Funding help for startup businesses in New South Wales
New South Wales is the startup capital of Australia with more than half of all new tech startups calling the state home. This success can be attributed to several initiatives, including a dedicated support network to aid startups during the critical incubation stage.
But one of the most critical stages of a startup, after coming up with an initial idea, is securing funding. To help with this, the NSW Government has made several grants available to help aspiring entrepreneurs get their ideas off the ground.
So in this article, we will explore the state of startup funding in New South Wales and how you can secure your slice of the pie.
Jobs in NSW
Looking to build your startup team? You can post your vacancies to our jobs in NSW category. Need convincing? Read our article explaining “Why Australian startups can provide the perfect work opportunity for students“.
Minimum Viable Product grants (NSW)
The Minimum Viable Product (MVP) grant is one of the primary sources of startup funding in New South Wales. The grant is designed to help pre-revenue technology startups engage with potential customers to make their first sale.
What is an MVP?
A Minimum Viable Product (MVP) is a working product with just enough features to attract early-adopter customers. MVPs follow on from Proof of Concepts and test ideas with real users before committing to large scale deployment.
What constitutes an MVP will vary with each project. But at the very least, the product should be fully functional and deliver on key promises. An MVP is more than a prototype but not necessarily a finished product.
What is this grant program?
The MVP grant scheme provides funding up to $25,000 to help promising startups in NSW develop their Proof of Concept into a minimum viable product that you can introduce to potential customers.
The scheme aims to match funding of up to 50% of startup costs for approved projects. Companies that successfully obtain a grant will receive 35% of funding up-front, with the remaining 65% made available on the completion and validation of the MVP.
Companies can apply for MVP grants to support them through the following stages of product development:
- To help the company achieve its first sale, or
- To help the company reach a stage where feedback indicates that the product is inadequate for the proposed business model.
Who is eligible
Minimum Viable Product Grants are available to companies developing scalable technology solutions across all sectors of the economy.
To obtain an MVP grant, companies must meet the following criteria:
- The company must be based in NSW and have an ABN registered in the state.
- The company must be at the pre-revenue stage. You can have made no previous sales.
- The company must have a validated proof of concept. (You must provide evidence in the form of research or testing that the product or concept is feasible).
- Have identified potential business customers (B2B) or consumer channels (B2C) that will be used to market the product.
- The company must hold IP rights to commercialise the product.
- The company must have a product that can be deployed to multiple customers.
- The company must prove that 80% of the development costs will occur in New South Wales.
- The company must demonstrate that they have secured funding that matches that requested in the application. (A request for $20,000 must be matched by private funding of an equal amount).
How to apply
Applications for MVP grants are open all year and can be made online here.
Applicants need to register, if they have not already done so. They should also check if their application meets the above qualifying criteria before applying.
All applications are assessed against the criteria outlined in the guidelines document available here. All applicants are encouraged to read this document before applying.
How long does it take
Strong demand for grants has pushed back approval times. The current estimated time for approval is around 12 weeks, but this can change at short notice. Applicants are advised to check with the Treasury office for the latest timeline.
Other funding support options
If your company does not qualify for an MVP grant, other funding sources are available to help support your business. We have outlined the main types of funding below:
Building partnerships grants
The Building Partnerships Grant is designed to help revenue-generating startups and other SMEs scale their business by acquiring a new key customer or identifying new marketing channels.
Eligible companies can claim up to 35% of project costs up to a maximum of $100,000. The project cost can include development costs to improve a product, costs incurred through training or testing and expenses associated with acquiring or retaining talent.
Applicant must meet the following criteria:
- The company must already be generating revenue.
- The solution should be both innovative and scalable, allowing it to be deployed to multiple customers.
- The company must demonstrate the value of the solution through a consortium of partners/customers.
- The company must have an ABN and be registered for GST in NSW.
- The company must hold intellectual property rights to the solution.
- The company must demonstrate adequate funding of at least 65% of total project costs.
Regional startups
Regional businesses located in NSW may benefit from a regional startup grant. This provides a stipend of up to $2000 to help cover the cost of travel expenses incurred when travelling for an innovation-related purpose.
The grant helps to remove barriers that would otherwise prevent regionally located early-stage startups from participating in innovation meetings, programs and events run by the Local Innovation Network.
You can find out more information about the Local Innovation Network (LIN) and its participants here.
Western Sydney Investment Attraction Fund
This $5 million investment fund is designed to help cutting edge manufacturing, and tech companies create new jobs within the up and coming Western Sydney area.
This area is one of Australia’s most active and expanding regions, thanks to significant infrastructure investment such as the new master-planned city and airport. When complete, these are set to create more than 200,000 new positions over the next decade.
Details of how funding will be distributed are still being finalised. But it is expected that a range of loan and loan guarantee products will be available. Interested parties can sign-up here to receive more information when it becomes available.