10 mistakes to avoid when applying for R&D grants

  • By Leyton Benelux
    • Feb 08, 2023
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10 mistakes to avoid when applying for R&D grants

Leyton has ample experience with R&D grant writing. Based on this experience, Leyton identified 10 common mistakes when writing an R&D grant application as well as tips and tricks to avoid them.

Do not underestimate the technical knowledge of the evaluators. Analysts working for the authorities all have a scientific background at university level. In addition, they are generally specialised in a particular field and see dozens of projects per year, each more innovative than the last. So don’t hesitate to dive into the technical details of your technology and into what makes it different from the state of the art and the competition.

Basing your business plan on “top down” assumptions is not a good idea. For example, claiming that you only need to address 0.05% of the market to generate a turnover of several million euros. Instead, start with concrete data from the field, such as market/impact studies, expressions of interest from prospects, etc., to demonstrate the traction of your (future) product. Then set realistic targets and plan the appropriate means to achieve them.

Do not underestimate your budget. The budget you have in mind is usually the ideal budget for a project with no pitfalls or delays. To avoid running out of budget, it is best to build in contingencies, potential changes in direction, delays, the need for additional resources (internal/external), etc. Think about all the technical costs related to your project and allow for a margin because once the project has started it will be too late.

Do not pretend you have no competitors. It is well known: “no competitors, no market”. One of the first things evaluators do when they receive your application is to research what is being done in your sector. If they find competitors, especially local ones, and you haven’t mentioned them, it’s a bad start. It is much better to clearly identify your competitors and demonstrate your added value.

Be careful when determining the length of your project. For a development, you probably want to market your product tomorrow. However, in general, it will take at least 6 months to develop a Proof Of Concept. To this 6 months must be added another 6 months for a first Minimum Viable Product and another 6 to 12 months for the final product. In some sectors, such as biotech, the certification stage extends the development cycle even further. It can therefore take between 18 and 24 months to develop a new product. If you fall behind in the process, it is always possible to request an extension, provided that you can justify it with concrete elements, but the initial budget will be retained.

Be aware of the importance of your financial situation. A grant is co-financing. You must show your ability to fund your share of the cost of the project through future income, cash flow, fundraising, credit, etc. The right time to apply for a grant is when your financial situation is good or about to improve. It is mathematical, the more money you have to spend, the more grant money you can get.

Do not think of your project as if the grant had no impact on it. Why then should you be given a grant? Think about and explain what the grant will enable you to do more or better than the competition.  This is called the incentive effect.

Don’t let fear of disclosing sensitive information withhold you from applying for a grant. Confidentiality is part of the core business of the evaluators. In over 20 years, we have never seen a project copied as a result of a grant application. Think of the authorities as partners in the same way as a bank or a business angel.

Do not think that grants will solve your cash flow problems. Getting a grant takes time. It can take a long time to pay the instalments. Give priority to income from your customers (or from fundraising, bank credit, etc.) and see the grant as the cherry on the cake.

Be aware that subsidies will not increase your taxes. At first glance it might look like they do, because these subsidies are treated as income for accounting purposes, but your R&D project also paves the way to the investment deduction and the innovation income deduction, which reduce your tax base. In addition, you can benefit from a partial withholding tax exemption for researchers of up to 80%. Obtaining your subsidy is an important proof of activities that meet the R&D criteria. This helps to secure these tax incentives, which are also fully cumulative.

Keen to find out more?

Reach out to the Leyton experts for more information on our services related to R&D grants.

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Leyton Benelux

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