There’s a comment on my post about invention grants from last week, asking for more information about grants. The source site for that was the NCIIA, National Collegiate Inventors and Innovators Alliance, which has some grants for companies and for teachers, too.

I may have to rethink grants. I’ve been pretty negative about grants on this blog and in real life. The idea bugs me, I suppose, because there’s so much more talk about grants than there are actual companies around that benefited from grants. In theory, they give you money to help you start your business, but they don’t take ownership interest in return, and you don’t have to pay it back. Sounds great, but it doesn’t happen much.

So I’ve said, and so I’ve written. But then, lately, I’m thinking that maybe I’ve been too negative. I turn around and realize I’ve run into several startups funded by grants lately.

I recently met John Miller, CEO of a company here in the Eugene local area, Dune Sciences, that has received several hundred thousand dollars in grants from two agencies, one federal and one state. It’s a nanotech company that has won grants because of innovation. And last week I was on a panel with Ian Hill, co-founder of SeQuential BioFuels, which has won cash awards for pioneering environmentally friendly auto fuels. Then I ran across Trillium FiberFuels of nearby Corvallis, which won a $100,000 grant from the U.S. Department of Energy for testing a new method for making cellulosic ethanol from fibrous plant material. The press release said Trillium was one of 360 companies receiving a total of $36 million nationwide. Next I read this story, on a Department of Energy Press Release:

WASHINGTON, DC–Secretary of Energy Spencer Abraham announced today that 234 small businesses in 34 states will receive Department of Energy (DOE) grants totaling $102 million to conduct innovative research. The department chose 351 projects from among 1,450 proposals submitted under DOE’s Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The department’s Office of Science administers both programs.

So maybe times are changing. Maybe there are more grants now. And maybe I was just wrong before.

Either way, I’d recommend that if you are looking to start a business with a socially recognized angle to it, maybe you should look into grants.

What’s a “socially recognized angle?” You already know. Science and innovation are big these days, particularly when there’s an environmental angle. Other angles include locations in government-sponsored development zones or green industries, and minority-owned businesses. Give yourself some time to think about this, and maybe you’ll be able to present something in a new light.

Think about how your startup addresses some community goals, social goals or worldwide goals. That might be breaks for minorities, developing depressed economic areas or new innovations. Grants aren’t there just because you apply: They have to do with causes.

Do a good search. There’s the obvious Internet search you need to do, but don’t stop there. Check your local Chambers of Commerce, Small Business Development Center (click here for a list of them), local business schools and local governments. Every time you talk to somebody, whether he or she has a good lead or not, ask whom else you should talk to.

If you do have an interesting opportunity, pay a lot of attention to the grant application. Get examples of previous applications that have been accepted. Pay attention to the grant writing itself; a well-prepared application is essential. Do your homework. Get as much information as you can about what the donor organization wants, what it has awarded in the past and why. Usually this information is relatively easy to find, but people just don’t do the work well.

Tim BerryTim Berry

Tim Berry is the founder and chairman of Palo Alto Software and Follow him on Twitter @Timberry.