All the different types of funding out there | Grants: Is the juice worth the squeeze?
We think so. But there's an art to see how.
The three main types of funding are Grant, Equity and Debt. Those they can be broken down even further.
Lots of different funders out there swimming in lots of different pools.
Let’s start with Grant funding as that’s everyone’s favorite (or least favorite).
Remember, when you subscribe, you get new grant opportunities in Africa sent straight to your inbox every two weeks.
Here’s the last one:
Is the juice worth the squeeze?
Grants aren’t a “crapshoot”. The wrong Grants for you are.
Just like advertising isn’t a “crapshoot”. The wrong advertising for your business is.
But Grants also aren’t free money.
Just like Sales at your company don’t come free either.
The truth is more subtle and we don’t think anyone has published work on this before.
There are many dimensions of whether a grant is worthwhile.
Does your company fit the RFP? Sector? Company Size? Registration Requirements?
See more on this here:
Does your company fit with the funder? Does your company fit with the funder’s funder? Does your project fit the (often unwritten) goals of the funder?
See more on this here:
What are the chances of winning? Is the prize worth the effort? Are there legal fees? Once you win, will there be so much bureaucracy and reporting requirements that, at the end of the day, you wish you had never applied and accepted in the first place?
Whether to apply for a grant seems like more art than science. We give you some tips here to help you make your decision on whether you should even look closer at an RFP. Before you even do any other assessment…
Any time you take on a new project or spend money in your business you think about it’s ROI. If you spend $1,000 on ads, how many visitors to your website are you going to get? How many sales are you going to get?
We do the same for grants.
And we have our network tell us about their experiences too: Sunlight.Reviews
A “yelp” for funders. Leave a review!
Let’s go through the types of Grant funding typically available.
Repayable Grant
A grant which must be repaid according to certain terms and under specific conditions such as:
before the company is sold/IPO
before a dividend is paid to shareholders
or if the company becomes profitable
But no repayment is required at a certain date (and they won’t send out debt collectors).
The “repay only if successful” model reduces pressure compared to traditional debt— but don’t overlook the terms—some can be surprisingly aggressive in clawback scenarios. Watch for: repayment clauses tied to metrics like revenue (not profit) or repayment “triggers” that could get activated earlier than expected.
We often try to work with our entrepreneurs to structure these strategically so that the funder gets their desired ‘repayable’ term, but in such a way that repayment would generally not be necessary.
Some of our favorite Repayable Grant programs 👇 (for premium subscribers)
Results Based Funding (or Subsidy program)
You do the work first, and then you get paid. A set amount (e.g. $10 per product distributed, $100 per smallholder farmer reached) is reimbursed after verified delivery.
A subsidy of $x is paid based on how many units of solar, for example, are installed, paid after the fact.
Often requires third-party verification (like audits, surveys, or external validation partners), which can slow down disbursement.
Cash flow warning: You will need to front the working capital for 6–12 months before you see any of the grant money.
Some of our favorite RBF programs 👇 (for premium subscribers)
Prize
An organization wants to get publicity for themselves and the idea is to generate as much excitement as possible with the idea that this kind of goodwill is cheaper than doing a lot of ads.
Often very competitive and flashy; high effort; low odds
Often funded by corporates or foundations
Claim to be part of “building ecosystems” around a specific theme (e.g. climate, fintech inclusion, women-led businesses)
Tend to favor well-networked companies, polished brands, or ventures with traction that makes for a good PR story
We typically don’t recommend applying to them, but we’ve got some relevant prizes below 👇 (for premium subscribers)
Challenge Fund
A thematic, donor-backed initiative meant to “unlock” a specific market or solution. These are usually open-call, RFP-style grants with clear criteria and stages.
A donor like EU, USAID or Gates sees an opportunity with small-scale solar or the like and puts together a targeted approach in (often) 1 country focused on a particular type of technology to try to spur scale-up.
They can be generous ($100k–$500k+), but are usually milestone-based, released in tranches tied to performance or deliverables. So there is often overlap with RBF programs.
Advantage: If your company squarely fits the theme and geography, your odds are much higher than a global prize.
Watch out: Bureaucracy can be thick. Reporting requirements can become mini-theses. That’s why we handle grant management for our clients when we help them win opportunities (email daniel@thegrant.co to learn more).
Some of our favorite Challenge Fund programs 👇 (for premium subscribers)
Innovation Grants
Specifically designed to fund new ideas, prototypes, or R&D, rather than existing operations.
Often funded by Ultra HNWI donors, multilaterals, governments, or UN agencies testing new models for service delivery.
These grants can be more flexible—but also more speculative.
Requires that entrepreneurs are honest about their “innovation.”
Adding AI to your landing page won’t cut it.
Think systems-level change or reaching underserved communities in new ways.
Some of our favorite Innovation Grants 👇 (for premium subscribers)
Technical Assistance (TA) Grants
Non-cash grants or small disbursements meant to pay for expert support, training, and/or software — legal, financial, tech, HR, etc.
Often paired with investment (from DFIs or impact funds) to ensure the company builds capacity while scaling.
Can cover things like: investor readiness, governance structure, gender audits, MIS upgrades.
Catalytic or Matching Grants
These require the recipient to “match” part of the funding—either in cash or in-kind resources. All other types of grants we’ve mentioned here can often have matching requirements.
Example: “We’ll give you $100,000, but only if you’re raising at least $100,000 from other sources. to match.”
Useful for: signaling traction, improving investor terms, and filling funding gaps in blended finance rounds.
Accelerator/Incubator Grants
Small, often equity-free grants ($10k–$50k) alongside “credits” (AWS, Google Ads, etc) tied to participation in (and successful completion of) a program.
Will likely be bundled with mentorship, training, and visibility.
But will require you to commit your time; either virtually or in person
Great for early-stage companies that need validation, mentorship, and networking
Some of our favorite Accelerator/Incubator programs that come with funding 👇 (for premium subscribers)
Emergency / Relief Grants
Offered during crises (COVID, conflict, climate shocks) to stabilize social enterprises or ensure continuity of services.
Often flexible in use but time-sensitive and unpredictable in when they appear.
Often used for working capital, staff salaries, or protecting core operations.
Family Office
Though technically not a “grant program,” many family offices give out philanthropic capital with few strings attached—especially when the project resonates with a personal passion (health, education, climate) of a HNWI (high net worth individual).
The legal requirements for setting up a VC fund are complex and expensive.
But if all of the LPs (limited partners) are related then the requirements are minimal. So wealthy families often pool their money to invest in real estate or startups together.
Their giving (they usually have a side pool of funds for donations) is discretionary and relationship-driven, not application-driven.
Family offices often don’t have applications/RFPS or respond to cold emails.
They work on a referral basis so you must know someone who knows someone.
If you don’t, perhaps you can go to a family office conference or introduce yourself through an LOI (letter of interest).
A grant from a family office might look like a simple wire after a coffee meeting
As opposed to a year or more of back-and-forth
Recap
Lots of different types of grant funding out there. Debt and Equity types are coming next. Need help finding the right grants?
We send grants under $150K out for free
We send grants from $150K - $10M out to premium subscribers and our clients.
But why spend your time looking through and analyzing? Let us find the best grants for you. Email daniel@thegrant.co.
And remember… even with all the different types of funding out there. Your customers and your good old fashioned sales will always be the best type.
Our favorite grants (by type) and who’s got money now
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