In this new era of data and AI technologies, Scotland (a nation of innovators for many generations) stands out as one of the finest and most desirable places to experiment with new ideas. The country is primed to maximise its natural resources and realise its technological ambitions.
Data creation, processing and storage that underpin a thriving ecosystem of data and AI applications are exhaustively draining our current resources. We are joining up the dots as a nation to underpin these foundations whilst looking to growth markets and productivity gains through AI applications.
However, as a new organisation with big ideas, one of the toughest (and most time-consuming) challenges is often knowing where (and how) to access the best support, resources, and funding aligned to your needs.
In this article, The Data Lab’s Head of External Funding Services, Adam Turner, provides you with a complete guide to business start-up grants in Scotland. Adam is responsible for the creation and delivery of strategic funding programmes supporting Scottish-based organisations. Since the External Funding Service creation in 2020, he has overseen over 180 consortia-led applications into a range of funding bodies, delivering over £120M of funding into Scottish, UK and European collaborations.
An introduction to business start-up grants
Understanding the different grant sources will help you decide what might be suitable for your organisation. We can split the business funding avenues up into three main groupings. I’ve provided a breakdown of these avenues below, alongside a short summary of what they offer:
• Domestic-based funding – National funding to Scotland. At this level, Scotland has its own innovation centres with their own funding. For example, The Data Lab. There are multiple Innovation Centres, not always carrying an Innovation Centre title, but they all have some form of innovation mechanism that is there to support companies over their initial hurdles (a point that is so vital.)
This is where we also see our own enterprise agencies putting money in. For example, Scottish Enterprise’s SMART: SCOTLAND Funding. It’s worth noting that this funding is still available (and really relevant) at other levels.
• UK-wide funding – This point of funding typically sits within the UK government’s funding agenda and is pushed through Innovate UK or the other funding bodies. Our goal at The Data Lab is to encourage companies to apply through central government offerings, as well as local Scottish support.
The UK government has recently funded a new funding model called Advanced Research and Invention Agency (ARIA) that mimics Defense Advanced Research Projects Agency (DARPA), with a focus on a series of missions deemed ‘high-risk research innovation calls’. ARIA will exclusively focus on projects with the potential to produce transformative technological change or a paradigm shift in an area of science. While it is anticipated that most programmes may fail in achieving their ambitious aims, those which succeed will have a profound and positive impact on society.
• European/international-based funding – We often find this is the one companies don’t know much about. What’s interesting is that through the UK government’s negotiation strategy with many other trading nations (in the wake of COVID and also in the wake of Brexit), they’ve included a lot of innovation partnerships within trade arrangements.
The UK has now formally re-joined Horizon (the European-wide funding mechanism for innovation). This opens lot more funding opportunities for companies to be engaging with counterparts across Europe. These projects are usually multi-year, multi-partner engagements. The UK government are planning on endorsing Horizon now that we’ve re-joined the programme. As a result, they are offering a series of support programmes to help companies rebuild connections and relationships across the EU, often supported by a grant.
While those are the three ‘main’ avenues, it’s worth noting that, at The Data Lab, our External Funding Service is not always just about navigating grants. We can also direct people/organisations to other start-up support systems.
Grant programmes available for Scottish start-ups
We’ve already touched on this lightly in the ‘Domestic-based funding’ opportunities above, but let me elaborate:
- Scottish EDGE is Scotland’s biggest business funding competition, offering funding awards. It consists of four competition categories: Scottish EDGE, Social Enterprise EDGE, Young EDGE and Wild Card EDGE. Alongside this, there are also five special awards within the Scottish EDGE: category for a net zero-focused business (Net Zero EDGE), a circular-focused business (Circular Economy EDGE), a commercial product-based business (STV Growth EDGE), and a biotech-focused business (IBioIC EDGE). To date, they have supported over 569 early-stage Scottish businesses.
- South of Scotland Enterprise, Highlands and Islands Enterprise and Scottish Enterprise are Scotland’s national economic development services. These individual agencies are particularly good at bringing out their own localised support and have individual funds available for their own regions. Funds can range from those built for a specific area, to a very generic call that anybody can apply to.
- Scotland has several Innovation Centres backed by the Scottish Government, with support from its enterprise agencies and universities. They’re a great point of resource for business at this early grant stage, as they advise on routes to funding and offer funded internships, secondments, and BSc, MSc and PhD placements.
- UK Government early start-up funding. There have been some really big changes in the way that Innovate UK (the UK’s innovation investment arm) are supporting start-ups. I’m particularly enthusiastic about this because they have shifted their focus to look at overall support to companies; it’s no longer just about giving them funds; it’s around inviting them to acceleration, accessing mentors and gaining real overall support across the whole country.
They appear to have noted that, as a funding body, they’ve been too difficult to apply to for a lot of SMEs and (in the past) it’s put a lot of organisations off. As of 2023, they’ve dedicated a number of funding calls to companies that have never received Innovate UK funds before, and they’ve simplified questions and the process to apply through Innovate UK Business Growth.
If you’d like to stay up to date with funding opportunities, I often post updates on grant opportunities in our Funding Support Group in The Data Lab Community.
Qualifying criteria for business start-up grants
The qualifying criteria for grants can vary and, as a result, is quite difficult to generalise. However, there are a few key actions that need to be in place before applying for grants. While they might seem obvious, we see a lot of organisations fall at this first hurdle:
- Business bank account – This is one of the things that we’ve seen time and again; organisations apply for funding, they are successful, but they’ve not properly read the criteria of the funding application. Make sure you have the correct accounts in place.
- Investment upfront – What some don’t realise is that a lot of business support grants are paid in arrears. You often still need to have enough investment upfront, and you need to be able to explain where this investment is coming from before Innovate UK or other funding bodies will often fund you in terms of your private sector contributions.
- Make sure you are registered properly at Companies House – Register your company
- A good accountant – A lot of the time, the government has subsidies that you can claim tax refunds on for research and development activity. This is something that Business Gateway will help people to navigate.
- Engagement with seed fund networks – Engaging with the right early investor(s) for your business. You want a partner that can facilitate progress whilst working alongside you.
I recommend that you have the above in order before continuing with grant applications. If you’re having difficulty with any of these points, Business Gateway provides a full host of services to support you, and they have a lot of helpful guides; how do I start my business? What type of bank account do I need? How do I set myself up for auditing and accounts? How do we get an accountant?
The Innovate UK Business Connect (previously known as the Knowledge Transfer Network KTN) also produce a lot of reports in this space.
How to apply for business start-up grants successfully
One of the challenges that new business owners are faced with is the burden of wearing multiple hats, combined with very little time to do anything (and time is king when it comes to anything when you’re a start-up.) So, wherever you invest that human capital in terms of your time and efforts, you want to make sure that you’re applying it in the best respect.
This is where Funding Finder comes in; through this complimentary business tool, we’re aiming to remove the burden of spending a lot of time trawling through funding networks, and take away all of the noise in the ecosystem.
Benefits of Funding Finder
Firstly, what the tool does is bring the funding calls into one nice, unified space. It helps through clever matching algorithms to pair you with appropriate funding calls that are going to be relevant to your requirements. Essentially, instead of the onus being on the individuals to go and look for this, Funding Finder does the matching for them.
What we’ve seen so far is that, rather than looking at five calls (for example) and having to determine which one’s the best fit, it helps start-ups get to that point where they can narrow that field down to perhaps two and, therefore, they spend their valuable time applying to those.
Following this, we’d encourage start-ups to use the support available through the tool, and wider Scotland. Funding Finder does a lot more than just provide businesses with a list of potential applications, it also offers webinars, briefings, one-to-one sessions, help guides, and useful videos.
Additional grant funding support through Scotland
Scotland has some fantastic partnerships with people that offer invaluable support mechanisms, for example, Innovate UK Business Growth (formerly known as EDGE). They provide templates, guides, and best practice support on how to apply for your application. They also provide a lot of useful touchpoint articles, e.g. ‘How to plan and write a successful Innovate UK grant application’, and ‘7 questions before applying for innovation funding.’
As I previously mentioned, The Data Lab also have some expertise in this space where we will help people to navigate the data and AI components of their application. And we can also review it as a trusted adviser and helpful friend, where we provide honest feedback.
I can’t stress enough, use the expertise across the data and AI space as much as you can – often it’s free to use it. Get as many people to review your application as possible, speak to people who have already been through the process (The Data Lab Community is a great place to meet people). The Data Lab Team have been assessors for multiple grants (I’ve reviewed many applications from a European side AND a UK wide side), so we know what the assessors are looking for. If you’d like some support from us, we just need to be approached with plenty of time.
The overarching point, when it comes to start-up grants, is to make sure that you narrow the field of applications that you’re potentially looking at applying for. At The Data Lab, we’re really eager to change the status quo. Currently, everybody’s just frantically applying for things all the time. We need to get much more systematic and realistic with the types of applications that we want to apply for. For me, it always comes back to quality over quantity.
Real-life examples: Scottish start-ups thriving with grant funding
There are plenty of start-ups who have utilised Scottish funding support networks to begin their journey. Some of my favourite examples are:
Gigged.AI: AI-powered matchmaking for the gig economy
Amidst the growing popularity of freelancing and remote working, Gigged.AI was launched in 2021 with support from The Data Lab. The Gigged.AI platform uses cutting-edge conversational AI to allow clients to qualify work packages that are then defined into a statement of work (SOW).
Funding was soon granted to the firm through Innovate UK’s Sustainable Innovation Fund, after they enlisted the support of The Data Lab’s External Funding Service to strengthen their application.
The company went on to double the size of its team following the completion of an over-subscribed investment round led by Techstart Ventures. Gigged.AI is now exploring overseas interest in the technology thanks to recent funding from Scottish Enterprise SMART: Scotland.
This is a prime example of how overcoming the initial hurdles of a start-up can lead to greater things.
Data Innovation.AI: Designing buildings to reduce virus transmissions
Data Innovation.AI provide data-driven simulations to reduce the spread of infection through building design. The Data Lab helped them to get a new programme of work around built environment and modelling simulation for viruses such as COVID-19. This was particularly useful for adapting current buildings to help us return to our workspaces post lockdown. In addition to modelling simulations for existing buildings, the technology has now gone on to include new building designs to assess the design’s impact on airflow ahead of the build. This allows us to identify and remove bottlenecks where infections are likely to linger in buildings in the future to protect against future epidemics.
Your building designs – a unique source of data to fight COVID-19 using Decision Intelligence
Smplicare: Using smart wearables to help predict and prevent falls
Founded by University of Edinburgh alumni, Smplicare is an Edinburgh-based tech start-up using AI to help older people live independently for longer. The Data Lab helped them secure £750k of funding to run a six-month study on wearable to predict and prevent falls in older people, where we also funded the support of our data scientists to analyse user data and validate the AI-powered models. Thanks to funding secured for the study, they now plan to launch their mobile app to help older people better manage their own health later in 2024.
Edinburgh start-up lands £750k for ground-breaking research into falls by elderly
AICE: Innovation in early bowel cancer detection
Thanks to a successful €6 million Horizon Europe grant that The Data Lab supported, the AICE project is helping clinicians to spot the early warning signs of bowel cancer. The international collaboration between The Data Lab and 11 partners across academia and industry is working towards making AI-assisted colon capsule endoscopy a part of bowel cancer diagnostics. It aims to identify suitable patients for capsule endoscopy and will ultimately make detection less invasive for patients and potentially reduce the pressures on the NHS. Thanks to this funding, we’re looking at a new cost-effective way of treating bowel screening patients with options for at-home treatment.
Scotland at forefront of ‘gamechanger’ €6m project to improve bowel cancer diagnosis
The future for Scotland’s grant-funding process
A final thought that I’d like to leave you with: grant-funding applications appear more daunting than what they are. It’s easy to become overwhelmed by all the different areas of support and navigating it all.
Fortunately, a lot of organisations across Scotland are getting together to start making funding and support for funding more accessible. There’s been a refocus on ensuring assistance is tailored at every stage of a company’s lifecycle, from start-up, to scale-up, to fully established organisations. Scotland is bringing together all of these supporting organisations to make sure that we help companies on that journey. This is something that’s quite unique to Scotland, in the respect that we’ve articulated what our problems have been in the past and why we’ve not been successful. As a result, we now have an underpinned plan (and investment from government) to help us to deliver for companies at scale.
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