Scout Climate

Making Grant Funding Assessable

One of the first spaces I looked at when I joined the Forum Venture Studio was the potential of LLMs to assist in workflows with complex writing tasks. This thesis work eventually turned into Scout Climate which combines AI and world-class grant writers to help socially responsible companies identify, write, and win SBIR grant funding. In August 2024 Scout closed it's pre-seed round led by Lorimer Ventures. Here's how it went down:

The Genesis
The journey began with deep research into applying LLMs to manual, time-consuming writing processes. I explored multiple sectors like RFPs, contract work, patents and grants to identify where the biggest impact could be made. We had seen large funding rounds from companies like Jasper, highlighting the massive time savings AI-driven tools could deliver for complex writing tasks. This success indicated that focusing on verticalized use cases could unlock venture-backed outcomes for companies tackling niche, high-value writing challenges. 

Contract work initially seemed promising, with a clear problem to solve and the potential to save lawyers charging $500/hour a significant amount of time. But after diving deeper, I realized these markets are dominated by incumbents like Harvey AI and Spellbook, with strong go-to-market advantages - competing one-on-one in these spaces didn’t make sense.

The same was true for RFPs, where players like Loopio could easily incorporate AI into their writing workflows. These incumbents had larger product feature sets, established customer bases, and strong brand reputations, making them tough to displace.

Patents had potential, there was no dominant workflow tool in the space and the value of speeding up patent creation was clear. A worldwide patent costs $60K on average and can take years to obtain. However there was a limited market with only 35K patent attorneys in the US. In my market analysis selling to patent attorneys alone wasn't a venture-scalable opportunity. Not to mention attorneys have high customer expectations and are notoriously hard to sell to. When I began conversations with IP teams at enterprises and expanding beyond patent attorneys There were grave concerns over privacy and most teams weren’t interested in adopting new tech.

Then I found Grants
Unlike other markets, there was no well-established workflow tool in the grant industry. The industry operated in Google docs, spreadsheets and project management software. Most of the industry ran on expensive consultants using manual processes for finding, writing, and managing grant applications. This immediately felt like a real opportunity.

The desk research made sense so it was time to talk to some customers! The response was immediate and resounding. I sent 100 messages which led to 15 calls. Founders wanted to apply for more grants, but the process was time-consuming and complicated. The lack of tools to help write grants made it hard for founders to justify the time investment when there was no guarantee of funding. The demand was clear.

Focusing Scout on Climate Grants
With that validation, it made sense to go deeper. Grants are a massive market in the US alone total grant funding $146B in 2023 so I knew we couldn't target the entire market initially. A few months before I started my research the Inflation Reduction Act had been passed and the amount of funding flooding into climate was in the billions, for this reason, we decided to target climate grants. Climate also made sense as we could expand deeper into climate funding opportunities like tax and carbon credits or we could expand deeper into other areas that have a lot of grant funding like health or defence.

Once the focus was clear, we started our search for the right founder. I interviewed 8 different candidates and eventually selected Tim Barnes, a 3x founder, a former VP of Engineering/Product at Instacart, Arcadia and Inspire and he had a deep passion for solving problems in climate. Tim was the perfect fit.

Building the Product and Targeting SBIR Grants
From there, we dove into understanding the entire grant lifecycle. We analyzed every step of the process - finding grants, writing applications, and managing post-award obligations. While grant identification (finding the right grant for your company) was a problem, founders didn’t see huge value in paying for just that - most founders were willing to pay $50/month. The real bottleneck was the actual writing process. Grant writing is tough, and requires expertise, and success depends on knowing countless tips and tricks to make an application stand out. Coming in second for a grant is the same as coming in last so founders were willing to spend more on creating an amazing grant. It became clear that writing was where Scout could add the most value.

We decided to focus on SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) grants, which awards $4.5 billion annually. With the funding recently renewed for at least the next three years, it provided a stable opportunity. Most founders we spoke with had either applied for or were considering SBIR grants, making it an ideal starting point.

Bringing in the Right Expertise
At this stage, we needed a grant expert to refine the product workflow. After interviewing several firms, one candidate stood out - Stacy Chin. A former founder with a PhD, Stacy immediately understood our vision. She joined as a design partner, shaping the product to meet real-world needs, and later came on board as a co-founder. Her impact was immediate - she brought in revenue, provided grant-writing services, and helped scale our operations.

Go-to-Market and Early Wins
With Stacy on board, we leveraged Stacy’s existing grant writing agency, to find out first beta companies. Within 2 months of Stacy coming on board, we scaled revenue to over $100K and this was feeling like a rocket ship.

Our early success helped attract attention from investors, and Lorimer Ventures ended up leading our pre-seed round.