Where Does the Money for Startup Support Programmes Really Go?

Do government startup grants really go to founders who define new problems and create innovative solutions? Or do they tend to favour companies that already understand how support programmes work and are well equipped to meet established evaluation criteria?

We have to ask whether these programmes are truly identifying ‘innovation’, or simply selecting ‘companies that are easy to understand’. There is a contradiction in evaluating founders who use new technologies to break away from existing market structures against the KPIs (it is not about evidences) of those very markets.

While founders spend enormous amounts of time explaining and convincing others of the potentially significant value of what they are building, established players with capital and infrastructure steadily expand into emerging technology areas. The more difficult a market appears, the more easily speed of market entry and access to capital are ceded to incumbent players. This is the real reversal of ‘time’ and ‘capital’ that founders creating new markets face on the ground.

A deeper problem is the lack of literacy in the subject of Climate, Renewbles, and Carbon among evaluators and programme operators. Among early-stage accelerators (ACs) and evaluators, it can be extremely difficult to find experts with a deep understanding of climate tech, the energy transition, regulation and market structures. The business itself may not be difficult. Evaluators may simply find it difficult because they do not understand it, and screen it out. As a result, genuinely innovative new-market businesses can be mistaken for ‘complex and unrealistic businesses’.

Conversely, when people from the same industry or with similar interests participate as evaluators in the name of expertise, founders must also bear the risk of exposing their core ideas and business information to potential competitors without adequate protection.

I receive countless emails encouraging me to apply for startup support programmes. A growing number of applications becomes part of the programme operator’s performance, and amid higher competition, areas that are easier for them to understand, manage and regard as safe are more likely to be selected. It leaves me wondering whether an ecosystem created to help startups has gradually become more accustomed to ‘maintaining the support system itself’ than supporting startups.

Whenever I encounter biases in the investment market and a lack of literacy in this field, I find myself feeling that, before founders can even get on with building their businesses, they must first take on the responsibility of raising the market’s level of understanding. Now that climate tech and emerging industries are once again gaining attention, if "old yardsticks are reinforced without appropriate evaluation criteria, the pace of innovation will slow, and the costs ultimately borne by society will only grow."

"If we fail to recognise innovation, it will become another country’s."-AllthatECO