Startups often struggle with grant applications. A new group wants to change that.
A new coalition wants to make sure Pittsburgh companies don't leave federal money on the table.
The Pittsburgh Technology Council and Keystone Space Collaborative have teamed up to launch the Data, Robotics, Energy, AI, Manufacturing and Security (DREAMS) Coalition, an initiative designed to help local companies in that industry cluster better apply for federal grant funding. The application to be considered for the coalition, announced last week, is open to companies at all stages to apply — and it comes at just the right time.
Local companies need help applying for Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding, especially in the current 'uncertain federal funding environment,' said Justine Kasznica, founder and board chair of Keystone Space Collaborative. Bringing businesses together in a coworking space and connecting them with government agencies and investment stakeholders provides the foundation to score more grants.
'There [are] a number of these companies that really need support,' Kasznica said, 'identifying what opportunities exist and then sitting down and figuring out what they need to do to maximize their chances of getting critical early-stage [research and development] dollars.'
From startups that are first-time applicants to seasoned businesses, the DREAMS coalition is seeking companies with expertise in data, robotics, energy, AI, manufacturing and security that can apply their skills to solve problems identified by federal agencies.
Along with offering federal funding assistance, the coalition will provide a collaborative workspace in Bakery Square and facilitate connections to industry stakeholders and investors to propel advanced technology startups in aerospace, robotics, AI and manufacturing.
'If you take the assets we have in this region, both historical and recent, there's not one industry that's going to take us to the next iteration of Pittsburgh,' Audrey Russo, president and CEO of the Pittsburgh Technology Council, told Technical.ly. 'The diversity of the [coalition's] industries are only going to make us stronger.'
As applications roll in, companies could begin receiving support at the coalition's coworking space as early as next month, according to Kasznica and Russo.
The coalition is currently in a six-month pilot phase, but if it proves successful, the Pittsburgh Technology Council and Keystone Space Collaborative plan to extend the initiative and establish a more permanent location.
'We're calling it a pilot because we want to test out this broader industry cluster,' Kasznica said. 'How we evaluate ourselves is based on how many new projects and funding dollars we can bring to new technologies or existing companies.'
Instead of supplying access to cash like accelerators and incubators, the coalition relies on the importance of building connections and providing hands-on guidance through the grant application process.
A tough fed funding landscape still rife with opportunities
Despite the uncertain federal funding landscape, Russo and Kasznica both said they were optimistic about local companies securing grants moving forward.
Since the creation of the SBIR and STTR programs, Pittsburgh companies have received over $400 million for innovation research and new technology development across over 1,000 grant awards. The early-stage, non-dilutive funding has allowed Pittsburgh to compete with larger cities that have more private capital and has helped numerous local startups get off the ground.
The coalition will specifically target agencies in aerospace and defense, Kasznica said, which aligns with the type of funding Pittsburgh companies have received to date. A majority of the grants to Pittsburgh companies have come from the Department of Defense, with the other top agencies being the Department of Health and Human Services, NASA, the Department of Energy and the National Science Foundation.
'We're anticipating even more opportunities, in some cases, particularly for the future technology development that we're looking at doing in this region, which is advanced manufacturing, robotics and AI,' Kasznica said. 'There's a real appetite for that, even with this administration.'
Through DREAMS, Kasznica and Russo want to keep those dollars flowing into the region.
What early-stage companies often get wrong when applying for grants, according to Kasznica, is approaching the process with a product-first mindset and trying to pitch a product they've already built. The coalition aims to shift this approach early on by encouraging companies to first understand the needs of potential customers and then apply their expertise in robotics, manufacturing, or AI to solve those specific problems.
'It's really important to have good processes intact and people around you that have experience doing this kind of work,' Russo said, 'so that you can understand what you're able to leverage and what you need to make it happen.'
Plus, a free coworking space to spread knowledge even further
With a $60,000 grant from the Benedum Foundation, the coalition is leasing space at Spaces Bakery Square, utilizing the coworking hub with 11 rooms, including private offices and flexible conference and working areas that could accommodate up to 30 people.
Staff from the Pittsburgh Technology Council, Keystone Space Collaborative and innovation research firm Parallax will all be onsite to work with participating companies.
Through the no-cost coworking space, companies will gain access to mentorship and open office hours with a Parallax team member who specializes in connecting universities, businesses and government. Also, eligible members will be able to access Keystone Innovation Zone tax credits, further incentivizing growth.
Additional programming could include workshops on scaling innovation and networking events designed to build a strong, connected entrepreneurial ecosystem, according to a recent press release.
'We need a better concierge system, which is what we're trying to set up here with this coalition,' Kasznica said. 'This isn't a traditional accelerator … we're not giving money out, but we're providing a place to come and participate, meet potential partners and funders.'
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Technical.ly
28-04-2025
- Technical.ly
Startups often struggle with grant applications. A new group wants to change that.
A new coalition wants to make sure Pittsburgh companies don't leave federal money on the table. The Pittsburgh Technology Council and Keystone Space Collaborative have teamed up to launch the Data, Robotics, Energy, AI, Manufacturing and Security (DREAMS) Coalition, an initiative designed to help local companies in that industry cluster better apply for federal grant funding. The application to be considered for the coalition, announced last week, is open to companies at all stages to apply — and it comes at just the right time. Local companies need help applying for Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding, especially in the current 'uncertain federal funding environment,' said Justine Kasznica, founder and board chair of Keystone Space Collaborative. Bringing businesses together in a coworking space and connecting them with government agencies and investment stakeholders provides the foundation to score more grants. 'There [are] a number of these companies that really need support,' Kasznica said, 'identifying what opportunities exist and then sitting down and figuring out what they need to do to maximize their chances of getting critical early-stage [research and development] dollars.' From startups that are first-time applicants to seasoned businesses, the DREAMS coalition is seeking companies with expertise in data, robotics, energy, AI, manufacturing and security that can apply their skills to solve problems identified by federal agencies. Along with offering federal funding assistance, the coalition will provide a collaborative workspace in Bakery Square and facilitate connections to industry stakeholders and investors to propel advanced technology startups in aerospace, robotics, AI and manufacturing. 'If you take the assets we have in this region, both historical and recent, there's not one industry that's going to take us to the next iteration of Pittsburgh,' Audrey Russo, president and CEO of the Pittsburgh Technology Council, told 'The diversity of the [coalition's] industries are only going to make us stronger.' As applications roll in, companies could begin receiving support at the coalition's coworking space as early as next month, according to Kasznica and Russo. The coalition is currently in a six-month pilot phase, but if it proves successful, the Pittsburgh Technology Council and Keystone Space Collaborative plan to extend the initiative and establish a more permanent location. 'We're calling it a pilot because we want to test out this broader industry cluster,' Kasznica said. 'How we evaluate ourselves is based on how many new projects and funding dollars we can bring to new technologies or existing companies.' Instead of supplying access to cash like accelerators and incubators, the coalition relies on the importance of building connections and providing hands-on guidance through the grant application process. A tough fed funding landscape still rife with opportunities Despite the uncertain federal funding landscape, Russo and Kasznica both said they were optimistic about local companies securing grants moving forward. Since the creation of the SBIR and STTR programs, Pittsburgh companies have received over $400 million for innovation research and new technology development across over 1,000 grant awards. The early-stage, non-dilutive funding has allowed Pittsburgh to compete with larger cities that have more private capital and has helped numerous local startups get off the ground. The coalition will specifically target agencies in aerospace and defense, Kasznica said, which aligns with the type of funding Pittsburgh companies have received to date. A majority of the grants to Pittsburgh companies have come from the Department of Defense, with the other top agencies being the Department of Health and Human Services, NASA, the Department of Energy and the National Science Foundation. 'We're anticipating even more opportunities, in some cases, particularly for the future technology development that we're looking at doing in this region, which is advanced manufacturing, robotics and AI,' Kasznica said. 'There's a real appetite for that, even with this administration.' Through DREAMS, Kasznica and Russo want to keep those dollars flowing into the region. What early-stage companies often get wrong when applying for grants, according to Kasznica, is approaching the process with a product-first mindset and trying to pitch a product they've already built. The coalition aims to shift this approach early on by encouraging companies to first understand the needs of potential customers and then apply their expertise in robotics, manufacturing, or AI to solve those specific problems. 'It's really important to have good processes intact and people around you that have experience doing this kind of work,' Russo said, 'so that you can understand what you're able to leverage and what you need to make it happen.' Plus, a free coworking space to spread knowledge even further With a $60,000 grant from the Benedum Foundation, the coalition is leasing space at Spaces Bakery Square, utilizing the coworking hub with 11 rooms, including private offices and flexible conference and working areas that could accommodate up to 30 people. Staff from the Pittsburgh Technology Council, Keystone Space Collaborative and innovation research firm Parallax will all be onsite to work with participating companies. Through the no-cost coworking space, companies will gain access to mentorship and open office hours with a Parallax team member who specializes in connecting universities, businesses and government. Also, eligible members will be able to access Keystone Innovation Zone tax credits, further incentivizing growth. Additional programming could include workshops on scaling innovation and networking events designed to build a strong, connected entrepreneurial ecosystem, according to a recent press release. 'We need a better concierge system, which is what we're trying to set up here with this coalition,' Kasznica said. 'This isn't a traditional accelerator … we're not giving money out, but we're providing a place to come and participate, meet potential partners and funders.'
Technical.ly
09-04-2025
- Technical.ly
Startup founders still believe in Philadelphia, despite the funding squeeze
As federal funding cuts and policy changes put a squeeze on startup financing, Philly founders are still working to grow their companies locally — even amid pressure from investors to move elsewhere. There's a lot that goes into the decision to leave or expand outside of your home region, several entrepreneurs said last week at a dinner celebrating the 2025 Philly RealLIST Startups. In addition to funding, founders said, they consider factors like their footprint in the local ecosystem and what opportunities and challenges come from operating a physical space there. Philadelphia can be great for raising an early round, but as a company becomes more successful, investors often suggest founders to move their business to places like New York and San Francisco, said Nick Ashburn, founder and CEO of financial wellness platform Personawealth. 'I'm really scared if and when I do raise outside capital,' said Ashburn, whose company has so far been bootstrapped, 'that they're going to make me go somewhere else.' Philadelphia isn't as investor-friendly for later stages as San Francisco or Austin, agreed Jason Sherman, CEO of social connection app Spinnr. It would probably be easier to raise bigger amounts if he did move, Sherman noted, because investors have already asked him to do just that. However, being forced to be more careful with money isn't necessarily a bad thing, observed Patty Tawadros, CEO of biospecimen donation platform Donor X. 'It forces you to be leaner in the way you're spending money and you're giving up less equity later,' Tawardros said. She added that a founder could potentially have it both ways. 'If you have to leave the more … affordable ecosystem, go to New York, Boston, California, raise the money and then come back and spend it here, what's wrong with that?' Despite Philly's relative affordability, its startups still face the same macroeconomic challenges as the rest of the country. Right now, a big one is the uncertainty about whether Congress will renew the Small Business Innovation Research and Small Business Technology Transfer programs. Known as SBIR and STTR and often called the US government's 'seed fund,' these programs have long played a key role as one of the only sources of major nondilutive funding for early-stage companies. Joshua Freedman, cofounder and CEO of early-stage medical device company Airalux, is currently waiting to hear about SBIR funding. But review dates keep getting pushed back and no one knows what's going to happen, he said. Government grants helped Vertical Solar Generator (VSG) prototype its stackable solar energy system, but some of those sources have stopped, said cofounder and COO Charles Mbata. His company is considering pivoting to crowdfunding and private equity to support further development. A physical office: Investment in the local community For some startups, the federal turmoil means the possibility of losing major clients. HouseCallVR, which uses virtual reality to educate patients, counted the US Department of Veterans Affairs as one of its first clients, per cofounder and CEO Linda Ciavarelli. But now, because of the new landscape, 'that's been a challenge,' Ciavarelli said. 'They're not necessarily as interested in implementing emerging technologies.' Ciavarelli's staff works from all over the world, so she's not planning to open a physical office, and that sentiment was echoed by many at the RealLIST Startups dinner. But like last year, opinion was split on work modality. Several founders see an IRL workspace as something keeping them tethered to Philadelphia, in a good way. FSH Technologies, which offers software for city operations, opened an office in Center City in March, cofounder Johnson Lin said. Virtual work was fine when the company was building a project or doing routine work, but they found that it's better to be in-person when they're trying to problem-solve or pivot. 'People just brainstorm together on a whiteboard for two or three hours,' Lin said. 'It's been so much nicer to have these conversations, be in person, in the office.' Opening a physical space also solidifies the company's presence in Philadelphia, especially as it recruits talent and builds partnerships with local workforce development orgs like Philadelphia Works, Mbata of VSG said. Neftwerk, which uses blockchain technology to create a marketplace for buying and selling art, reaches an international market, said founder and CEO Francesca Augustine. But she still wants to invest in Philly by creating local jobs and giving back to the community. 'Since we're working with new tech, [we want] to be part of training people in Philadelphia to take those jobs,' Augustine said. 'We're pretty passionate about building here in Philadelphia and creating an ecosystem in Philadelphia.' Sarah Huffman is a 2022-2024 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Lenfest Institute for Journalism.
Technical.ly
31-03-2025
- Technical.ly
A founders guide to fundraising: What you need to know before seeking startup investors
Why do founders spend such an inordinate amount of time pursuing investors? For one simple reason: capital is like oxygen for an emerging growth company — without it, no startup can survive. While identifying, approaching and convincing potential investors to take a chance on your startup might seem daunting and somewhat overwhelming, it doesn't have to be. We've prepared this guide to help founders like you develop a better understanding of the fundraising process, provide the insights you need to effectively navigate your fundraising journey and offer some tips and strategies for getting your company on the path to fundraising success. The various pathways to early funding Even though venture capital (VC) is an important source of funding for startups, it is just one of the many available paths for early-stage companies. Considering options outside of VC can not only expand funding scope, but may also lead to a variety of opportunities that better align with the company's goals, stage and needs. Investor readiness plays a critical role, ensuring companies are well prepared to attract investment, regardless of the financing method chosen. We'll dive into that below, but first, here's a look at some of your funding alternatives.. 1. Seed stage VC Seed stage VC provides initial funding for early stage companies to launch their business ideas and validate market potential. Unlike traditional VC, which typically invests in more established firms with proven revenue and market traction, seed stage VC focuses specifically on nurturing startups in their early phases. 2. Angel investors Angel investors are typically experienced entrepreneurs, successful business professionals or high-net-worth individuals who invest their personal funds into promising startups. In addition to providing capital, angel investors often offer valuable expertise and mentorship to the companies that they invest in. 3. Accelerators Accelerators are organizations that support early-stage companies through a competitive formal mentoring program. Companies that are accepted will typically give up a small portion of equity to be able to participate in a 12 to 16-week program, gaining exclusive access to guidance from experienced mentors, incredible business connections and pre-seed or seed funding. 4. SBIR grants Small Business Innovation Research (SBIR) grants are competitive funding opportunities provided by federal government agencies to support the research and development (R&D) projects of small businesses. Early stage companies in particular can benefit from SBIR grants as they may accelerate R&D efforts, help explore innovative ideas, and demonstrate proof of concept. 5. Equity crowdfunding Equity crowdfunding enables early stage companies to raise capital by soliciting small investors from a large number of investors through online platforms. Crowdfunding not only gives companies access to capital, but can also help gauge business interest. 6. Corporate venture capital(CVC) Occasionally, an existing business will make a strategic seed investment in an early-stage startup. These investment opportunities generally arise where there is a strategic fit between the company raising funds and the underlying business of the CVC. 7. Customer financing Sometimes referred to as pre-sale financing, customer financing is when a company collects payments from customers upfront before delivering goods or services. Early-stage companies can use this pre-sale revenue to fund production and development while also validating a market demand with reduced financial risk. 8. Credit lines Early-stage companies can apply to and take advantage of credit lines as a financial tool that provides flexible access to funds up to a set limit. Unlike traditional loans, credit lines allow businesses to borrow as needed, repay and borrow again. For early-stage companies, this can be ideal for managing cash flow, covering short-term expenses and pursuing growth opportunities without having to issue equity. 9. Revenue-based financing (RBF) Revenue-based financing is a special form of financing where businesses receive upfront capital and repay it through a fixed percentage of their monthly revenue until they reach a predetermined amount. RBF is particularly appealing to early-stage companies because the repayment amounts adjust according to performance, providing flexibility that helps alleviate financial pressure during low-income phases. Examples of RBF investors include specialized RBF funds, angel investors, alternative lenders and government programs. 10. Factoring through receivables Factoring through receivables is a financing method where early-stage companies sell their accounts receivables to a third party at a discount in exchange for upfront capital. This allows startups to quickly access funds tied up in outstanding payments that may help support daily operations, development strategies or other types of expenses without incurring additional debt or further equity financing. Want to delve deeper? Check out our on-demand course at StartUp U: Your Seed to Series A Roadmap. Are you investor ready? A checklist for founders Once you've finally identified one or more promising potential investors, what comes next? Are you and your team prepared to make a strong, compelling pitch? Are you truly 'investor ready'? To capture investors' attention and secure their investment, it's crucial to present a strong and compelling profile of your business. This entails: Showcasing the unique features of your products Providing a clear financial statement Highlighting effective business management Emphasizing the expertise and passion of your skilled team members Demonstrating your business's position in the market. Additionally, it is essential to ensure that your pitch deck reflects the exceptional quality of your business, both in terms of content and presentation. A professional and well-crafted pitch deck speaks volumes about you as a founder or team and showcases the thoughtfulness and effort you've invested in your venture. 1) Shore up your legal foundation No matter how disruptive, groundbreaking or promising a new product or service, any potential investor will both identify and go to great lengths to avoid any glaring red flags. That means your company's corporate documents — covering its formation, trademark protection, the election of its board of directors and officers and the issuance of founder's stock — need to be in good order. Before they sign on the dotted line, an investor expects a complete list of all stakeholders in the company alongside proof of compliance with federal and state regulations. Juggling these high-stakes obligations is undoubtedly overwhelming. As many capable leaders learn throughout their careers, knowing when to seek guidance can make all the difference. 2) Build your company's financial model Include a projected income statement for roughly 3 to 5 years. A successful model demonstrates you understand your market and how the business scales, which is then reflected through the different assumptions you use to build it. Although investors appreciate the challenge of accurately projecting total revenue each year, expect that your model, particularly for the next 12 months, will accurately identify your costs. As a founder, you're responsible for never losing sight of your 'runway' — how long before you run out of cash. You calculate this by dividing your cash on hand by your monthly burn rate. Your model should reflect a runway that is long enough to get you to your next round of financing or break even under a more conservative set of revenue assumptions. For example, does the business have enough runway, even if you only achieve half of your expected revenue? 3) Be in the right room with the right investors Regardless of a founder's preparedness, if a healthcare company pitches to a fintech investor or a seed-stage startup pitches to a late-stage funder, the founder most likely will not make it out of the room with that investor. While seemingly obvious, too many ignore the reality that securing the investment largely revolves around choosing the right potential investors. Use available resources to ensure your effort is intentional and targeted. Lean on your advisors — your attorneys, accountants, bankers, etc. — and research platforms. Take the time necessary to explore an investor's portfolio, the companies in which they've invested, these companies' stages, the industry categorizations and geography to really hone in on your ideal audience.
