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Old 22nd November 2009, 03:54 PM   #1
Bizdev
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Default Grants Websites "all Scams"

Quoting two investment experts on msnbc today discussing grants for small business:

Ken Yancey, CEO of SCORE "I've been doing this for 16 yrs and never met anyone that got a grant."

Phil Town, bestselling investing author, "...must be 20-30 websites about U.S. grants. I think they're all scams."

This is what I've been advising entrepreneurs for years...there are no grants for small biz start ups or for for-profit small businesses. Stop chasing those non existent grants.

This is also why I created an alternative funding source. See below.

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Old 22nd November 2009, 08:32 PM   #2
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I agree, most of them are just capture forms trying to build a mailing list to spam you to death.

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Old 30th November 2009, 06:59 PM   #3
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Have to disagree in part - there is a site called idea cafe that offers a $1,000 grant to businesses. Not much money but it is a true grant. There also was a women owned, women run site called count me in that offered grants to for-profit businesses. Even American Express offers small business grants every once in a while.

There are also other ways to get grants. Most federal money is distributed to the states and local government. Thus, if your state or local government can use your products or services, you might apply for a grant from them. Even if they are not soliciting your products and service - you might be ale to talk them in to it - you just have to met their program requirements. I once saw a for-profit company get a city grant to tear down abandoned properties in the city.

There are aslo legitimate grants from the SBIR and STTR programs.

Having said all of that, those sites that tout grants for just anything and everyone or guarnatee them - they probably are scams - but, if you do fit some of these other programs - you still can get grant funds.

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Old 30th November 2009, 09:33 PM   #4
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Phanio, In my haste to get the post out I neglected to add the caveat that I normally include, that there are in fact private organizations that offer contest type grants. Funny you mention Idea Cafe because I applied for that "grant" a few years ago. I also usually mention that these types of grants are quite small, normally not enough to make a dent in a small biz startup. And the competition is fierce. The chances of winning one of these grants (this includes all other sources) is pretty near impossible.

I was referring specifically to government grants. Even business.gov openly admits, as does the SBA website, that there are no government grants for for profit business startups.

From business.gov:

"Federal and state government agencies do not provide grants for starting a business, paying off debt, or to cover operating expenses. Government agencies do not provide "special" grants for women, minorities, veterans or disabled entrepreneurs. The Federal government also does not provide grants to small business owners as part of the Recovery Act...SBA does not provide grants to small businesses...grants are generally only available to non-profits, educational institutions, associations and state and local government agencies. Government grants cover a wide range of activities, from agriculture production to zoological research.
Eligibility for a grant varies according to its purpose and use. For profit businesses may be eligible for some grants, but rarely are these available to small businesses, and they are never available to cover start up costs, debt and operating expenses."

If the CEO of SCORE openly admits to never having heard of anyone getting a grant (for a small business), I would tend to believe him.


Last edited by Bizdev; 30th November 2009 at 09:37 PM.
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Old 6th December 2009, 10:08 AM   #5
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Originally Posted by Bizdev View Post
I was referring specifically to government grants. Even business.gov openly admits, as does the SBA website, that there are no government grants for for profit business startups.
You are of course correct - but that does not mean that you cannot access government grants.

First, there are SBIR and STTR grants - these are specific requests from 16 federal departments.

But, there are also indirect ways - in fact I have been considering writing an article about this - where you can indircetly get grant funding. Most government grants go to state and local government offices for distribution. You can tap these grants this way. Think about the simulus money that was put out for transportation earlier this year. Your city requests some of those funds to improve local transportation. Your local government will then put out requests for bid or quotes for private companies (usually small businesses) to fulfill the need of improving local transportation. You can create a small business around their guidelines and submit a bid for the job. If you win the bid, you will indirectly access those grants funds.

You can even approach your local government and make suggestions. Say you want to start a private cab company to ferry drunk people from bars to homes. You ask you local officals to support your program and request them to seeking grant funding to help you. You tell them that you are saving lives, protecting their citizens and creating jobs. Then, they go and look for the grants for you.

Keep in mind that this is not for every business. If you want to start a new retail store to sell children's toys - may not work here.

While this is not easy - convincing your local government to do this or trying to win bids - starting a small business is not easy either. If we all could just tap free money to start any business we want - we all would be in business for ourselves.

The same can be done with the SBIR and STTR grants. Find out their requirements and either build a business to meet those requirements or modify your current business to meet those request. The government needs products and services from private companies.

Of course you are correct in that for-profit businesses will not usually get direct funding from these programs. But, they can access them indirectly. Further keep in mind that your state and local governments also have similar programs. If you want grant money - you have to play their game - not just think that you should get free money because you want to open a business.

Again, you are correct - grants from companies like Idea cafe are small and hard to get.

Also, keep in mind business plan competitions. While the amounts that can be won from these can be small ($15K to $50K) - they are just like grants (don't need to be paid back) - but, again, you have to play their game to get them.

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Old 17th December 2009, 06:15 PM   #6
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Very informative info here. I always wondered about all the grant promotion. Your new idea for generating a funding source is great. I hope it takes off, how are we going to get the wealthy to find the site. Also, would they get a ownership interest if they donate?

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Old 17th December 2009, 08:36 PM   #7
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Originally Posted by OC CPA View Post
Very informative info here. I always wondered about all the grant promotion. Your new idea for generating a funding source is great. I hope it takes off, how are we going to get the wealthy to find the site. Also, would they get a ownership interest if they donate?
Good questions OC.
No, the plan currently does not include ownership interest for donors. That would be falling back to venture capital modeling. We are simplifying the funding process and cutting out the red tape.

Preneuraholics Unite is targeting entrepreneurs and business owners and the general public for the donations aspect of the plan. While we are not specifically seeking out the wealthy, my hope is that the site will eventually recieve enough publicity that the "wealthy" would hear the message. I would have to assume that that particular sector would not be too keen to donate without expecting monetary reward or gain.

This is fundamentally about entrepreneurs funding entrepreneurs purely for the sake of coming to each others aid by adopting a pay it forward philosophy. The reward to the donor is knowing that they have helped to launch a new small business and done their part to help jump start the economy.

Please see the blog below for more info about the entire concept behind Preneuraholics.com.

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Old 17th December 2009, 10:57 PM   #8
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I like the idea, just a little skeptical on how it would work. It seems that entrepreurs are going to be trading money. Those that need money are both giving and receiving. And if I need money, I probably wont give it.

Now if it gets a huge reach, beyond people that need funding, I could see it working. But I think there needs to be an incentive to give. You mention entrepreurs that made it successful will give back, which I'm sure this will happen to a certain extent. But it will be a while until entrepreneurs that received from this will become successful enough to give back, so who will give right now besides the over generous, successful people who find this website.

Like you said, the rich want a return on their money, or a tax write off and there is plenty of opportunities for them to do both. Everyone donates sometimes, but usually expect a tax deduction in return. If there was someway to spin this into a qualified nonprofit intermediary it would provide an incentive to give, a tax write off.

Looking forward to your thoughts. Thanks for posting this here. Very interested.

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Last edited by sl19; 17th December 2009 at 11:00 PM.
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Old 18th December 2009, 09:24 AM   #9
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SL19 my middle name is "skeptical", believe me I understand your sentiments.

Regarding the thought that someone that is in need of funds and is receiving monies will not also give a donation, look at it this way: just because a requestor may not have $25,000 for their start up cost, surely they have $25 to give to a fellow entrepreneur or two. That is the point of this concept. With the hundreds of thousands of entrepreneurs in search of funding for their start ups, by uniting together with the same cause and goals, we can get each other's small businesses launched. Obviously a requestor cannot be expected to give to all other requestors. But they can pay it forward to one or two others. The assumption is that recievers will feel compelled to give knowing the predicament everyone is in, and understanding that it is the core philosophy of Preneuraholics Unite - Pay It Forward.

I have had many folks that have no plans to request funds already respond favorably and say they fully intend to become donors. They have "been there and done that" and understand completely the difficulties in obtaining funding. They have said they would have been grateful for this when they were in the situation and would hope that others would have donated to their start ups. These same folks have also said they wouldn't expect a write off or a return on their "investment" knowing we are dealing with small donations.

There is a lot of excitement building for this concept. And while it is understood that it will take a while to gain a huge following, I think that with the proliferation of social networking opportunities, this could grow faster than usual. The potential is certainly there.

The only way this won't work if we don't do it. It's all in the power of numbers. It's all in the power of unity.

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Old 31st December 2009, 10:40 AM   #10
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Preneuraholics.com is now LIVE!

If you require funding for your small business, this is a must see site.

Peer to peer GIVING for entrepreneurs.

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