Overview

Grants provide capital without requiring repayment or equity dilution. For founders building mission-driven businesses or serving underinvested communities, this type of funding creates financial stability that lets you build on your own terms.

Grant funding supports hiring, product development, R&D, and local economic activity. It removes the pressure of immediate revenue generation or venture-scale growth expectations. This stability shapes what you build, how quickly you can move, and which opportunities you can pursue.

Grants reward preparation. Funders look for founders who demonstrate clarity about their work, alignment with funding priorities, and capacity to execute. As you gain experience with the application process, each submission becomes faster because the foundational elements remain consistent across programs.

What you'll learn:

• Where grant funding comes from and what each source prioritizes

• The major categories of grant programs available to founders

• Common barriers that prevent access (and how to navigate them)

• How to identify which funding sources align with your stage and mission

Where Grant Funding Comes From

Grant capital flows through multiple channels, each with distinct priorities and eligibility criteria.

Federal Agencies

Support innovation, workforce development, scientific research, and national economic priorities. Programs like SBIR and STTR fund early-stage technology and product development.

State Agencies

Focus on job creation, regional economic development, and community programs. Often more accessible than federal programs for founders just entering the grant landscape.

Local Agencies

Invest in neighborhood development, small business growth, and community vitality. Check sizes are typically smaller but timelines are faster.

Private Foundations

Fund work aligned with specific missions: gender equity, education, health, environmental justice, or community development. Application processes tend to be clearer and more founder-friendly than government programs.

Corporate Programs

Channel resources through supplier diversity initiatives, community investment, and corporate social responsibility programs. Eligibility often ties to industry sector or demographic focus.

Knowing which source aligns with your stage, mission, and business model determines where you should focus your effort.

Federal Grants: High Competition, High Reward

Federal programs like SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) support research-driven companies developing new technologies or products with commercial potential.

SBIR/STTR structure:

• Phase I: $50K-$250K for feasibility and proof of concept (6-12 months)

• Phase II: $750K-$2M for development and commercialization (up to 2 years)

• Phase III: Non-SBIR funding for scaling and production

Typical success rates: 10-20% depending on the agency and topic area.

Federal grants are competitive, documentation-heavy, and slower to close (often 6-12 months from application to award). They work best for founders with technical projects, strong research infrastructure, or partnerships with universities or national labs.

Other federal sources include:

• EDA (Economic Development Administration): Regional economic development

• DOE (Department of Energy): Clean energy and climate tech

• NSF (National Science Foundation): Deep tech and scientific innovation

• USDA: Agriculture, food systems, rural development

State and Local Grants: More Accessible Entry Points

State and local programs prioritize job creation, regional growth, and community development. These grants are often easier to access than federal programs because:

• Application timelines are shorter (2-4 months)

• Award sizes are smaller but meaningful ($10K-$100K)

• Eligibility requirements focus on local impact

• Review processes involve fewer bureaucratic layers

Many founders receive their first grant award at the state or local level, then use that proof of concept to pursue larger federal or foundation funding.

Examples:

• Small business development grants through state economic development offices

• Workforce training grants for hiring and upskilling

• Community development block grants for neighborhood-based businesses

Private Foundations: Mission-Aligned Capital

Private foundations fund work that aligns with their stated values and priorities. These programs often have clearer eligibility criteria, faster timelines, and more transparent review processes than government grants.

Well-known foundation programs:

• Cartier Women's Initiative: Women-led businesses with social or environmental impact

• Eileen Fisher Women-Owned Business Grant: Women founders in fashion, textiles, or social enterprise

• Amber Grant: Monthly $10K grants for women entrepreneurs

• Echoing Green Fellowship: Social entrepreneurs addressing systemic inequality

Foundation grants typically range from $5K to $100K, with some multi-year fellowships reaching $500K+.

Founders who clearly articulate mission alignment and demonstrate community impact tend to perform well with foundation funders.

Corporate Grants: Supplier Diversity and Community Investment

Corporate grant programs support small businesses through multiple channels:

Supplier diversity programs
Large corporations allocate funding to businesses owned by underrepresented founders (women, BIPOC, veterans, LGBTQ+). These often come with procurement opportunities alongside capital.

Community investment programs
Banks and corporations fund businesses that strengthen local economies, create jobs, or address social challenges in specific geographies.

Industry-specific programs
Tech companies, retailers, and financial institutions offer grants tied to their sectors (e.g., fintech grants from Visa, retail grants from Target).

Corporate grants typically range from $10K to $250K. Timelines vary widely but are often faster than government programs (2-6 months).

Common Barriers to Accessing Grant Funding

In this lesson, we also go over the common barriers that often prevent founders from accessing grant funding, along with the structural patterns that shape those barriers.

What's Next

The next lesson covers how to research and identify grant opportunities that align with your business stage, mission, and structure. You'll learn where to find opportunities, how to assess fit, and how to build a pipeline of targets worth pursuing.