Dear Friends,
Allow me to inquire with you on a matter that is quite significant to me. Perhaps you could offer me some advice.
Since 2006, my wife and I have been running a small German company engaged in subcontracting the development of third-party scientific equipment. Since around 2014, we have been financing and actively participating in one of our own project – the development and establishment of production for an affordable portable MRI machine (www.mr-nib.com). We have already achieved initial results and obtained five issued American patents. Essentially, this equipment will enable the assessment of people’s health in field conditions without requiring additional medical expertise. We hope that our initiative will be of great benefit to impoverished countries with limited access to medical research, as well as to nations in armed conflict where our equipment could potentially save many lives.
We aim to produce the first batch of such devices and are willing to manufacture them at cost, with the intention of providing them to those in need. However, we are seeking a grant to cover the costs of components and production. We are prepared to offer our equipment at a price lower than ultrasound devices, despite the fact that our equipment provides significantly more capabilities.
We (as German for-profit company) have already approached over a hundred grant organizations, primarily American and German, but we have received rejections from all of them, with no explanation as to why.
Could you please advise us on what we might be doing wrong? Is such an initiative not needed by people?
I also suspect that some might have the following thoughts about our initiative:
a. They may consider us profit-driven, assuming that we will make a lot of money from this grant. This is not true. We are genuinely prepared to provide a full report and prove that we will not profit from this initiative.
b. People suggest that we should seek venture capital. Yes, that’s an option, but with venture capital, this equipment will never be inexpensive. After all, who would want to supply Hyperfine.io carts to those in need in Africa or in Ukraine?
So, what are we doing wrong? Is the initiative to create something affordable and of high quality, and thus help someone, simply not in vogue in the modern world?
Please share your thoughts in the comments on this post or kindly advise us on where to turn with this initiative.
Sincerely,
Ilgis
Dear DC, thank you very much for your response!
> Why do you believe this? How many VCs have you talked to about whether they’d be fine with the lower-cost version you want?
I have spoken with approximately a couple of hundred VCs or VC brokers. With many of them, we discussed how to move forward, and such scenarios often emerged. Maybe I haven’t been lucky so far. Then I compared how much time I spent on these conversations and thought about how much useful work could have been done during that time, so I started initiating such conversations less frequently. However, I am, of course, open to reasonable discussions if they arise in the future.
> Have you looked into porting the concept of the public benefit corporation from the US to Germany?
We are in Germany, at least for production.
> Have you asked the grant organizations that you talked to for critical feedback and letting them know you’re fine with whatever they say? They would know more than this forum I’m guessing.
About a hundred grant organizations, including CZI, BMGF, Berkshire, Open Philanthropy, simply declined and, unfortunately, did not respond to my request for the reasons for the rejection. Several small funds told me that they are simply not interested in funding it because they have more interesting projects. When I asked for an example of a more interesting project, unfortunately, I did not receive a response. So, I can provide a list of grant organizations that declined my requests in PM, but I have never received a response as to why they declined. Clearly, we tried to write proposals in various variations, often it was still the very first grant proposal of 1-2 pages.
> Why aren’t you trying to make money selling your MRI in rich countries first, then use profits to subsidize a cheaper version for poorer countries?
Obviously, we do not have FDA approval yet, and we have not perfected everything to start the FDA and similar approvals.
> You could consider selling to the US, German, or Ukraine militaries as likely customers to start.
Of course, I have tried. Maybe I haven’t been lucky so far because I have communicated with 50+ people on this topic, many of them initiated the conversation, but the discussion ended on the 2-3 emails or was sent to some people who did not respond. If you can assist, I would be very grateful.
> My wild guess, based on limited info, at risk of overconfidence, since you asked for what might be the case, is that you have too idealistic a self-image that is preventing you from participating in the normal market processes that would create a positive and self-sustaining financial feedback loop that would allow you to finance sales to poorer countries. I would guess a priori that you should lean into being profit-driven and focus on establishing any demand at all for the product any way you can before offering it at cost or at a loss to poorer countries.
As I mentioned, we are currently funding this project from our own resources, and we are progressing slowly. We are open to any reasonable discussions if they are also commercially beneficial to us. We are also open to conducting research with a full report if we receive a grant.
Heads up: You haven’t actually responded to the comment, so DC may not see this.
I have some experience with writing grants and have a pretty robust acceptance rate, but not in anything as technical as what you’re doing so take this with a grain of salt, but based on your comment here I’d either assume that there are serious issues with your grant proposal documents and communication during the grant process leading the process to breakdown before it began or soon after it did, or that your actual tech isn’t as far along or as promising as they’d like for the amounts you’re requesting. I obviously have no idea if the latter is true, and saying that you have initial results suggests otherwise. For the former I’d suggest getting someone who’s an actual expert in the granting environment you’re working in to take a look at your materials and let you know what they think you can do to develop it. In general, grant writing is a fairly specific and technical craft, especially when dealing with grantors that specialize in medical/technological/”hard science” grants, and grantmakers don’t have a lot of time to investigate grants so it’s not uncommon for promising but not-well written in the language of the field grants to be rejected out of hand.
The same goes for grants that are focused on things that have been tried before and failed. More importantly, grantors have limited funds and will tend to fund things in order of priority, so maybe it really just is that they have more exciting projects to fund—things that are a surer bet, things that have already been tried and tested or are further along the R&D pipeline, things that will generate immediate results, etc., and they likely won’t tell you what those are both for confidentiality and potentially legal reasons and because they don’t prefer to spend their limited time giving detailed explanations and justifications to people they’ve rejected, particularly as related to other projects they’re undertaking.
Another note: A lot of the grants I applied to were either completely unavailable to for-profit companies or very strongly preferred funding non-profit, public or academic institutions—I assume you’re checking for the former, and there may not be much you can do about the latter at this point. You say “They may consider us profit-driven, assuming that we will make a lot of money from this grant. This is not true. We are genuinely prepared to provide a full report and prove that we will not profit from this initiative.”, but there isn’t really much that granting organizations can do if you just don’t, except for maybe recuperate costs + some damages for breach of contract, but that’s a hassle that they don’t want to risk, and some find taking that risk to be against their principles in the first place.
Dear lastmistborn, I am very grateful to you for your attention and the detailed explanation of potential issues. I will certainly inform DC that I have responded to his message.
I have seen, read, and understand that what you are writing is quite common, and I realize that this often happens, especially when funds are unfamiliar with you.
Furthermore, when I worked as a junior professor at the university, I wrote grants, and these grants were typically accepted. At that time, I also submitted and successfully published in journals such as JACS and Nature. Currently, I can file patent applications and receive patents from the USPTO without the need for significant revisions (i.e., on the first attempt). Our company already holds five granted American patents. This suggests that we have reasonable scientific or commercial results and that our team can quickly grasp the rules for submitting any document and successfully adhere to them.
Of course, we attempted to have our grant applications reviewed by third-party consultants. Unfortunately, we cannot afford to do this repeatedly without results, as consultants typically charge around 10% of the grant’s value regardless of whether the application is successful. Due to this, we decided not to use their services, as it is not cost-effective for us.
The essence of our current proposal can be summarized in the following paragraph:
As a German commercial company, we are prepared to manufacture new innovative portable MRI devices (www.mr-nib.com) at cost, which amounts to €15,000 per unit if an order for 200 units is placed or €25,000 per unit if an order for 30 units is placed. We are committed to localizing the devices for the Ukrainian language and providing software updates free of charge for the next 8 years. We aim to deploy these portable MRI devices in conflict zones in Ukraine to save the lives of civilians and soldiers through early diagnosis. Why Ukraine? Partly because we have many relatives and acquaintances there, and we want to offer our assistance. Last year, we privately assisted by supplying uninterruptible power systems, and we would like to help in any way we can now.
We are also open to initiating any other similar humanitarian missions on our own.
We have reached out with this initiative to numerous Ukrainian politicians, including Mykhailo Fedorov, Rustem Umerov, and Volodymyr Klitschko. We have also contacted several politicians in the German Bundestag and approached several American military companies and organizations. Additionally, as mentioned earlier, we have submitted numerous grant applications for similar initiatives to various foundations, customizing each application to align with their objectives.
Unfortunately, discussions either reached a dead end or we received rejections. What was most unpleasant and unexpected for us is that we have never received a justified explanation for why our initiative was not supported.
As an ordinary person, I was genuinely surprised that, for example, a stored guided missile sent to Ukraine costs many times more than what we are requesting for our equipment. Even if that missile doesn’t perform as expected, it is often attributed to the incompetence of Ukrainian military personnel. Meanwhile, our initiative for rapid injury diagnosis has failed to garner even the slightest response from anyone.
Why do you believe this? How many VCs have you talked to about whether they’d be fine with the lower-cost version you want?
Have you looked into porting the concept of the public benefit corporation from the US to Germany?
Have you asked the grant organizations that you talked to for critical feedback and letting them know you’re fine with whatever they say? They would know more than this forum I’m guessing.
Why aren’t you trying to make money selling your MRI in rich countries first, then use profits to subsidize a cheaper version for poorer countries? If your product actually works and is good then I don’t see why it wouldn’t be a good product for everyone. You could consider selling to the US, German, or Ukraine militaries as likely customers to start.
My wild guess, based on limited info, at risk of overconfidence, since you asked for what might be the case, is that you have too idealistic a self-image that is preventing you from participating in the normal market processes that would create a positive and self-sustaining financial feedback loop that would allow you to finance sales to poorer countries. I would guess a priori that you should lean into being profit-driven and focus on establishing any demand at all for the product any way you can before offering it at cost or at a loss to poorer countries.
Do let me know if I am wrong in any way, don’t hesitate to correct me!
Dear DC, I mistakenly posted my responses to your questions directly under my initial topic, rather than under your response.