What was broken
An aerospace-and-defence startup sought seed-fund backing to take a validated prototype toward a procurement-ready stage.
What we did
CapEasy prepared the seed-fund proposal — eligibility against the scheme, a grant-permitted budget covering prototype and engineering work and R&D talent with no marketing or commercialisation spend, and a staged milestone plan. The projections were modelled and the application structured to the scheme’s compliance requirements.
Where it landed
Approved for a seed-fund grant through an incubator-backed program; disbursement is milestone-linked. A Seed Fund approval is the incubator committee’s sanction — actual disbursement follows the scheme’s due-diligence and compliance milestones and is not guaranteed.
The Defence Industry Development Grants Program reads your books before it reads your pitch
The Defence Industry Development Grants Program (DIDGP) funds Australian SMEs against four streams: Sovereign Industrial Priorities (manufacturing plant and equipment aligned to the Sovereign Defence Industrial Priorities set out in the Defence Industry Development Strategy), Skilling, Exports, and Security — each with its own cap and its own closing date on business.gov.au’s grants finder. Every stream pays up to 50% of eligible expenditure as a matching grant, which means the other half has to show up in your own accounts, not just your application.
The paperwork a committee actually opens is a stream-specific project budget template, an accountant’s declaration on the financial details, and documentation demonstrating the expenditure is eligible — not a narrative about the technology. The scoring threshold is public: a minimum 65% against the assessment criteria, and a chunk of that criteria is whether the budget and the accountant declaration hold together with the rest of the application.
ASCA does not run a standing grant round — it runs missions
The Advanced Strategic Capabilities Accelerator replaced the Defence Innovation Hub and the Next Generation Technologies Fund, absorbing both into a single Defence function focused on advanced-technology capability. ASCA organises its work around missions — problem statements set by Defence priorities — backed by $3.4 billion over the decade.
For a startup, that changes what "application-ready" means: there is no generic form to have on file. What matters is being able to respond fast when a mission opens — a costed project plan, R&D expenditure already tracked against activities, and a set of accounts that can produce a milestone-linked budget on short notice, the same discipline this engagement’s staged milestone plan demonstrated for its own scheme.
The R&D Tax Incentive is the standing claim underneath any grant year
Separate from any single grant, the R&D Tax Incentive (R&DTI) is the ongoing offset most aerospace and defence R&D spend in Australia should be tracked against. Under $20 million aggregated turnover, the offset is refundable at your corporate tax rate plus an 18.5% premium; at or above that turnover, it is a non-refundable offset at the corporate tax rate plus a two-tier premium — 8.5% on R&D expenditure up to 2% of total expenditure, 16.5% above that. Registration with the Department of Industry, Science and Resources is due within 10 months of the end of the income year, and the R&D Tax Incentive schedule is lodged with the company tax return through the ATO.
Both the R&DTI registration and a DIDGP application ask for the same underlying artefact from different angles: R&D expenditure allocated to specific activities, kept as records made before, during and after the work — not reconstructed from bank statements when the department asks. Project-level accounting during the year is what makes both claims defensible on review, and it is the same file, prepared once, that a registered tax agent or BAS agent needs to lodge either one.
What to take from it
- A matching grant like DIDGP pays up to 50% of eligible expenditure — the other half has to be visible in your own accounts, not asserted in the pitch.
- ASCA funds missions, not a standing grant round; being ready means R&D spend already tracked by activity, not a form filled out when a mission opens.
- The R&DTI offset splits on a $20 million turnover line — refundable above your corporate rate below it, tiered non-refundable above it — and both paths need the same activity-level expenditure record.
- A grant-permitted budget excludes what the scheme will not fund — this engagement kept marketing and commercialisation spend out of the ask entirely, which is the same test an Australian committee applies to a Sovereign Industrial Priorities budget.
- Approval is not disbursement: milestone-linked funding pays out against evidence delivered at each stage, in this market or another.