The Struggle to Innovate: Navigating the Harsh Realities of R&D Funding for Startups
Imagine pouring your heart and soul into a revolutionary idea, only to face a funding maze that can derail your progress. For many startups, particularly in the SaaS sector, it's clear that the landscape around R&D financing leaves a lot to be desired. Extensive paperwork, slow turnarounds and a lack of flexibility in assessing risk-takers pursuing new innovations has plagued startups. But what most founders don’t expect is the cost on their time.
A study of Australian researchers applying to the National Health and Medical Research Council, found preparing a single grant proposal takes an average of 38 working days. With resubmissions requiring another 28, each application translates to over 5 weeks documenting activities, and a meagre success rate of between 20 - 25% — meaning a lot of time gets invested in activities that yield no discernible benefits, at the cost of actually producing innovative, high quality research. This time burden can be even more pronounced in R&D-intensive startups, where innovation cycles rely on swift iteration and resource allocation.
The story is no different for startup founders.
Arduous application and pitch processes
Securing funding for startups whether from VC funds, angel investors or grants, requires lengthy, manual applications, with detailed reporting on all activities and expenditures. This typically involves collating records from email trails, receipts, invoice files and more. With limited administrative support, particularly in early-stage startups, this often falls on the founding team.
Preparation for a single funding round can easily take a minimum of 4 weeks when including refined decks, investor research, legal review, and additional refining before each presentation — of course this is not counting the time taken on travelling and attending pitching events.
Every week diverted to administrative burdens delays commercialising minimum viable solutions and gaining valuable customer feedback.
Slow turnarounds
Once all requirements have been diligently met, approval waits typically span 1 - 2 months without any guarantees. Even incentive programs like the R&D Tax Incentive have a median process time of 8 weeks. For cash-strapped startups in their critical growth phases, such prolonged waits undermine the urgent capital needs that R&D support aims to fulfil.
If the wait wasn’t gruelling enough, rejections often come with no additional insight or feedback, leaving founders little room to understand why their applications were not successful or how to improve their minimum viable product.
Lack of flexibility
Not all startups fit the standard mould of development that traditional funding programs expect. Those assessing applications and pitches often struggle to appreciate why some ventures operate differently through alternative, yet commercially viable models. This is particularly problematic for R&D-intensive startups pursuing non-linear development paths or exploring unconventional approaches to innovation.
Grant programs and other incentives typically apply uniform eligibility criteria and consider structured forecasts and standardised metrics of success. However, SaaS startups are constantly iterating their Minimum Viable Product based on quick customer feedback loops to achieve product-market fit. Their development process doesn't always follow a linear path.
Early-stage funding also tends to favour certain industry verticals over innovators tackling problems in other spaces. As a result, many promising ideas that could disrupt their field get overlooked or rejected unnecessarily. For example, hardware and biotech startups often face unique R&D challenges—such as high material costs and extended testing periods—that don’t align with typical funding frameworks.
Empowering innovation with Kashcade
If you're a SaaS startup currently struggling with funding delays or the complexities and barriers of traditional financing programs, Kashcade provides an alternative pathway to non-dilutive capital when you need it the most:
Fast for founders: Ditch the pitches and the need to create new material, and leverage the information you already have on hand, to access capital in 48 hours.
Flexible funding: Receive funds part way through the year, then access more over time as your R&D refund grows. This allows your company to access more funding as it needs.
No equity dilution: Kashcade offers non-dilutive funding, so you don't have to give away equity, and can maintain ownership and control of your company.
Network of professional startup services: We partner with industry professionals passionate about helping founders navigate the intricacies of startups and the complexities of R&D frameworks.
Our flexible and streamlined approach to R&D funding has helped countless startups progress ground-breaking ideas that inflexible systems initially hindered. Whether you're working on a revolutionary SaaS product, pioneering biotech solutions, or hardware innovation, Kashcade can bridge the gap between your vision and reality.
Get in touch with us if you'd like to learn more about your funding options through Kashcade, or get an estimate of your funding potential quickly using our online funding calculator.