We will post anonymised answers to any questions we receive on this page.
These Q&A are updated on a regular basis. We endeavour to answer new questions within one week of receiving them.
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Application
Q: The workplan template indicates sub-totals for overseas, travel and marketing spend to help ensure submissions is within parameters for those elements vs the total expenditure. However, it doesn't seem to allow for dual categorization where Marketing or Travel spend is also overseas. How should we account for this, where applicable?
A: Please add the cost to both boxes e.g. if your total overseas activities including marketing are $10,000 and overseas marketing is $5,000 you will have $10,000 in the overseas box and $5,000 in the marketing box.
Q: Hello, several of the columns in the cashflow template available via IMS aren't totalling correctly. Please can you provide an updated template? Thanks
A: Cash flow has now been updated and corrected version loaded.
Q: 1. RE the Cash Flow template, could you please clarify what our "Q1 commencement date" should represent? In the application 6.2.2 it states "...covering the two-year grant period", which would imply earliest ~1 November 2023 (following the Grant Evaluation Panel meeting). Our "Opening Bank" will need to be an assumption and cannot be validated via provided bank statements given it will be a date in the future however.
2. Also RE Cash Flow template, question 4.4.1 specifies requirement for "including forecasts on the amount of money we will spend on key operations such as marketing, sales...". There is only 1 line for Operating Expenses in the template, assume you are happy for us to butcher your template and add rows to satisfy this question? Or would like us to simply describe and articulate assumptions and not quantify those costs?
A: 1. We are comfortable that your opening balance will be an estimation and you may also upload supporting evidence in terms of current cash holdings and expected revenue/outflows between now and 1 November if you wish.
2. Please describe/articulate the assumptions. Thank you.
Q: Under 4.4 Commercial Viability: 4.4.1 Business model and financials, the instructions say that we should 'include a two-year forecast of financial information relative to your innovation project - this should contain dollars and key metrics/assumptions such as the number of customers and conversion rate'. The Arohia Full Grant Cashflow Forecast template is for a two year period and includes a line for sales revenue.
How are the number of customers and conversion rate relevant when the cashflow period is for the innovation project when we are completing pre-market launch activities (ie not in market)?
Are you wanting to understand the forecast after we have launched the product? ie should we include forecasts for once we are 'in market' ie after the 2 year period.
A: If your innovation activities are for 24 months and are all pre-launch then the cashflow does not need to include revenue assumptions relating to the sale of the innovation. You may wish to include such information if your pre-launch period/grant period is less than 24 months in order to complete the two years of the cash flow.
Q: RE the Cash Flow template: Is this meant to reflect our total business expenditure, or just the eligible expenditure as defined by the Ārohia Grant plus revenues identified for this Project? The grant covers max 24 months, but if we plan to get to market by, say, December 2024, our coverage from Ārohia will only be assumed as 12 months (earliest starting point assumed 1 Nov 23), should our cash flow forecast then extend beyond 12 months? Naturally, our opening cash balance will also be a forecast at that point as our business is already operating. I'm struggling to get my head around the link between the work plan and the cash flow template. Thank you
A: For the cashflow we will use this to assess your ability to support the project. Please include your full business expenditure and expected cash inputs from any capital raising or shareholding funding and include expected costs and inflows from your Ārohia related activities. If you intend to only uptake the grant for 12 months a projection only over that time would be acceptable however we may require you to update this should you need to utilise the full 24 months of the contract. The total project expenditure across your project work sheet and cashflow should align.
Q: Business model and Financials; a two-year forecast of financial information - completing cashflow template provided Callaghan sufficient for this section? or do you require an applicant to provide a full set of financial forecast P&L, Balance sheet and cashflow for the business or for the innovation project only?
A: With respect to forecast financial information all we require is a cashflow forecast for your business including the impacts of your project - you can use our template for this. As part of due diligence we also require Balance Sheet, P&L and supporting evidence for capital raising or additional shareholder funding.
Q: Can you please clarify how many times seed and full grant funding can be applied for, for the same innovation?
A: You can apply a second time if you are unsuccessful the first time for each innovation and for each grant, however if you are declined for the Seed Grant you may wish to consider your preparedness for a Full Grant application.
Q: Hypothetically if our project will actually cost, say, $15m, should we include all expenses in our work plan knowing that only the first $13.3m is eligible for the 30% co-funding?
A: Yes, as you need to demonstrate you can fund the project in its entirety between the grant and your co-funding.
Q: Will the assessment panel be judging or evaluating the science behind any science innovation? If so, will they be appropriately qualified, or should we spell it out in basic terms? Reason for asking - we have previously had people reject applications because of their ignorance about a certain aspect of our science. Thx.
A: We cannot guarantee that the Screening Committee and Grant Evaluation Panel will have a deep understanding of every area of expertise.
For this reason, it may be best to ensure that your application and pitch is presented in a way that is able to be understood by a wider audience. This is often good practice for any investor engagement.
Q: Can/should we use more than one ANZSIC code? Should the ANZSIC code link to novelty, or the specific sector we operate in?
A: Your ANZIC code is what is applicable to the business entity you are applying under.
Q: If your new idea covers a range of industries re having an impact on innovation, is it better to cover all the sectors your idea impacts or focus on one?
A: We aren't able to provide answers to questions relating to specific applications.
However, the assessors will assess applications in line with the assessment framework based on how strong the reach and impact of those benefits are.
Q: Where to find the application form. Only via a Navigator?
A: A pdf version of the application form questions is available on our website here. However, to gain access via the online portal, you must first speak to a Navigator or Funding Engagement Specialist.
Q: What is required to meet the July 28th requirements?
A: If you wish to apply for the Full Grant in this first funding round, you will need to have begun a Full Grant application in IMS. Please note that having access to IMS does not meet this requirement, as a Full Grant application may not have been started.
If you don't start a Full Grant application by 28 July 2023, you won't be able to submit an application for this round. However, you will be able to submit a fresh application when the next round opens on 12 February 2024.
Please note that applications must be completed and submitted by midday 24 August to be considered for this first assessment round.
Q: If the Seed Grant helps me prepare for the Full Grant, can I use it to co-fund paying grant writers for the full? Thinking this is basically a 'professional advice/service' to help design business strategy etc.
A: Yes.
Q: The full application form is detailed. Can you address the purpose of the pitch given all evidence is supplied upfront? Is the application process still constestable at the pitch stage?
A: The application process is still contestable at the pitch stage. The purpose of the pitch has two parts. The content of the pitch and any Q&A that follows from the Panel helps them contribute to the application assessment. It also has a number of benefits for the applicant.
These include:
- An opportunity to describe challenging aspects that are difficult to relay in written form
- The process mirrors what is out in the investment ecosystem. By going through this process, applicants will know what to expect elsewhere
- It allows the applicant to receive direct, verbal feedback from the Panel, and written feedback with the benefit of back-and-forth Q&A.
- Facetime with high profile Panel members who are well known in the business world - Having become a finalist results in promotion opportunities through Callaghan Innovation, recognising an applicant's achievement in making it to the live pitch event.
Q: If your base product has attachments (which are also novel to the market) - can it all be considered in one application?
A: Yes.
Q: Please can you provide an indication of how long the grant application is likely to take?
A: The timeline for processing the Full Grant is set out on our website here.
However if your question is how long will it take to complete the application form, we are unable to advise on this as it will depend on how fully prepared you are for the questions. You can view the application form here.
Q: Will feedback be provided for those who don't make it through the initial screening? And also for those who are successful in making it through the screening to submit a Full Grant application, will they receive feedback from the screening?
A: Yes, those who do not make it through the initial screening will receive feedback on their application from the Screening Committee.
Applicants who are progressed to the shortlist (and Panel event) will not receive feedback on their application from the Screening Committee. Instead, they will receive written feedback from the Grant Evaluation Panel, as well as the output of the independent research on potential benefits to the innovation ecosystem prior to the Panel event.
Q: Can companies apply for the grant multiple times with different innovations? i.e. one now and one in 18 months?
A: Yes, multiple applications can be submitted provided they are for different innovations.
Q: Is the pitch confidential between applicant and panel only?
A: Any notes taken from the panel meeting will be used towards determining a recommendation to the final approvers within Callaghan Innovation. However it is not intended that the pitch sessions will be recorded.
Q: For the first round review process what is the possible start date? (need to put this in the application)
A: You may nominate a start date but it cannot be before the date of the Grant Evaluation Panel meeting, and no more than six months after this date.
Q: Are we able to improve and submit our application over the course of the submission window? Or would you prefer for us to be completely confident in our submissions, prior to submission?
A: Your application can be submitted once per funding round and you have up to two opportunities to apply for the same innovation. We encourage you to be completely confident in your application prior to submission. You may wish to use the maximum amount of time available to consider and review your application before submission. Applications are assessed together only after the application round is closed so you won't receive any feedback from us prior to the application close off date.
Q: If we apply for the Full Grant and fall short, yet our application is well-above the desired standard for the Seed Grant, is it possible that we be automatically relocated into that application process?
A: Not as the process currently stands. If you are intending to apply for the Full Grant, and still have gaps in your knowledge of your innovation or its target market that need to be resolved, we strongly recommend that you consider applying for the Seed Grant. The Seed Grant is there to help you produce a quality application for the Full Grant. It's also worth reminding potential applicants that as the process currently stands, you are only allowed a maximum of two attempts at an application for the same idea. It may be wasteful to make an application if you're not yet ready.
Q: If you are unsuccessful in the first round, can you tweak and reapply in the next round?
A: Yes, you have two opportunities to apply with the same innovation.
Q: If we receive an Ārohia Seed Grant, when can we apply for the Full Grant? Are there restrictions regarding how they might overlap?
A: You may still have a Seed Grant active while applying for the Full Grant. However, you must close it before you can receive a signed Funding Agreement for the Full Grant. As with all our grants, you cannot claim for duplicate costs across multiple applications.
Q: Is it possible to apply for the Seed Grant for one product and Full Grant for another?
A: Yes. There is no limit to the number of applications one entity can submit. However each application must be for a different innovation.
Eligible Activities
Q: Hello, in your notes describing "Eligible Activities" on the table on page 15, there is reference to the fact that Ārohia Full Grant supports "getting your innovation into the first target market", and "does not fund expansion beyond the market targeted for a first market launch"?
Does this mean we can only apply for this funding to target one geographic market, or one customer segment in our launch?
Or is this in reference to our overall innovation for which we are apply for funding? (ie we can include all activities that go towards launching this innovation to market, in whatever geographies or customer segment may be relevant?)
A: This is in reference to the overall innovation - activities are eligible up to the point you fully launch in your first market, whichever market(s) they may be. Once you have launched in a market (whether NZ or overseas) we consider further expansion into additional markets to be internationalisation which is beyond the scope of this grant - Please contact NZTE for support with internationalisation.
Q: Cash flow template question. Does the grant match or ignore the COGS? Is revenue from pre-launch/ beta customers subtracted from the Callaghan matched fund amount? e.g. If Operating costs are 500k, COGs are 100k and revenue is $100k, how would you calculate Callaghan's contribution? If part of a project is developing a prototype into a working product, and that product can be used to demonstrate capability to a beta customer however has a limited lifetime, where should the materials and assets for building that product sit? COGs, capital (you can't resell it), or operating costs?
(Does the grant match or ignore the COGS?)
A: The COGS item in the cash flow forecast template is to show the COGS of the sales revenue, both business-as-usual items. The grant helps fund eligible activities involved in taking new innovation to the market for the first time. The costs are only eligible if they directly related to the approved innovation project, not business-as-usual activities. If you are already accounting for cost of goods sold, you need to ask yourself whether the innovation is already in the market, which makes it ineligible.
(Is revenue from pre-launch/ beta customers subtracted from the Callaghan matched fund amount? e.g. If Operating costs are 500k, COGs are 100k and revenue is $100k, how would you calculate Callaghan's contribution?)
A: Yes, if the pre-launch/beta customers pay to use your prototype, then you can claim the net cost to construct/use a prototype (i.e. after subtracting the amount customers have paid to use it).
(If part of a project is developing a prototype into a working product, and that product can be used to demonstrate capability to a beta customer however has a limited lifetime, where should the materials and assets for building that product sit? COGs, capital (you can't resell it), or operating costs?)
A: Materials and consumables used to develop a prototype are to be charged at cost (i.e. no mark-up). Where these costs sit depends on the nature of the prototype. If the prototype or demonstrator includes items of machinery, equipment or tools that have an enduring value beyond the project term, then you can claim the net cost to construct a prototype (i.e. after subtracting the cost of machinery, equipment or tools used that have an enduring value). The cost of machinery, equipment or tools used that have an enduring value should be claimed separately as depreciable plant or equipment items.
Q: On IP spending: Are registered designs included in Seed Grant or Full Grant funding?
A: Registered design costs are eligible under Full Grant but not under Seed Grant.
Q: What constitutes “non-R&D research”? Example please.
A: R&D is what’s defined as R&D under the R&D Tax Incentive (RDTI); Activity that seeks to resolve a scientific or technological uncertainty, and any supporting activity that’s integral to resolving that uncertainty.
Please refer to the RDTI website for more information.
Q: There is usually R&D required to cement a patent (data in biotech/health)- so was just trying to understand where one starts and finishes in terms of application costs vs R&D costs?
A: The distinction is on a costs basis - while performing R&D you may be incurring costs to overcome technological uncertainties (R&D) while also incurring other costs which are not R&D but essential to the success of your innovation such as patenting. While patenting is something you often do to secure your IP which resulted from R&D it's not an eligible R&D cost for the purposes of funding - this is where Arohia can help alongside the likes of RDTI which is R&D focused.
Q: Can offshore partners consultants be used? E.g. regulatory expertise for FDA in healthcare.
A: Yes, providing it's essential to taking the innovation to market and does not negate benefits to the NZ innovation ecosystem. Refer to the eligible activities guidance on page 11 for more information.
Q: I don't understand the line between R&D and not R&D and in market - e.g., I would have thought patent costs fall into R&D, they certainly would in biotech. Can you help draw the line please?
A: The distinction is on a costs basis - while performing R&D you may be incurring costs to overcome technological uncertainties (R&D) while also incurring other costs which are not R&D but essential to the success of your innovation such as patenting. While patenting is something you often do to secure your IP which resulted from R&D it's not an eligible R&D cost for the purposes of funding - this is where Arohia can help alongside the likes of RDTI which is R&D focused.
Q: If clinical trials are required to meet regulations, can Arohia funding be applied to this or is this placed in the R&D basket?
A: Clinical trials are generally covered under R&D funding mechanisms such as RDTI. There are however elements that sit around clinical trials such as patent filing, pre-production preparation, non-clinical end user testing and channel development (such as reimbursment strategy development and execution) are eligible under Arohia.
Q: Can founders and shareholders salaries be claimed?
A: Yes provided they are paid by the business. Check out the eligible costs in our guide.
Q: Are resource consent application costs eligible?
A: These costs would fall under capital expenditure rules with the exception of costs that relate to new regulation specific to your innovation, e.g. in the first instance, a resource consent for a retaining wall or factory would sit under capital expenditure rules (providing it was essential to the innovation), whereas gaining a resource consent because an activity is novel or facing new regulatory hurdles would be an eligible cost.
Refer to the eligible activities guidance for detailed information on what costs are eligible.
Q: Can you please provide more information on what capex costs are permissible?
A: Refer to the eligible activities guidance for detailed information on what costs are eligible.
Q: Question re a Technology Stack. Each element of the stack is in the market place however the functionality of the stack provides new innovation in new markets. Is the Technology Stack eligible?
A: Broadly yes, innovation can be the combination of known existing offerings to deliver new value to market. It will be up to you to state a clear case for why your combination is novel and creates benefits to the New Zealand innovation ecosystem.
Q: Could a pilot plant built to demonstrate technology be eligible for the grant if it also is able to produce some product for commercial sale?
A: Yes. Refer to the eligible activities guidance on page 9 for more information.
Q: Is it possible to apply for both grants if you have an R&D and commercialisation component to your business operations which meet the Ārohia criteria?
A: Your business may be undertaking R&D but you cannot use Ārohia Grant funding for R&D expenses (you can however be receiving support for R&D through New to R&D or RDTI).
Refer to the Full Grant eligible activities guidance for more information.
Refer to the Seed Grant eligible activities guidance for more information.
Q: Is overseas expenditure eligible?
A: Yes, providing it's essential to taking the innovation to market and does not negate benefits to the NZ innovation ecosystem. Refer to the eligible activities guidance on page 11 for more information.
Q: So it’s not for R&D and not for in-market products?
A: Correct. We would note that R&D in this instance is as per RDTI definitions which is limited to activities that contain a core of research seeking to overcome a technological uncertainty - this is narrower than the accounting definition of R&D. There are many areas of development and non technological research that sit between the overcoming of a technological uncertainty and getting an innovation to market - these are the activities which Ārohia seeks to support.
Q: Can overheads be part of the contribution? i.e is the contribution for fully costed or actual spend?
A: Overheads can be charged at 20% of internal labour costs. Refer to the eligible activities guidance for more information.
Q: Can you please clarify the distinction between an R&D project suitable for the RDTI, and activities suitable for this grant when there is innovation surrounding an eligible R&D activity, and how you should draw the line between the two?
A: Essentially R&D as per the RDTI definition is activities that seek to overcome a technological uncertainty and the essential activities which support them. For more information on R&D activities suitable for RDTI, refer to the RDTI website or page 32 of the RDTI guidance document.
There are many activities on an innovation journey that fall outside these such as market testing, demonstrator units, etc. Refer to the Full Grant eligible cost guidance for more information on both eligible activities as well as delineation between R&D and more general innovation activities.
Eligible Entities
Q: Any comments on syndicated proposals involving research partners such as Public Research Organisations, Academic Institutions and Iwi (cash and in-kind contributions)?
A: Entities that are owned by the government are ineligible for this funding. We suggest you talk to us about your specific proposal so that we can understand the details, alternatively refer to the eligible entities guidance for more information.
Q: Please confirm Limited Partnerships are eligible? Rules say yes, but 'partnerships' are on ineligible list - is that unincorporated partnerships not Limited partnerships?
A: Yes, Limited Partnerships are eligible. Refer to the eligible entities guidance for more information.
Q: Does the company have to maintain over 50% NZ ownership? If external funding comes from overseas and reduces NZ ownership will this impact the grant funding?
A: Overseas owned companies are eligible for the grant provided that the benefits flow to the New Zealand innovation ecosystem. If your ownership changes during the course of the grant, we will undertake an assessment to ensure the benefits remain. Refer to the eligible entities guidance for more information.
Q: Are charitable companies eligible?
A: The Ministerial Direction sets out the requirements for eligible entities. If the company is registered and incorporated under the Companies Act 1993 then it will be eligible. Charitable trusts and unincorporated charities are not eligible. Refer to the eligible entities guidance for more information.
Funding
Q: Below is a Q and A from the website, can you please clarify further as it would appear the answer is unclear.
Question: Can investor funding be staggered or does the whole of funding need to be in place within the six months?
Answer: We will accept contractual agreements for tranched funding so you don't have to have the money in the bank but you must have contractual agreements in place. You have up to six months from the date you sign the funding agreement to secure the additional funding, but you must have a robust plan in place to do so when you apply. We will not pay any claims until the funding has been secured.
This answer is not clear.
The phrase “you must have contractual agreements in place” is different from “you have six months (after being awarded and signing) to secure the additional funding” is completely different.
Clarification would be welcomed, particularly the minimum you are looking for us to have achieved/in place by close of the application phase (24th August)
A: At the time of application you must have a plan in place to raise funds but you do not need to have these in place. If you are successful you then have up to six months to secure contractual agreements for this funding - it is at this point that your funding will become active. To reiterate you don't have to have the funding in place to apply and be approved but you must have the funding in place (at least contractually) within six months of being approved in order to activate your grant.
Q: Assuming we are successful, and our project has already began and we hypothetically expect to launch in market and begin sales in, say, Sept 2024 - our grant then covers 10 months. Inevitably, our timeline might move and we might end up needing to spend more on eligible marketing activities and less on eligible prototyping activities, for example. How does this impact our funding arrangements? Are we limited specifically by the buckets and $ we have originally stipulated in our Work Plan? How will the claiming and cash flows in terms of the grant $$ work in practice? (sorry for the long Q!)
A: We recognise that uncertainty exists in taking any new innovation to market. We cannot fund you in excess of the initially approved total funding envelope however your contract will be for 24 months and you can move costs between objectives in consultation with us.
Q: Is it possible to be engaged in the Ārohia initiative in tandem with New R&D Grant initiative?
A: Yes - the New to R&D can cover your R&D and Ārohia can cover how you will deliver benefits to the innovation ecosystem.
Q: Must not be in market: Is that at time of apply/win, or anytime during? So would my funding suddenly freeze once I make the first $1 of sales? i.e. I have to delay sales till after grant finishes?
A: You cannot be in the market with the specific innovation at the time of application. Pre-sales and paid pre-market trials are fine to be undertaken and supported with Ārohia funds however once the innovation is fully in market your funding would cease. The intent of Ārohia is to support companies seeking to take their innovation to market for the first time hence we wouldn't continue to fund you through this scheme once you were in market.
Q: The contracts required for 70% have to be in what form?
A: You will need to demonstrate that you can fund your 70% share of the costs. If you have already secured funding this will need to be shown in the application.
This will either need to be funds you have already secured, or you will need to have a robust plan on how you intend to source it.
Your 70% share of co-funding must be monetary. 'In kind' contribution will not be considered.
Q: Can you explain more about the co-funding process in terms of how those funds, provided by us, are verified? What processes are involved?
A: Full financial due diligence will be conducted incorporating a review of your Balance Sheet, Profit & Loss, Cash flow forecast and any supporting documentation that demonstrates how you will raise the funding you will require if you do not already have sufficient cash reserves to fund your share.
Your 70% share of co-funding must be monetary. 'In kind' contribution will not be considered.
Q: Why such a large funding gap between Seed and Full? How do you assist in between?
A: The Seed grant is to help you with evidence to support your Full grant application, it is not intended to definitively answer the full grant questions or execute on your project.
Q: Can investor funding be staggered or does the whole of funding need to be in place within the six months?
A: We will accept contractual agreements for tranched funding so you don't have to have the money in the bank but you must have contractual agreements in place by the end of those six months. You have up to six months from the date you sign the funding agreement to secure the additional funding, but you must have a robust plan in place to do so when you apply. We will not pay any claims until the funding has been secured.
Q: How strictly do you have to stick to the expected costs as set out in the initial application?
A: You may or may not incur all the costs that you state in your application. Any underspend can just not be claimed however, you cannot increase the amount of the grant once it has been approved.
Q: As a new business, does the co-investor funding take into consideration the capital already put into the business to date. EG: initial start up equipment purchases?
A: If that investment contributes to the cash on your balance sheet, then yes, however investment in kind will not count. It would be expected that assets already owned by the business are not included in costs in the grant application.
Q: Just to clarify, if we had investment commitment for the full amount but the investor wants to tranche the funding against milestones, would this qualify for full funding? Or do we need the cash in the bank within the six months?
A: We will accept contractual agreements for tranched funding so you don't have to have the money in the bank but you must have contractual agreements in place by the end of those six months. You have up to six months from the date you sign the funding agreement to secure the additional funding, but you must have a robust plan in place to do so when you apply. We will not pay any claims until the funding has been secured.
Q: Can you use another grant as co-funding? e.g. low emissions transport fund.
A: No. With the exception of equity investment you cannot use other government funding to co-fund this grant.
Q: Do in-kind contributions count towards the 70%? e.g. software development partners who are prepared to provide developer resources for equity.
A: No. You must be able to demonstrate that you can cover your 70% of costs. In kind contributions cannot be included as costs.
Q: If we received funding from the Low Emissions Transport Fund, could we use this for our co-funding with Callaghan? The LEFT funding is also co-funding, so it would be vice versa with that.
A: No. With the exception of equity investment you cannot use other government funding to co-fund this grant.
Q: I understand we need to have evidence that the company can cover its share of costs. However the grant period is up to two years. For most companies who have raised capital, their runway is often not more than 18 months. Then they do another round e.g. they have completed a seed round which covers the first phase and then will do a series A. Thus the grant has the potential to span two investment cycles i.e. the company has its share of costs for, say, the first 12 months and will raise to cover the final 12 months of activity? The innovation path is unchanged. Is this workable in the grant?
A: The Grant Evaluation panel will need to be confident that you can cover your 70% share of the costs over the two year period. Your strategy to raise capital will need to be robust.
Q: Are there any issues with using both the Full Grant and the NZTE springboard grant for the same innovation?
A: You can have them at the same time but you can't apply the funding to the same activities i.e. stack the funding support.
Q: If the project proposed is so commercially attractive that it can be co-funded by multiple entities for whom the result is highly beneficial, is the 70% funding able to be shared by multiple entities? Only one entity would undergo the project, but several entities may be willing to invest capital tied up in the eventual output of the project.
A: Yes that is acceptable.
Q: Is there a requirement to demonstrate the need for funding (as opposed to showing that co-funding can be confirmed).
A: You will need to demonstrate that you can fund your 70% share of the costs. If you have already secured funding this will need to be shown in the application.
Q: Would companies be advantaged if they have already secured funding that matches the project lifetime? Particularly for larger applications that require $13m co-funding for a $4m application
A: No. Availability of funding is not a specific assessment criteria that is scored and will not influence whether a grant is awarded, provided an applicant can demonstrate they either have funding secured or have a robust plan to achieve funding.
Q: We are planning to convert SAFE notes in our first priced round over the next couple months. Based on the grant timeline, would our priced funding round count if we are later on accepted for the grant?
A: You will need to demonstrate that you can fund your 70% share of the costs. If you have already secured funding this will need to be shown in the application.
Q: If we are unable to meet the 6-month funding round requirement (eg. aim for our 70% is $1m and only get $800,000) would the funding from Ārohia be adjusted and time frame etc. or does this simply void the possibility of any funds from this grant?
A: This would depend on the circumstances and whether there is any opportunity to either adjust costs or raise further funding. If this were to happen, we would expect to enter into discussions with you regarding the way forward.
Q: Can your own past investment in your innovation count towards the 70%?
A: If that investment contributes to the cash on your balance sheet, then yes, however investment in kind will not count.
Q: Can the Grant fund costs already incurred? An example is our ongoing compliance costs that we wouldn’t stop to wait for the Grant, but are valid in the application. Is there a hard date that draws a line in the sand and spend accrues from that date only?
A: No - costs are only eligible from the start date of the grant.
Q: This seems like a good idea, but with a major flaw: funding in arrears is one of the biggest problems. This doesn't reduce the risk to trailblazers facing new market creation, changing the game - is it possible that smaller innovators could be funded in advance and not in arrears?
A: The funding model we have to manage on behalf of the government dictates this way of operationalising the funds.
Q: Do we have the first 6 months to get all our 70% funding in the bank - or could part of this come in later, in a later funding round, within the two year period?
A: We will accept contractual agreements for tranched funding so you don't have to have the money in the bank but you must have contractual agreements in place by the end of those six months. You have up to six months from the date you sign the funding agreement to secure the additional funding, but you must have a robust plan in place to do so when you apply. We will not pay any claims until the funding has been secured.
Q: It’s a rebate not a grant. You have to have significant funds already, this doesn't help new businesses. It’s a big gulf between $12.5k prepayment in phase 1 and the potential rebate available in phase 2. Do I understand that correctly?
A: One of the features on the full grant is that you can have up to six months after approval to raise the additional funds required and we will accept investment contracts in place of actual cash in the bank. Both Arohia Grants are co-funding grants so you must raise the remaining funds yourself - we have deliberately aligned much of the application process to standard capital raising approaches with the aim of reducing duplication of work for you in this space. Funding claims can be made as often as every two weeks during the project to ensure you're receiving funds as soon as possible after spending on your project.
Q: Claims are in arrears but I assume they can only go back to the start date of an approved Ārohia contract. i.e. I can't claim costs being incurred today?
A: Correct, this also includes any costs where the activity has not yet taken place but was booked and paid for prior to the grant start date (e.g. travel, conference).
Q: Does it matter where you get the money for the self-fund portion of the co-fund (eg, VCs)? Also does it matter for the timing on when you get the money?
A: Providing the funding is not from another government fund (apart from NZGCP investment) it's up to you where you source your funding. You have up to six months from the date you sign the funding agreement to secure the additional funding, but you must have a robust plan in place to do so when you apply. However, we will not pay any claims until the funding has been secured.
Q: Is funding paid in advance or rebated?
A: The Full Grant co-funding is rebated (claimed in arrears with proof of expenditure).
Grant Recipients
Q: How does the approval process work? Specifically if a submission meets the criteria guidelines will this constitute an approval? Also, are approvals based on their merits individually or within the applications presented to the panel at one sitting. Ie. 5 out 10 applications per panel on average get approved, however the second 5 could theoretically be stronger applications than the next day panel session but wouldn’t make it due to the nature of the procurement process?
A: The assessment and approval process is described on our Full Grant web page. No grants are approved until after the Panel event. Prior to this, applicants are selected to progress or not progress at three different stages; at internal screening, due diligence and the Panel event. Progressed applications are selected based on merit in competition with other applicaitons being assessed in the same round. Out of the shortlist, approved applications are selected based on both merit and the available funding for that particular round.
Q: For successful applications, what is expected in terms of reporting, publicity, etc?
A: We must publish recipient, project title and amount of funding received on all approved funding. We are keen to support recipients to find ways to promote their work and gain beneficial exposure - we will work with customers on a case by case basis.
Q: After applicants for the full grant are notified of the outcome in November, what is the maximum time window before the 2-year project period begins?
A: The usual start date of the grant will be the date of the Grant Evaluation Panel meeting, however, consideration may be given to a delayed start date of up to 6 months if requested. Start dates cannot be backdated.
Q: What marks the end of the two-year project? Given the project pertains to either a product, process, or business model with a commercial application, a successful project should almost by definition have no clear end. How do the two years get delineated from the ongoing evolution of the successful project?
A: The end date of the grant will be two years from the start date. Funding will cease at that point even if your innovation strategy is not complete.
Q: If a grant recipient is able to demonstrate sufficient progress against a larger project within a two-year period which satisfies the other constraints of the full grant, is this sufficient? For example, for a project that takes, say four years overall but is significantly higher-impact and more commercially attractive than those from competitive applicants, if one can articulate a set of milestones achievable within two years can that be sufficient?
A: Yes. We recognise that not all innovations will get to market within the two year timeframe so your project may be a subset of the overall milestones of a larger project or journey to market.
Grant Delivery
Q: The full grant is contestable. If for that reason a company is not successful for the first application, could that company use the same application for a second round?
A: Yes, you may apply twice for the same innovation if you are unsuccessful the first time.
Q: How many contestable funding rounds will be held each year? When is the next one after the current one?
A: The next round opens on 12 February 2024. Please refer to our website.
Q: We were planning on applying for the Seed Grant to finalise a couple of issues in the next 4 - 8 weeks, and also apply for the Full Grant to bring the full innovation to market. Will applying for both at the same time be any issue?
A: Given the cut-off date for new Full Grant applications was on 28 July 2023, you will not be able to apply for this particular round of the Full Grant.
The Seed Grant will continue to remain open and accept applications, so this will still be available to you in order to help you resolve any uncertainties before applying for the Full Grant in the next funding round.
In general there is no rule preventing you from applying for the Seed Grant and Full Grant at the same, for the same innovation.
However, if you apply for a Full Grant and Seed Grant at the same time for the same idea, you will not receive tailored advice on either application. This is likely to disadvantage you, especially given you will have uncertainties that you are wanting to resolve in order to put your best foot forward for the Full Grant. It is also worth reminding that you are allowed two attempts to apply for each innovation.
Q: When will the panel be announced? Do we know what backgrounds, at least, the people are from? Are they VCs, Callaghan representatives, etc.
A: We're unable to provide dates or details on Panel members yet, as we are still undergoing the procurement process.
However, we can say that the Panel will be made up of a number of individuals with diverse experience across the innovation and investment ecosystems. The majority of the members will be external to Callaghan Innovation.
Keep an eye on our website, as we will provide updates and short biographies of our Panel members when we have confirmed them.
Q: The Full Grant application start cut off was on 28 July 2023. Does that mean that Seed Grant will be over?
A: That date is for Full Grant. Seed Grant will continue to be open and will continuously accept applications.
Seed Grant will still be relevant for those who want to prepare for the next Full Grant funding round.
Q: If we are successful with the application does the grant cease when it goes live in NZ or can it continue as we continue to get into other overseas markets?
A: The grant funding will cease either at the end of the 2 year period or when you have completed all of the objectives in your work plan and have claimed the applicable costs for those activities - Whichever is sooner.
Note that only activities that aid you getting into market for the first time (whether this is locally or overseas) are eligible therefore you shouldn't have any post-market entry costs in your work plan.
Q: Can you please provide info about the Full Grant funding rounds? When does the one after the current one open? Or if it’s on the website, just say that. Cheers
A: The next round will open on 12 February 2024. This is noted on the website. When we know further details about future rounds, we will also post these on the website.
Q: Given this is Callaghan's first contestable grant process, is it confirmed that there will be opportunities for full grants next year if applying by the August 24th deadline is not feasible?
A: Yes, the next round will open 12 February 2024.
Q: If there are full grants to be awarded next year, what cadence are these processes to take place? Quarterly?
A: We are still working through how often we can open funding rounds but we can confirm the next funding round will open on 12 February 2024.
Q: How many full grants are intended to eventually be awarded on a yearly basis?
A: A number of factors will influence how many grants are awarded, including timing of funding rounds, value of grants awarded compared to available funding and complexity of assessment. At this stage we are unable to confirm how many grants will be awarded annually.
Seed Grant
Q: With Seed grant funding for FTO can you please confirm whether patentability is a core requirement of the FTO opinion?
A: We are agnostic to the specific content of the FTO - you should engage with your IP advisor on this. We do note that support in this place must be carried out by a registered patent attorney (whether patentability is a consideration or not).
Q: The Seed grant covers provisional patent filing, does this include foreign provisional applications? E.g., an AU provisional provides opportunity for international search report and evidence of novelty. How about a non-provisional but first-filing (e.g., direct PCT or direct complete)? Cheers!
A: Foreign and local provisional applications are eligible under seed. First filings are ineligible for seed but can be covered by full grant if you are successful.
Q: If we apply for the seed grant, can we then apply for the full grant as well? Thanks.
A: The aim of the Seed Grant is to enable you to gather evidence to help you make a Full Grant application.
Q: Will the Seed Grant feedback help you to ensure you have everything you need to be successful for the Full Grant?
A: The aim of the Seed Grant is to enable you to gather evidence to help you make a Full Grant application. It will not necessarily mean you will have everything you need. You will need to make an assessment as to whether you are sufficiently prepared to apply for the Full Grant. Refer to our website to see the questions.
Q: Can you please advise if there is a different application process timeline for the Seed Grant versus the Full Grant?
A: The timeline for both grants is very different. The Seed Grant is open for applications all the time. You may submit any time. Applications are assessed every two weeks in batches. The Full Grant is a longer and more onerous application and assessment process. Refer to the website to view the timeline for Full Grant.
Q: For the Seed Grant, will you have a set period of time to put together your share of the co-funding like with Full Grant?
A: For the Seed Grant, the Application Form asks for an attestation that you can fund your 50% share upfront. You will not need to provide any financial information to support this.
Q: If your company has a couple of new products, can you submit (and be accepted for) applications for a couple of seed grants?
A: Yes. There is no limit to how many applications that one entity can submit. However, they must all be for different innovations, and you cannot claim for duplicate costs across multiple applications.
The Innovation Ecosystem
Q: Is there any special consideration for innovations that will have a particularly strong benefit for Māori in the innovation ecosystem?
A: There is no current Callaghan Innovation grant that provides special consideration to Māori in the innovation ecosystem.
Q: The novel innovation we wish to pursue will become our Intellectual Property. We would consider licencing that IP to other NZ or international companies. Does that fit the criteria of enhancing the NZ innovation landscape?
A: You will need to demonstrate that licensing the IP will enable other innovators to create something new themselves e.g. a new process or product as a direct result of your innovation.
Q: Can you define the innovation ecosystem? Do you mean, how will this create local jobs and exportable IP/products?
A: The innovation ecosystem is the network of people, organisations and resources in Aotearoa New Zealand that together enable innovative ideas to be formed, supported, adopted and spread. One way to think about this is what is something that your project/innovation will do that will make it easier for future innovators like you to be successful. Creation of jobs and more exports are economic benefits and sit outside the definition of ecosystem benefit.
Refer to our website for more information.
Q: In the Innovation Ecosystem diagram, why is ‘Supply/Value Chains’ included in the green band, but not listed in the stack of six areas on the right hand side, as part of the potential ecosystem benefit areas? Is it more important, less important or equally important to the mix? Or something else?
A: The Innovation Ecosystem diagram is not assigning any difference in importance to anything shown. Generally an innovation ecosystem is a network of people, organisations and resources, including other current and future innovators operating within or outside of your supply/value chain. The stacked list shows six types of benefits (in no particular order) that can be created by a novel innovation, anywhere in the innovation ecosystem.
Q: As a start-up (pre-revenue) and novel, I found it difficult to ‘guarantee’/evidence the benefits to the innovation ecosystem, everything in front of me is vision, strategy, determination and a bit of luck. Is it okay to talk about the benefits in a visionary way (with as much proof that I can find - but noting the challenge to evidence, prove, guarantee)? Can you give examples of the type of evidence required for meeting the benefits to ecosystems?
A: Absolutely. Benefits can be hard to predict with absolute certainty - and will not always have irrefutable proof that they will be realised. However, you may have an idea and have some evidence to assume they could be realised.
Applicants can provide their views of why they think those benefits are plausible and/or likely.
Motivated applicants may wish to back their views up with something like a letter from a reputable industry body, endorsing their innovation and the benefits they also believe will be generated for the innovation ecosystem. That option is open for applicants during the application process.
Q: Can you provide an overview of NZ's innovation ecosystem? Do you have a slide that maps this?
A: The elements of the innovation ecosystem which apply to each innovation vary widely depending on the area. Generally an innovation ecosystem is a network of people, organisations and resources, including other current and future innovators, operating within or outside of your supply/value chain. Another way to think about this is what is something that your project/innovation will do that will make it easier for future innovators like you to be successful. To help with framing your response in this space you could start with:
“Other innovators in Aotearoa-NZ will be able to do x,y,z due to our project which they weren't able to do before…”
Refer to the website for more information.
Q: How will you score the benefits to the innovation ecosystem?
A: Refer to the Full Grant Assessment Framework on the website.
Other Questions
Q: You answered a previous question about the meaning of being "in market" with this statement: "You cannot be in the market with the specific innovation at the time of application. Pre-sales and paid pre-market trials are fine to be undertaken and supported with Ārohia funds, however once the innovation is fully in market, your funding would cease".
The first part is quite clear, and makes sense, but can you please clarify the last part of this? For example, if we have a project that is going to take 24 months, and we make some sales during that time, does this mean the rest of the funding stops? This is quite important for us (and I'd imagine other companies to understand) because if you can have a customer pay for even an earlier or MVP version of your product, that is strong validation you are on the right track, but it would put us in a difficult position it meant that the agreed grant funding stopped. You mention "pre-sales" and "paid pre-market trials" - so maybe there is the intention that so revenue could be generated?
A: We recognise that first sales in the form of paid trials and pre-sales are a key part of the launch journey of any new innovation and validating its potential in market, accordingly these would not lead to the cessation of your grant. Generally, pre-market trials take place in a limited way - whether it be limited volume/access, limited user functionality or MVP feature sets this is generally distinct from what we would consider "fully in market" where a product is sold and marketed widely in its final form.
Q: The primary market for our innovation will be North America (not NZ). This means that a large amount of our activity spend will not be in NZ because (obviously) we cannot undertake North American market activity in NZ . Assuming that this non NZ spend fits within the criteria stated on the website - is there a proportion of total overseas spend that we need to stay under to be considered for the grant? eg if our NZ spend was 20% of the total and our overseas spend was 80% of the total, would this rule us out? Alternatively would that result in a lower score for the relevant section?
A: There is no limit on overseas activities however please see page 12 of eligible cost guidance for greater detail. Reference link here: https://www.callaghaninnovation.govt.nz/sites/all/files/Eligible-Activit...
You should address this in section 3.2.4 of your application specifically outlining: Why it's essential to perform those activities overseas, and why performing the activities overseas won't compromise your innovation’s potential to deliver benefits to the Aotearoa New Zealand innovation ecosystem. If you are unable to provide compelling reasoning as to how this would not compromise your innovations potential benefits to the New Zealand Innovation ecosystem it may lower your score against that criteria.
Q: It says that the grant funding will stop after "the first sales of the novel innovation in its key target market". Let's say our "key target market" is Europe/ UK and the US where our target enterprise customers are based, would it jeopardize our funding if we test our innovation with a New Zealand-based paid customer after we have won the grant?
Essentially, my question is whether we are allowed successful sales outside our key target markets (EU and the US) during the grant period, or whether we must not have any sales in any markets at all.
A: The criteria is designed for premarket product launch, if you have a sale in place, the product is in market, regardless of whether this is target market or not.
Q: We sold actual product previously, but just 25 units at very high price. Sales/production is now stopped, main focus is simplification/manufacturing systems to bring to scale markets. Does this disqualify us?
A: You cannot be in the market with the specific innovation at the time of application. Pre-sales and paid pre-market trials are fine to be undertaken and supported with Ārohia funds, however once the innovation is fully in market, your funding would cease. The intent of Ārohia is to support companies seeking to take their innovation to market for the first time, hence we wouldn't continue to fund you through this scheme once you were in market.
Q: I got a Callaghan carousel advert in my feed yesterday, about Ārohia. One of the graphics read “who inspire others to innovate". Is inspiring others a valid and worthwhile benefit to the ecosystem?
A: That could be a valid benefit. However, in assessing this category, our assessors will consider the evidence regarding how your successful project will inspire others to innovate.
Because you are competing against other applicants, your application will only succeed if you can provide strong evidence of the breadth and impact of those benefit, not just that benefits are likely.
It is also worth noting that the Seed Grant exists in part to help customers gather such evidence before making a Full Grant application.
Q: For my company, demonstration is key. Is there a way to demonstrate, for example to the panel, first stage assessors?
A: How you deliver your pitch is entirely up to you. The Panel will receive your application form as well as your live pitch.
If you feel that a demonstration adds value to your pitch to the Panel, your ability to convey your idea or potential benefits, then you're encouraged to do so. Do note that you must be able to do this within the 20 minute allocated time for your pitch.
Also note that the pitch will be virtual, via an online video call. So you will need to ensure that you have the capability to run the demonstration adequately from your end.
However, you will not be able to provide a demonstration to the internal Screening Committee that occurs before the Panel event.
Q: If we make a sale during the application process, it ends in November, does that automatically disqualify us?
A: Yes.
You cannot be in the market with the specific innovation at the time of application. Pre-sales and paid pre-market trials are fine to be undertaken and supported with Ārohia funds, however once the innovation is fully in market, your funding would cease. The intent of Ārohia is to support companies seeking to take their innovation to market for the first time, hence we wouldn't continue to fund you through this scheme once you were in market.
Q: The funnel is pretty narrow if the business can’t be in the R&D phase but also can’t be in market… is that even possible if a business is using MVP principles. It would be good to clarify how tightly this is defined, and examples of businesses that could meet this criteria.
A: Your business can be undertaking R&D activities while receiving Ārohia funding, however Ārohia funding can not be used to fund that R&D. Ārohia can however be spent on the broader innovation and commercialisation activities needed along side that R&D.
Q: Are we able to know who the individuals are who will make up the panel?
A: We will publish the panel list once the members have been selected.
Q: Is the Grant reverse-competitive? If you make the cut, is there a limit to how many projects will be funded by the grant?
A: Your application must cover one innovation. You cannot use the funding for other, different innovations but you may submit additional applications for the different innovations.
Q: To provide insights we must share the results of several years of our work. How do you protect IP? Could you sign Non Disclosure Agreement?
A: We do not sign non disclosure agreements with applicants however our staff, contractors and partners involved in the grants process are all subject to internal privacy and confidentiality policies and contractual obligations to ensure the safety of your IP. Ultimately we may find many applicants are able to submit successful applications for grants without disclosing the exact details of their core, sensitive IP and we recommend that you consider whether it is actually necessary to disclose this to us as part of your application. If your application is successful and we enter into a funding agreement with you, we will also ask your consent before sharing/publishing information, insights or case studies about your grant.
Seed Grant funds can also be used to apply for provisional patents to protect your IP if it is patentable and we offer the program Beyond IP to assist companies to establish an IP strategy. Refer to the website to learn more about Beyond IP.
Q: I heard that this will not be done quarterly in 2023 and the next round will not be until early 2024. So will more than 10 applicants be considered in the initial round?
A: A number of factors will influence how many grants are awarded, including timing of funding rounds, value of grants awarded compared to available funding and complexity of assessment. As this is the first round, a maximum of 10 applicants will be shortlisted.
Q: Will case studies become available for the grants including details about what helped them win the grant?
A: Yes, we will work with successful recipients to develop case studies over time.
Q: Do you have anyone you can recommend to assist with pitch development?
A: While we can't recommend individual providers, we have developed a pitch guidance document. Refer to this here.
Q: We have a product already being tested in the NZ market - as there are more innovations emerging from our product are we still eligible to apply or are we considered as already in the market?
A: Pre-sales and paid pre-market trials are fine to be undertaken and supported with Ārohia funds however once the innovation is fully in market your funding would cease. The intent of Ārohia is to support companies seeking to take their innovation to market for the first time hence we wouldn't continue to fund you through this scheme once you were in market. You could perhaps apply on the basis of the new innovations that are emerging if they are not already in play.
Q: Are there any particular industries that you’re prioritising this year? Or are there any particular industries that you are hesitant to offer funding to?
A: No, there is no industry level targeting to this fund at the present time.
Q: Can you explain funding support for regulations development as an example of benefits to the innovation ecosystem - how is that a responsibility of any industry player rather than Government as the regulator?
A: Regulation development is the responsibility of regulators however in many cases industry, especially those at the bleeding edge, work with regulators to help them understand the scope of the activities that need to be regulated. This takes time and effort on behalf of the innovators, and creates efficiencies and frameworks for others that follow in your path, so is something that could be supported under Ārohia funding.
Q: If we have received a grant from another Public/government entity are we precluded/disadvantaged in applying for either the Seed or the Full Grant?
A: Other government funding cannot be used for the same activities however you may receive other funding to support other elements of getting your innovation to market. If you have other government funding you will need to demonstrate how you will not use this on the same activities applied for under the Ārohia Grant. Essentially you can't 'stack' or 'double dip funding' i.e. you can use Arohia to fund 30% of the costs of Activity A and NZTE funding to fund 30% of the cost of Activity B but you can't combine Arohia and NZTE funding to get 60% of either activity funded.
Q: We have a product already being tested in the NZ market - as there are more innovations emerging from our product are we still eligible to apply or are we considered as already in the market?
A: Pre-sales and paid pre-market trials are fine to be undertaken and supported with Ārohia funds however once the innovation is fully in market your funding would cease. The intent of Ārohia is to support companies seeking to take their innovation to market for the first time hence we wouldn't continue to fund you through this scheme once you were in market. You could perhaps apply on the basis of the new innovations that are emerging if they are not already in play.
Updated: 28 September 2023