Is it worth taking money from the state? Part 1: Overview

You are thinking of a startup. To be successful, you need to create a product and start selling it. It will take resources to create a product. Where can I get them? When a startup is at the idea stage, it is difficult to attract funding to it. Highly. Investors are in no hurry to take risks, friends and acquaintances too. However, you can attract money from the state. There are two funds for this in the Russian Federation: Skolkovo and FSI . In this article, I share my experience in attracting funding for a project from the VIF.



All cases will be considered based on our own experience in developing the SLONBOOK online recording service , the history of the creation of which I described in the previous article .



Money can not be returned



A grant is targeted funding, usually from the state, which does not require a return, provided that the money is spent in a targeted way.

For example, if you took money to build a bridge and actually built a bridge, then you will not need to return the money. However, if an underground tunnel was built instead of a bridge, the money would have to be returned.



How much do they give



The Fund provides for several different project support programs. Each program is suitable for a specific case. Here are some of the Foundation's programs:



UMNIK : up to 500 thousand rubles for two years. Ideal for a student or graduate student who is thinking about a startup while still at university. The advantage of the program is that the project does not require the creation of a legal entity. Certain disadvantages, well, or peculiarities: a small grant size and a rather long project implementation period (2 years).



START-1: up to 2 million rubles for one year. Suitable for small projects at the idea or prototype stage. A team of up to 3 people is enough to participate in the competition. Submission of an application does not require the creation of a legal entity - its creation will only be required in case of winning the competition. However, if a legal entity already exists, you can also submit on its behalf: the main thing is that at the end of the deadline for accepting applications for this competition, it should be no more than 2 years old.



START-2: up to 3 million rubles for one year. It is a continuation for projects that have successfully completed START-1, but submission is also possible for companies that have not previously passed START-1. Following the results of the project implementation under the START-2 program, it will be necessary to start selling the product for the creation of which the grant funds were attracted. Co-financing is required in the amount of 50% of the amount of the requested grant (up to 1.5 million rubles).



START-3 : up to 5 million rubles for one year. Participants of the competition are required to successfully complete the START-2 program in advance. Also, as under the START-2 program, co-financing is required in the amount of 50% of the amount of the requested grant (up to 2.5 million rubles).



BUSINESS START: 10 million rubles for one year. Suitable for projects that have previously completed any START. It is a logical continuation of the START-1,2,3 program, within the framework of which an innovative product was previously created. The BUSINESS START program, unlike the START programs, does not provide for R&D - the fund's funding is allocated for business development! Co-financing is required in the amount of 50% of the amount of the requested grant (up to 5 million rubles).



Programs, terms and amounts may change over time. The article describes the current data for 2020. Read more on the Foundation's website . Our project was carried out under the START-1 program and received funding in the amount of 2 million rubles. for a period of 1 year.



At the date of preparation of this material, there is a selection of projects for the competition for programs START-1,2,3 with a deadline for applications until January 20, 2021.



What's the catch?



For a startup, it sounds tempting to take the money and not return it. However, not all so simple. There are features on the path of grant money that a budding entrepreneur needs to know. First, you need to get a grant. Second, you need to create a product. Thirdly, it is necessary to report on the work performed and on the targeted use of the grant funds. Only if all three conditions are met can we talk about successful attraction of a grant. Out of inexperience, entrepreneurs consider it a success to receive a grant. But in fact, success is about creating a product and closing obligations to the Fund. To get a grant, you have to work hard. You have to work hard to create a product. But in order to report on the work done to the Foundation, you need to work twice.



Thesis



  • you can attract money to a startup at an early stage;
  • gratuitous financing is possible subject to the intended use;
  • it is difficult to enter the Fund, but it is even more difficult to leave the Fund;
  • when planning work, it is necessary to lay in the time and budget for the preparation of reporting documentation.


To be continued



In the second part I will tell you how to “enter the Fund”: from preparing an application and defending a project in front of an expert council, to drawing up a technical task and concluding an agreement with the Fund. I will outline the features that should be paid attention to at the stage of project protection and agreement conclusion.



In the third part, I will tell you how to “exit the Fund”: all the features of preparing reporting documentation for the stages of work and I will share the conclusions that I made for myself during the execution of work on the project:



  • is it worth it for a startup to get involved in this difficult business;
  • is it possible to master the work alone;
  • in what cases grant money develops the project, and in what cases it slows down;
  • where and how you can insure yourself.


Thanks



I would also like to thank Alexander Loktionov , the founder of LOGA Group , who helped me to timely determine the direction of development of my project and provided significant assistance in preparing the tender documentation for submission to the Fund.



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