How to finance your innovation project? How do you go about finding the money for your project? It’s not just about banks, thankfully! Whether you are a start-up at the beginning of your project or a manager in a large company, the question of financing always arises. And that’s where it all ends for a lot of projects that could have been successful if they had had the money. As mentioned earlier by our experts Gaspard and Phoebé, there is however a wide range of financial assistance for all projects that have an innovative idea.
The question that brings companies to us is often the same one: In this jungle of financing opportunities, how do I know what aid I am entitled to?
The problem: Finding the right support for your project
What is the right kind of aid? Can I request more than one source of aid? How to choose between grants, loans, repayable advances, etc.?
Choosing the right kind of aid
Finding the grants for which you are eligible and choosing the most profitable for your project requires a knowledge of financing that is not something that you can come by overnight.
For example, although open to all companies, the French Research Tax Credit (CIR) has a precise definition of research and development. It is also important to be aware of the intricacies of how the CIR is calculated and legal changes in this area.
Beyond tax aid, it might seem that a grant is the ideal solution. However, grants often mean a high level of competition between applicants, and thus a low success rate.
On the other hand, reserve fund recoverable advances and loans for innovation are much easier to obtain.
Practically speaking, the right type of aid for you will depend on your actual need and the how advanced your project is. Types of aid:
- Grants, created to support risky but high-potential projects before or during their launch.
- Tax exemptions, to reduce R&D and innovation costs once the expenses have been incurred.
- Recoverable Loans or Advances, to get the money you need to speed up development. The advantage of these various instruments is that they can be used as the project progresses, depending on your needs: recruitment, purchase of equipment, subcontracting, etc. In France, you can often repay the loan or advance later, when the first profits from your innovation are made.
Planning for the long term
An innovation project is a long, arduous process that is divided into successive stages:
- Market research
- Technological feasibility
- Market launch
Each phase has its corresponding types of aid.
For example, you will be able to obtain grants to validate technological feasibility, and then a Recoverable Advance to support development.
The SME Instrument (Phase 2) or the Innovation Competition may be an excellent way to pave the way for the production of your innovation.
Approaches such as “I need such a sum to get started and then we’ll see” will inevitably lead you into a dead end.
All phases of an innovation project are costly and you would not want to run out of money just before the launch…
The solution: the Dynergie method for obtaining aid
Each innovation project can find sources of funding.
But you have to be careful how you go about it! There is a whole set of particular features specific to each financing mechanism, and finding your way around requires real expertise
This is why Dynergie has developed its own method:
- Identify the project’s level of “maturation”;
- Find and select the types of aid available at this stage of the project;
- Support companies in preparing and submitting applications;
- Provide follow-up and support the company until it obtains financing.
Step 1: In-depth analysis of the project
Before seeking the aid available, it is essential to have an overview of the project, its various stages and the related investments.
This involves understanding the characteristics of the project, how it is innovative, the partnerships being considered, the financing needs in terms of development, etc.
We thus determine together what stage your project is at:
- Research project with results expected in the long-term
- Project under development with workable results in the medium term
- Advanced project requiring pre-market testing
- Mature and developed project
Step 2: Selection of relevant types of aid
Once the progress of the project has been established, we look for and select the appropriate type of aid.
How? There are no shortcuts: only experience and constant monitoring of existing schemes by a qualified financing provider can ensure that an opportunity is not missed.
To finance your project, we will thus:
- Research existing funding (national/European calls for proposals) in the field of the project. This will also make it possible to identify the parties in the sector likely to invest in your project or to provide funds.
- Analyse the compatibility of these calls for projects with yours. Several major criteria may be considered: project objectives, the level of innovation of the project, the maturity of the project, budget, project duration, geographical area, the ability of the project leader to carry out the project, the economic benefits, etc. This analysis makes it possible to categorize the financing according to its level of compatibility with your project.
This selection stage is vital to validate the key elements of your project and target the most appropriate type of aid based on your needs.
Step 3: Initiating applications for your project!
Once the suitable type of aid has been selected, you will be provided with a list of possible sources of aid for your project.
From this point on, we will work with you to decide which type of aid to request for your project, depending on the risks, the complexity of the application and the chances of success.
This is the point where we work with you to make the applications. From the preparation of the applications to their submission to the appropriate bodies, we carry out the entire application process until we obtain the necessary funds to finance your project.
Need to finance your project? Call on experts.
Finding the right funding requires a well-defined approach, constant monitoring and lots and lots of time.
Many applications for grants and tax credits (CIR/CII) are extremely complex and time-consuming to prepare on your own. And no, knowing everything about your own company and your accounts is not enough!
It is essential to know exactly what the selection criteria are and how each aid system works in order to have a chance of being selected and receiving the funds.
If you don’t want to invest huge sums of money to hire finance experts and carry out these requests in-house, it makes good economic sense to call on a partner to support you through the process.
Above all, however, you need to know whether your project is eligible, and if so, for which grants or types of aid. Contact us: that’s what we’re here for! We will provide you with a free assessment of the types of aid you can obtain to finance your project.