Over the years of being in a startup, I have my fair share of working on government grants for both my startup and clients’ startups.
Describing the whole experience as “bad” is an understatement.
The two most recent ones I encountered are the government’s D-Biz and BUD program. Distance Business Program (D-Biz) is a grant introduced to help businesses survive Covid-19. BUD funding program helps businesses expand overseas (mostly ASEAN markets) by providing them funding for “Branding, Upgrading, and Domestic Sales”.
As a seller of software systems, D-Biz not only lengthened our sales cycle, but also added a lot of uncertainty in closing clients. Here is what we found:
- Leads would inquire just because there is this “free money” from the government and wouldn’t even want to put an effort in filing the application.
- Some would wait until the funding has been approved before any discussions about the contract.
- Even quality leads’ sales cycles are dragged on longer to the point that they just gave up and directly signed with us before any funding was approved.
As an applicant for BUD funding, it presented enough obstacles that I am seriously suspecting that the success rate would be terribly low for SMEs. Here’s what we found:
- Its review process is biased towards more traditional businesses. Case in point: We were questioned on why our website redesign costs are so high and comprise a big chunk of the total funding. For anyone working in the software tech sector, this is a no-brainer. The website is everything a software business has as there’s no physical presence.
- A lot of manual paperwork is required in the review stage. Phone calls, Microsoft Word documents with “v3”, “v4”, “v5” appended to documents that get passed around back and forth between different parties. The entire process is generally quite messy and inefficient.
With that being said, I seriously wonder if there is a better model for government grants. How can it be easier, fairer, and more fraud-resistant?
