--- title: How Deep Tech Startups Can Navigate the Funding Challenges at Every Stage of Commercialisation description: Cicada Innovations and Radium Capital hosted ‘Not your usual funding conversation’, featuring a panel discussion surrounding the challenges and strategies for xxxx. Read our panel's key takeaways of the night. image: https://info.cicadainnovations.com/hubfs/CCA00047.jpg --- [![Cicada-Logo-Large](https://info.cicadainnovations.com/hs-fs/hubfs/images/Cicada-Logo-Large.png?width=200&height=273&name=Cicada-Logo-Large.png "Cicada-Logo-Large")](https://www.cicadainnovations.com) Open main menu Close main menu - [Cicada Innovations Blog](https://info.cicadainnovations.com/blog) [Deep Tech](https://info.cicadainnovations.com/blog/tag/deep-tech) [Grants](https://info.cicadainnovations.com/blog/tag/grants) [Cicada Buzz](https://info.cicadainnovations.com/blog/tag/cicada-buzz) # How Deep Tech Startups Can Navigate the Funding Challenges at Every Stage of Commercialisation ![Laura Sheedy](https://info.cicadainnovations.com/hs-fs/hubfs/Laura-5.jpg?width=45&name=Laura-5.jpg) [Laura Sheedy](https://info.cicadainnovations.com/blog/author/laura-sheedy) [Share this blog post on Twitter](https://twitter.com/intent/tweet?text=I+found+this+interesting+blog+post&url=https://info.cicadainnovations.com/blog/cicada-innovations-how-deep-tech-startups-can-navigate-the-funding-challenges-at-every-stage-of-commercialisation) [Share this blog post on Facebook](http://www.facebook.com/share.php?u=https://info.cicadainnovations.com/blog/cicada-innovations-how-deep-tech-startups-can-navigate-the-funding-challenges-at-every-stage-of-commercialisation) [Share this blog post on LinkedIn](http://www.linkedin.com/shareArticle?mini=true&url=https://info.cicadainnovations.com/blog/cicada-innovations-how-deep-tech-startups-can-navigate-the-funding-challenges-at-every-stage-of-commercialisation) ![](https://info.cicadainnovations.com/hubfs/CCA00047.jpg) Deep tech startups face unique hurdles in securing funding. Their long development cycles, high R&D costs, and complex technologies require a strategic approach to fundraising. Funding a deep tech startup isn’t just challenging, it can be a journey through uncharted territory. The path isn’t always linear, and finding the right funding at each stage can be a complex puzzle. So, how does a deep tech startup secure funding realistically?  [Cicada Innovations](https://www.cicadainnovations.com/)and [Radium Capital](https://radiumcapital.com.au/)hosted ‘Not Your Usual Funding Conversation', where we asked venture capitalists, R&D loan experts, government funding specialists, and founders, what are the challenges and the no-fluff strategies deep tech startups need to secure funding at every stage of their commercialisation journey.  Our panel featured experts [E](https://www.linkedin.com/in/emerald-scofield-8a0036175/)[merald Scofield,](https://www.linkedin.com/in/emerald-scofield-8a0036175/) [(Main Sequence Ventures)](https://www.linkedin.com/company/mainsequence/posts/?feedView=all), [Jessica Olivier](https://www.linkedin.com/in/jessica-olivier-b3616b3/)([RSM Australia)](https://www.linkedin.com/company/rsm-australia/), [Pat Stewart](https://www.linkedin.com/in/patrick-stewart-bba90348/) ([Radium Capital](https://www.linkedin.com/company/radium-capital/posts/?feedView=all)) and [Dr Venkata Gutta](https://www.linkedin.com/in/vgutta/) ([Millibeam](https://www.linkedin.com/company/millibeam/posts/?feedView=all)), who shared their comprehensive insights into how to navigate early-stage funding, the importance of strategic partnerships, and how to actually secure investments, leverage government grants, and structure businesses for growth.  Read on as they share their non-negotiables on how to secure funding for your deep tech startup. --- ### ***Early-Stage R&D and Proof of Concept  Challenges*** Deep tech startups in the 'early R&D and proof of concept' phase face significant challenges due to their inherently high-risk nature, as investors carefully evaluate founder capabilities, the potential market fit, and the technological feasibility of the innovation. Startups often operate with limited or no revenue, relying heavily on funding to support ongoing research and development. This makes managing high R&D costs and controlling cash burn critical. Founders must not only convincingly demonstrate the technological feasibility of their ideas, but also prove their potential for real-world applications beyond the lab. Securing early industry partnerships and validating customer interest is essential but challenging. Furthermore, aligning R&D efforts with actual market needs is crucial to ensure commercial viability. To navigate this, it is recommended that startups should: - Build credibility and trust with potential investors, focusing on strengthening relationships with venture capitalists (VCs) early, even before seeking funding. - Leverage government funding options, such as R&D grants and state incentives: [NSW MVP Grant](https://www.investment.nsw.gov.au/grants-and-rebates/mvp-ventures/)and the [NSW Small Business Innovation & Research (SBIR) Program](https://www.chiefscientist.nsw.gov.au/funding/research-and-development/small-business-innovation-research-program), with strategic planning and meticulous documentation. - Showcase founder capability and "get shit done" attitude. - Supplement technical expertise with commercial acumen. - Navigate the complexities of early-stage intellectual property protection by creating a clear IP strategy and getting legal advice early on. - Start developing a clear picture of the target market. ### ***Prototyping & Early Trials Challenges*** During the 'prototype and early trials' phase, deep tech startups face the critical challenge of licensing the technology, commencing trials and proving technological feasibility with real-world applications, while also managing high R&D costs. To overcome this: - Utilise government funding, such as the [R&D tax incentive](https://business.gov.au/grants-and-programs/research-and-development-tax-incentive) and commercialisation grants, including the [Industry Growth Program. ](https://business.gov.au/grants-and-programs/industry-growth-program)Speak to [Radium Capita](https://radiumcapital.com.au/radium-advances/)l for more information. - Prioritise early customer engagement and gather real market interest over Letters of Intent (LOIs). - Focus on demonstrating key metrics that potential customers require. - Seek feedback from potential future investors on what milestones are needed to secure further funding. - Begin to build a strong network of potential customers and industry partners. ### ***Transitioning to Commercialisation Challenges*** The 'transitioning to commercialisation' stage presents deep tech startups with the significant challenge of securing substantial funding for production and team growth, requiring a delicate balance between securing certifications, equity, grants, and loans to avoid dilution. The complex transition from R&D to manufacturing and market entry demands strategic partnerships and collaborations, while long-term sustainability hinges on meticulous planning and securing consistent funding. To navigate this, startups need to:  - Leverage government grants for manufacturing and export market development, such as the [Export Market Development Grants (EMDG) program](https://www.austrade.gov.au/en/how-we-can-help-you/grants/export-market-development-grants), [Future Made in Australia,](https://www.minister.industry.gov.au/ministers/husic/media-releases/grants-now-open-support-future-made-australia)[NSW innovation and manufacturing](https://www.energy.nsw.gov.au/business-and-industry/programs-grants-and-schemes/net-zero-manufacturing)and [Manufacturing Modernisation Fund Round 1.](https://business.gov.au/grants-and-programs/manufacturing-modernisation-fund-round-1) Speak to [RSM Australia](https://www.rsm.global/australia/grants-government-incentives-hub) for more information and check out [Grant Connect](https://www.grants.gov.au/) for all grant opportunities, nationwide, tailored to each sector.  - Explore strategic partnerships, including collaborations with competitors, for market access and industry insights. - Develop a comprehensive financial plan that includes a mix of funding sources. - Focus on demonstrating a clear path to revenue generation and profitability. - Ensure proper legal and financial setup to prevent future issues. ### *Scaling and Market Entry Challenges* For deep tech startups aiming for global expansion, securing significant funding within Australia is often difficult, compelling them to seek international investment. To attract growth and investors, they must clearly showcase strong revenue potential and the ability to scale. Cultivating relationships with these investors and aligning with their expectations is paramount. Successfully navigating the complexities of diverse international markets and regulatory landscapes is a key challenge, requiring a robust and experienced leadership team to manage the expansion effectively. ### Startups during this stage need to: - Build relationships with growth investors early and understand their expectations. - Explore government export grants and venture debt. This includes the [EMDG program](https://www.austrade.gov.au/en/how-we-can-help-you/grants/export-market-development-grants) (see above) and the [Venture Capital Limited Partnership (VCLP) Program. ](https://business.gov.au/grants-and-programs/venture-capital-limited-partnerships#:~:text=About%20the%20program,grow%20by%20receiving%20financial%20support) - Focus on demonstrating a strong track record of growth and market penetration. - Build a well-structured company with an experienced leadership team. - Consider international expansion strategies and build global networks. ### Key Takeaways For Founders: 1. **Prepare Early** – Start conversations with investors and grant bodies before you need funding. 2. **Leverage Non-Dilutive Funding** – Grants and tax incentives can complement equity financing. 3. **Customer Validation is Crucial** – Engage with potential customers early to guide R&D efforts. 4. **Structure Your Business Right** – Proper legal and financial setup prevents future issues. 5. **Build the Right Team** – Hiring commercial expertise alongside technical talent is key. 6. **Strategic Partnerships Matter** – Collaborating with competitors and industry players can accelerate growth. 7. **Plan for the Long Game** – Fundraising takes time, so always be thinking a few stages ahead. --- ### Help resources for deep tech startups  [Sign up today to get first access to our events and programs to help commercialise your startup. ](https://share.hsforms.com/1mkOmxmirSb6VsC36_cIh-g4yipa) If you are a startup solving the world’s most pressing problem, then get expert advice and support and [become one of our residents. ](https://www.cicadainnovations.com/incubator) ## Related Articles [![](https://info.cicadainnovations.com/hubfs/CCA00089.jpg)](https://info.cicadainnovations.com/blog/cicada-deep-tech-icons-niki-scevak-blackbird-venture) [Deep Tech](https://info.cicadainnovations.com/blog/tag/deep-tech) [Cicada Buzz](https://info.cicadainnovations.com/blog/tag/cicada-buzz) [Cicada News](https://info.cicadainnovations.com/blog/tag/cicada-news) ### [Cicada Deep Tech Icons: Niki Scevak, Blackbird Venture — Lessons in Building, Backing, and Believing in Australian Startups](https://info.cicadainnovations.com/blog/cicada-deep-tech-icons-niki-scevak-blackbird-venture) As we celebrate 25 years of Cicada Innovations, it’s a moment to reflect not just on what we’ve built, but on the people and ideas that have been part of the story. 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