Why Getting Doors In Your Face From Privates Seems Less Painful Than To Lose A Public Tender
Again in the series private vs. public funding, I asked my colleagues, clients, and friends if my impression that it is less painful for companies seeking funding to take a door in the face from a private funder than to lose a public tender is well-founded. They confirmed it to me and that’s what they said…
COMPANIES OFTEN THINK THAT A WINNING GRANT PROPOSAL IS ALL (AND ONLY) ABOUT COMPETENCE
When a private investor rejects your proposal, you can attribute it to their inability to see the potential of your project. In contrast, losing a public tender clearly indicates that your proposal didn’t meet the required standards, and you must accept it.
DEALING WITH REJECTION
If one private investor says no, you can approach another. However, when a public entity rejects your proposal, you might feel discouraged. But remember, there are other opportunities. Work on your project and apply for a different call. Having backup plans (Plan B) is common practice.
YOUR EMPLOYER’S BIAS AGAINST SELF-CONTROL..
The bias against self-control is the inability to pursue long-term goals due to a lack of short-term self-discipline. Investors may try to compensate for this deficit by taking excessive risks. In this case, entrepreneurs believe that they won’t be able to follow a structured competitive path and will ultimately lose. They prefer the perception of having control over managing a brief and imperfect process that still tests their limited self-discipline. This also change your perception about the effectiveness of your effort allocation: you might think that writing a pitch deck that may have limited chances of success, could still be more productive than dedicating time to writing a project for a public call where, with well-executed work, there would be a chance of success.
..AND, THE RISKS YOU DON’T WANT TO TAKE…
As an employee, you might believe your employer prefers a rejected private investor pitch over a declined public call application. You think that for him, it’s difficult to admit that his team is unable to win when competing in a path that involves objective quality evaluations. And you also don’t want him to think that you’re unskilled
NO TIME FOR ONE-SHOT OPTIONS
You can persuade a private investor over time, but public entities decide at a specific time, so you’re supposed to be at your best at that very moment.
OBJECTIVITY OF EVALUATION AND OPPORTUNISM
Private investors consider subjective factors, while public entities follow more objective criteria. Public calls evaluate proposals objectively, based on merit. If you’ve done a good job, your chances of success increase. But often you’re not sure about your project’s quality, and you need cash even if you know it’s not sounded, just because you need to start right now.
SHORT CUTS AND INTERESTS
With a private investor, you can come to an agreement in many ways. However, with a public funding provider, only the adequacy of the project matters.
CASH ON DREAMS VS. CASH ON NEEDS
Private investors often put a lot of cash into dreams, while those who provide public funding always invest a lot of cash, but in structured plans. There’s no room for improvisation.
Here, the main insight is for investors. Be careful when you come to that specific organization that claims not to be interested in mixed forms of financing. It says a lot about how sometimes private investors are perceived.