Government funding: a guide to grants and subsidies landscape in the Netherlands for female founders

When you start a business, you might find your dreams and funding needs are bigger than your purse strings. And that’s ok because the next step is to figure out how you can fill in the purse with the right funding types. And while government grants and subsidies are not the first source of funding that comes into your mind first, we’d like to emphasize in this article why government funding has benefits and how you can leverage it to grow your venture.

What are government grants and subsidies?

Government funding can come in different forms, the most important being grants and subsidies. The aim of the government, in this case, is to support the entrepreneurial ecosystem of a country by offering support systems in the form of financial aid or other forms. Grants and subsidies are both forms of financial assistance that can be provided by governments, non-profit organizations, or private entities. However, there are some key differences between the two

A grant is a type of funding that is provided to a startup, an individual, or an institution to support a specific project or purpose. If you want to get a grant, you will often go through a competitive application process where you need to prove that you have a sound plan and a clear explanation of how the grant will be used, but will come back to that later in this article. One great benefit of a grant is that it doesn’t have to be repaid. Nevertheless, it may come with additional administrative burdens in form of reports or evaluations that show how the funds are spent and what is the progress of the project.
Alternatively, a subsidy is a form of financial assistance meant to support the activities or operations of a company or a person. Subsidies are meant to encourage the production or consumption of goods or to support a specific industry or sector. For example, in the Netherlands, you can get subsidies to support the ideation phase of your startup, research, and development or even its internationalization. As you can see, subsidies can take many forms, such as tax breaks, direct payments, or support programs. While subsidies are not tied to a specific project or outcome, they also don’t cover the whole cost involved in the initiative you are trying to fund, and you might have to return up to 50% of that amount.

In summary, grants are typically provided for a specific project or purpose, while subsidies are designed to support ongoing activities or industries. Grants are often competitive and require a detailed plan, while subsidies may be more broadly available and less tied to specific requirements. Additionally, grants do not need to be repaid, while subsidies may come with certain conditions or requirements. You can find more information about grants and subsidies at the local and European levels.

Why are grants important to support female founders and why should the government support female-led businesses?

When it comes to government support, female founders have different needs than their male counterparts. And that is something we tackled in our latest webinar: “How to get access to funding – for female founders”, where Yeni Joseph, Head of Govt. and Public Affairs at TNO, guided us through some insights into that:

“If you look at the entrepreneurial and tech ecosystem, the government needs to put more effort into understanding how female entrepreneurs’ needs differ from those of their male counterparts”. This is an active role any public entity should play in approaching female founders, seeing where they are, and supporting them.

“Opposite to the male perspective, female founders are eager to know more about mentoring opportunities, get answers to those “how to” questions on internationalization, role models who have successfully obtained public funds and in general understand what kind of support there is out there”.

Given that less than 2% of female founders manage to raise capital, the role of government support is a must to bridge the gap between funding resources and female entrepreneurs. And that is something we aim at FEM-START, to reduce the funding gap for women entrepreneurs.

What are some advantages and disadvantages of grants

With grants, as with everything else, there is not only sun and rays of sunshine and there are disadvantages, but at the same time, there are advantages.

Advantages of applying for grants

Free money: unlike other funding sources such as loans or capital from investors, these are funds that you don’t need to reimburse as long as you stick to the plan that you submitted, show progress and justify accurately how funds are being spent.
Can elevate your company’s brand and establish authority: due to the thorough application process, being accepted by either local or European grants helps you become an authority in your industry and promotes the credibility of your business.
It forces you to deep-dive and draw an accurate picture of your company, where your ambitions go, and define a roadmap for the years to come.
Supports the development and improvement of your product/service: if there is a backlog of features, things you want to improve in your offering
Unlike a VC and as a female founder, these are non-biased funds given to entrepreneurs based on merits and business traction.

Disadvantages of applying for a grant

Expertise in submitting and writing the content for grants is a must. When you participate for the first time in one of these grants, you will soon realize the complexity of the application and the technicalities it implies. Many companies participating in grant applications, such as Horizon, seek outside help to support them from other consulting companies to support them in the application process.
Importance of getting involved with the right partners: some of these grants will require you to bring together several companies, each with their expertise, to form a consortium. Before entering into such partnerships, is important you do your due diligence on partners and make sure they are a good fit for the task at hand, and they are committed to the project.
Reporting is resource-intensive. Once you obtain a grant, you will have reporting obligations to justify how the grant was spent and how on track are you with the goals defined in the application. You will probably want to assign someone from your team to this task.

What do you need to consider when applying for public funding?

If you still wonder if a grant is the right funding option, these are resources that are available to entrepreneurs regardless of their business stage and industry. Definitely, some industries are preferred in terms of grants awarded. Some industries where most public investment goes can include technology-related products, agriculture, social impact, and sustainability among others. Nonetheless, this doesn’t mean your product or service cannot be covered by a public grant or that you cannot partner with other companies to apply jointly for a grant. So, where do you start?

Check regularly the websites of the Netherlands Enterprise Agency, the Erasmus Program for Young Entrepreneurs, and the European Union grant’s section. As you can see, there are countless opportunities for you to get public grants.
Identify and perform keyword research to speed up your grants search and identify the right opportunities for your business.
Gather the necessary information to make sure you meet the criteria for the grant
Show you’ve got support, whether in form of letters of support from potential partners, or successful projects and research projects among others.

And if you are an entrepreneur based in the Netherlands, you can always check the website of Impact City, which is an organization from The Hague area supporting startups and impact makers with resources and opportunities to move their ideas forward.

Conclusion

Government grants and subsidies are among the most common public funds a female founder can get access to and as Marian Spier, co-founder at FEM-START, mentions in our latest webinar, “Women do not ask for funding as they feel they might be begging for money” and as a reviewer herself in some of these grants “there aren’t enough women entrepreneurs applying for these funds”. So, what are you waiting for?

Do you need more tips on how to get started with government funding? Get one of our memberships, and you’ll get access to an expert network that can support you.