which provides companies with retroactive relief for their research and development expenses. These incentives are particularly attractive because they are easier to access and do not require lengthy application procedures.
Requirements and focus of the programs
Each funding program has specific requirements that must be met. These can relate to the size of the company, the degree of innovation of the project or the industry. In addition, each program has its own focus, be it technological development, sustainability or internationalization. The large number of programs and their different requirements often make it difficult to find the right funding opportunities.
Our added value : To save companies this effort, Arise Innovations offers a free eligibility check . With our comprehensive and simplified search, we also identify the optimal funding programs that are tailored to your innovation project and accompany you on the path to successful acquisition. Contact us today to find out more.
Funding acquisition as part of the innovation strategy
Funding should not be viewed in isolation as a short-term source of financing, but as an integral part of a comprehensive innovation and growth strategy. Companies that use funding in a targeted and strategic manner can strengthen their innovative power in the long term and sustainably increase their competitiveness.
Long-term perspective
Funding enables companies not only to finance individual projects, but also to pursue long-term development goals. By embedding funding programs in their innovation strategy at an early stage, companies can ensure that they have continuous access to financial support for their research and development. This allows technological breakthroughs to be developed and launched on the market in a stable financial environment. Companies that pursue a clear funding strategy are able to relieve the burden on their R&D budgets in the long term and thus plan larger, lower-risk innovation projects.
Integration of funding into the financing portfolio
A successful innovation strategy is based on a balanced financing portfolio in which grants play a key role. Grants complement sales, equity, debt and venture capital by closing financial gaps and reducing risk. Particularly in early development phases, grants can preserve equity and thus reduce the financial burden on companies. This leaves more funds available for other areas of the company. Grants can also act as a lever to attract additional investors. Investors often view a project supported by grants as less risky and therefore more attractive. In addition, the grants granted are often seen as a "preliminary test" of innovation and feasibility, which appears to minimize risk for investors.
The combination of funding with private sources of financing creates a robust basis for the growth and success of innovative companies. A well-planned acquisition of funding makes it possible to secure and steadily expand financial stability and innovative strength over the years.
Tips for a successful application
Applying for funding is a complex process that requires careful planning and strategic thinking. Here are some key tips to help businesses maximize their chances of success when applying:
Early planning
The key to success is early planning . The sooner a company starts to incorporate funding into its innovation strategy, the better it can prepare the application process. Early planning makes it possible to identify the right programs in good time, prepare all the necessary documents and submit the application on time. Companies that only tackle the funding process at the last minute run the risk of missing deadlines or submitting inadequate applications.
Expert tip : Plan your innovation projects at least a year in advance, taking into account the application deadlines of the relevant funding programs. However, working with experts like Arise Innovations can help you reach the goal even at shorter notice.
Expert support
The requirements for funding applications are often complex and vary depending on the program. Companies that get expert support from specialized consultancies such as Arise Innovations benefit from comprehensive expertise. Such consultancies have in-depth knowledge of the requirements and expectations of funding bodies, know the optimal programs and know how to maximize the chances of success. In addition, they often offer partial or complete resource relief through proven processes and systematic work. They accompany companies through the entire process - from identifying funding opportunities to submitting applications and project documentation.
Expert tip : Take advantage of the free initial consultation to get a well-founded assessment of your eligibility and to check which programs best suit your goals.
Networks and cooperation partners
Funding bodies often prefer projects that rely on collaboration and cooperation with other companies or research institutions. Building a strong network and involving relevant partners not only increases the innovative power of the project, but also the chances of success of the application. Collaborations with research institutions or other innovative companies can provide access to additional know-how and resources, making the project more attractive to funding bodies.
Expert tip : Invest early on in building a network of partners who can support and enrich your innovation projects. This not only improves your chances of receiving funding, but also strengthens your company's long-term competitiveness.
Conclusion
The strategic acquisition of funding is an indispensable tool for companies active in the field of innovation. It not only offers financial support, but also opens up opportunities for risk reduction and collaboration with leading partners from research and industry. Through careful planning and the integration of funding into the innovation strategy, companies can secure their long-term competitiveness and successfully bring their projects to market maturity.
Recommendations for action :
Plan early : Start researching suitable funding programs early and integrate them into your innovation strategy.
Seek advice : Leverage the expertise of specialist consultancies such as Arise Innovations to simplify the complex application process and maximise your chances of success.
Establish cooperation : Actively search for possible cooperation partners from science and industry to make your projects even more attractive to funding bodies.
Prepare applications carefully : Make sure that your application is complete and clear and attach great importance to compliance with the requirements of the funding programs.
Download now your free self-check help for grants eligibility:
By implementing these steps, you lay the foundation for successful funding acquisition that will advance your innovation projects and sustainably strengthen your company.
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