Ārohia Full Grant: Q&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.

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.

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).

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.

Registered design costs are eligible under Full Grant but not under Seed Grant.

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.

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.

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.

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.

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.

Yes provided they are paid by the business. Check out the eligible costs in our guide.

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. 

Refer to the eligible activities guidance for detailed information on what costs are eligible.

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.

Yes. Refer to the eligible activities guidance on page 9 for more information.

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.

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.

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.

Overheads can be charged at 20% of internal labour costs. Refer to the eligible activities guidance for more information.

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.

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.

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.

Yes - the New to R&D can cover your R&D and Ārohia can cover how you will deliver benefits to the innovation ecosystem.

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.

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.

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.

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.

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.

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.

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.

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.

No. With the exception of equity investment you cannot use other government funding to co-fund this grant.

No. You must be able to demonstrate that you can cover your 70% of costs. In kind contributions cannot be included as costs.

No. With the exception of equity investment you cannot use other government funding to co-fund this grant.

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.

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.

Yes that is acceptable.

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.

 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.

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 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.

If that investment contributes to the cash on your balance sheet, then yes, however investment in kind will not count.

No - costs are only eligible from the start date of the grant.

The funding model we have to manage on behalf of the government dictates this way of operationalising the funds.

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.

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.

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).

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.

The Full Grant co-funding is rebated (claimed in arrears with proof of expenditure).

Yes, you may apply twice for the same innovation if you are unsuccessful the first time.

The next round opens in early 2024. Please refer to our website.

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.

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.

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.

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.

The next round will open in early 2024. This is noted on the website. When we know further details about future rounds, we will also post these on the website.

Yes, the next round will open in early 2024.

We are still working through how often we can open funding rounds but we can confirm the next funding round will open in early 2024.

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.

There is no current Callaghan Innovation grant that provides special consideration to Māori in the innovation ecosystem.

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.

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.

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.

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.

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.

Refer to the Full Grant Assessment Framework on the website.