Tuesday, June 29, 2010

Good Reminder from Paul Jones: The Hidden Costs of "Free" Grant Money for Innovators

I'm happy to announce that Paul Jones, an attorney and highly connected champion of innovation with lots of experience helping startups, now has his own blog where he posts about innovation, startups, and the like. One post that caught my eye is "Grant Money: When “Free” is not “Free”." He discusses the temptation to pursue government grants to help a new business, and points out the downsides to taking the free money. He scores several good points. Be sure to read it. In conclusion, he says this:
Now I am not suggesting that grants shouldn’t be part of a good start-up’s financial model. But the financial model should serve the needs of the business and it’s investors, not the needs of grant writers. So by all means, use grants – sparingly – to establish credibility. And, if from time to time you run across a grant opportunity that actually dovetails nicely with your real business needs and timing, by all means go for it. But if you ever find yourself thinking that getting grants is what your business is all about – well, don’t tell that to your investors.
Wise words. Thanks, Paul!

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