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Innovation Funding Solutions before going to Raise Capital

Capital raising can be a lengthy and complex process, especially when dealing with more conservative investors who will want to see a stable cashflow position and operation costs kept in check. These investors will want to know that you have used up all the options before going to raise external capital. This may seem a challenge – however, also an opportunity for you not only to generate proof points for your business but also having to raise less money and keep the control over your business. 

Here is where R&D funding may be a solution worthwhile to look into while you’re preparing for your capital raise. If you are eligible for an R&D tax credit, you could get paid out within a few days, which will extend the runway for your capital raising by putting you in a position of power when dealing with an investor.

The Research and development (R&D) tax incentive is the government’s key mechanism to stimulate Australian industry’s investment in R&D. R&D is often the first critical step in innovation, it drives technological improvements which lead to productivity improvements and increased economic growth.
 
Unfortunately, companies tend to underinvest in R&D for several reasons, including:

◆ not being able to capture the benefits of their R&D because new knowledge tends to leak out or ‘spill over’ to benefit competitors and the rest of the economy
◆ difficulties finding external finance because of uncertainties around the likely success of their R&D projects.

This is why the government has a role to play in encouraging industry to invest more in R&D. The tax incentive offers a way for companies to invest in R&D while alleviating some of their initial reasons for not investing.

Bourkehood

BourkeHood is one of KapVista’s Ecosystem longest-standing partners, enabling clients to prepare their R&D funding applications and uplift the R&D funding benefit they are able to claim for. By tapping into the combined experience by both technical and financial consultants, BourkeHood is able to cater to the unique needs ot a range companies across sectors and industries.

For a pre-revenue company, it can seem like selling equity is the only viable funding option. R&D tax credit finance can be a great alternative, as it leverages an asset that will materialise in the future to fund the cash needs of the present. This can be a good way of protecting the current position of shareholders and shielding them against dilution.

If you wish to find out more about your eligibility for this funding and BourkeHood, feel free to get in touch Jason, BourkeHood’s CEO and Founder.