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Get a Grant!

Got a great business idea? Scared of investing in case it fails, or don’t have sufficient funds to give it a go? Will it benefit people? Not sure you have what it takes to make it successful? These are a few of the questions you should be asking yourself before you start your own business.

Often people with great ideas have many reasons against going into business for themselves which could be related to structural worries in terms of time constraints, having the ability to delegate tasks to the right people, or simply not sure where to begin. Great ideas need determined while persevering people that take action to bring them to fruition. However, it helps to have the funds behind a great business idea. Getting a grant is the ideal scenario to make those dreams come alive!

Getting a grant is the best way to secure investment funds to develop a viable business as it is cash in the bag. In other words, a grant is a sum of money awarded to a business from the government that doesn’t have to be paid back. It is funding to be used to develop technological advancements by making a business idea a thriving one which helps Brazil's innovative technology and puts them on the map.

The largest city in Brazil, São Paulo is home to more than 20 million residents. Its size and density offer founders a large market and the opportunity to connect with fellow innovators. No wonder there are so many startups popping up there by the highest number by far. There are even several unicorns valued at over USD $1billion each. There are many loan facilities available and if you can convince an angel investor then seed money would be a lifeline to get operations on track for success!

Over the past decade, Brazil’s startup sector has earned the attention of the global investment community and experienced incredible growth. Specifically, more than 22,300 startups have launched in Brazil since 2015, and 30 startups have earned “unicorn” status since 2018. As a result, Brazil has become the largest startup economy in Latin America and attracted USD $9.43 billion in funding rounds in 2021 alone.

Going back to government grants Brazil’s Federal Government calls it lost funds. Therefore, how can a company get such support? A firm needs to have cutting-edge technology which is considered state-of-the-art in the segment of actuation. Something that is on the frontiers of innovation, at least at a national level.

Then, this technology needs to solve a real need of Brazilian society or at least offer a solution to minimize the problem. In other words, for the Federal Government to invest millions in a company, the innovation must have an impact on the country's reality, whether through job creation, whether to solve a serious problem or even to place Brazil on the world map of science and development.

After all, the lost fund (subsidy) is the name given to a non-reimbursable financing granted by the Government. In other words, given money that does not need to be returned. And as there is no free lunch, getting that contribution is not that simple. However, it is achievable with the right negotiation!

The Lost Fund, technically known as a subsidy, is one of the best Government mechanisms for promoting research and technological innovation via BNDES, FINEP, FAPESP, and CNPq, as in such a case the capital contributed by the government is not returned by the companies, which are only obliged to spend it on the development of new technologies (to obtain lost funds for other types of projects).

This nugget of information should be a worthwhile exercise to ascertain the possible application by companies in early-stage development such as aspiring technological and environmentally attractive proposals.

Have a terrific day!

Prof. Carl Boniface

Vocabulary builder:

Grant (n) = A grant is a sum of money awarded to your business from the government that you don't have to pay back. It's awarded to your business to assist in its development, often for a specific purpose. subvenções governamentais

Angel investor (n) = An angel investor is someone who invests their own money in a small business in exchange for a minority stake (usually between 10% and 25%). Angel investors tend to be entrepreneurs or people with extensive experience in the business world.

Seed money (n)= Seed funding is essentially equity-based funding, which requires investors to invest money into the business at the very early stages. In return for the investment, the investor is given an equity stake. An equity stake is a share of the business.

Actuation (n) = propulsion, influence, motivation, passion, catalyst

Ascertain (v) = determine, establish, discover, learn, find out, make certain

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