Igniting Your Startup: How to Secure the Right Fuel Funding
Wondering what stage you are in your startup journey and how much Fuel funding you need? Let’s break it down! Understanding your company’s stage and the maturity of your goals is crucial.
Imagine you’ve created a roommate matching app that’s already got users – awesome! But now, you want to pivot and test this tech with pet adoption. Even though you have a functioning app, diving into a new market means you’re back in the “invention” stage. You’ll need to conduct customer discovery to understand this new audience.
So, how do you figure out your stage and the funding you need? See the chart below to determine where you are in the process.
FUNDING STAGES
CONCEPT DEVELOPMENT
STAGE 1: THE IDEA
A venture at the conceptual stage with a fully formed idea and a clear problem it intends to address for the common good. Funding is aimed at helping to evolve this idea into an invention.
APPROPRIATE FUNDING REQUEST: < $1000
STAGE 2: INVENTION
A venture with a working proof-of-concept that demonstrates the core functionality of the idea. Funding may be used for customer discovery to refine the concept and its market fit.
APPROPRIATE FUNDING REQUEST: < $5000
MARKET VALIDATION
STAGE 3: INNOVATION
A venture that has identified market applications for its proven concept and has begun drafting a business model canvas. Funding supports the creation of an MVP and further market validation.
APPROPRIATE FUNDING REQUEST: $5000 – $25,000
SCALE YOUR BUSINESS
STAGE 4: ENTREPRENEURSHIP
A venture with specific plans for growth, already engaging with potential customers. Funding is sought for customer development activities and to solidify market entry strategies.
APPROPRIATE FUNDING REQUEST: $7500 – $25,000
FUEL FAQ
who can apply for fuel
To apply for Fuel, you must be a current University of Michigan Ann Arbor student with a significant role in the startup—such as a co-founder, officer, leader, or someone working full-time on the venture. Since Fuel funding is exclusive to students, you must still be enrolled when the funding is awarded.
When Can I APPLY FOR FUEL
Fuel applications are generally due on the first Thursday of each month. The program runs for six months during the eight-month academic year. The exact dates for 2024-2025 are provided here.
how can i protect my INTELLECTUAL property
Students should avoid including sensitive intellectual property in their application or presentation. This means not sharing technical details like materials processing, programming code, active contract negotiations, or any trade secrets. Only include information you’re comfortable sharing publicly.
Submitted materials will be shared with U-M staff and a select group of external professionals for assessment. If you have concerns or questions about intellectual property, contact Alison Smith at alisone@umich.edu before applying.
What funding can I request based on my venture’s stage
When applying for Fuel funding, you’ll need to classify your venture’s stage. Assess both your current stage and the maturity of your goal with Fuel’s support. For example, if you have a working iPhone app and plan to test it for a new market, you’re likely at the ‘invention’ stage, as this involves customer discovery.
Please take the time to read these Stage of Venture examples and explanations.
What expenses does Fuel support
Fuel provides financial awards to support the growth of University of Michigan student ventures, helping teams reach their next milestone within a 12-week period. Funds can be used for:
- Prototype Development: Costs for developing a prototype or MVP.
- Equipment Purchase: Essential tools, materials, or software.
- Customer Discovery: Travel and conference fees for meeting potential customers.
- Professional Subscriptions: Services or tools needed for venture advancement.
Funding will generally not cover:
- Legal Services: IP protection or incorporation, unless crucial for the milestone.
- Interns or External Coders: Direct payments to these individuals will be scrutinized.
- General Professional Services: Services not directly tied to the immediate milestone.
Fuel Application Review Criteria and Rubric
A rubric ensures clarity in evaluating Fuel applications for both applicants and judges. While all applications are assessed using uniform categories, their importance varies by venture stage. For example, ‘Potential for Positive Impact’ and ‘Novel Technology’ are prioritized at the Idea stage, whereas ‘Action Plan and Progressive Development’ is key at the Entrepreneurship stage. Applicants should carefully review the rubric to understand the assessment criteria.
Please review the rubric document along with the corresponding 1-5 rating scale.
How to qualify for in-person presentations
Judges will use a rubric to determine which teams meet the established criteria to advance to the next stage in Fuel. Teams are evaluated individually against the rubric, not compared to one another. If the majority of judges agree that a team should advance and present during the third week of the month, the team will receive an invitation.
HOW JUDGES DETERMINE FUNDING AWARDS
Judges will use the same rubric to evaluate which teams meet the funding criteria. Teams are assessed individually against a set cut-off point. After presentations, judges may ask follow-up questions and discuss the appropriate funding amount. If the majority agrees a team deserves funding, a notification will be sent to that team.
how is funding awarded
Fuel awards are allocated to a student team member with sufficient space in their U-M financial account. Recipients must consider potential tax implications. Note that CFE cannot award funds directly to a student’s company. Alternatively, CFE can directly purchase equipment or resources for the winning team.
who is my fuel contact
Please contact Alison Smith with your questions: alisone@umich.edu