What was broken
An early-stage deep-tech team building indigenous, mission-critical electronics needed non-dilutive capital to certify and validate a flagship product.
What we did
CapEasy built the grant proposal — grant-head mapping across prototyping, certification, validation and IP, and a milestone plan tied to the scheme’s tranche gates. We prepared the revenue trajectory and compliance framing the committee expects for a deep-tech applicant.
Where it landed
Approved for a seed 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.
Two different pots of money, two different record sets
A hardware startup in Australia is usually chasing two separate mechanisms that get confused for one: the R&D Tax Incentive (R&DTI), which is a self-assessed tax offset claimed through your company tax return, and a competitive manufacturing or defence grant, which is assessed and approved by a committee before the money moves. business.gov.au runs both programs but treats them very differently — the R&DTI rewards R&D expenditure you already incurred, while a grant like the Industry Growth Program or the Defence Industry Development Grants Program is awarded against a proposed project plan, the way the committee in this engagement assessed a milestone plan before approving anything.
Under the R&DTI, an eligible entity with aggregated turnover under $20 million gets a refundable tax offset equal to its corporate tax rate plus an 18.5% premium, claimed via registration with the department within 10 months of the end of the income year the activities occurred in, then entered on the company tax return (business.gov.au, "Overview of the R&D Tax Incentive"). Above $20 million turnover, the offset is non-refundable and steps down further above 2% notional R&D intensity (ATO, "Rates of R&D tax incentive offset") — check ato.gov.au for the rate and threshold in force for the year you are claiming.
Prototyping and certification spend is a grant-head map, not a general ledger
The proposal in this engagement worked because it mapped spend to specific heads — prototyping, certification, validation, IP — instead of handing the committee an undifferentiated expense list. The same discipline applies directly to an R&DTI claim and to the Defence Industry Development Grants Program's Sovereign Industrial Priorities stream, which funds SMEs purchasing manufacturing plant and equipment used directly to deliver programs aligned to Australia's sovereign defence capability priorities — grants cover up to 50% of eligible expenditure, capped at $1,000,000, and the current application round closes 31 August 2026 (business.gov.au, "Defence Industry Development Grants Program").
For an R&DTI claim, the ATO expects records that separate "core" and "supporting" R&D activities and tie each dollar of notional deduction to an activity and a date — prototype build costs, certification test runs, and the engineering time behind each are the categories that survive review, provided they were kept "before, during and after each activity" rather than reconstructed from bank statements afterward (business.gov.au, "Overview of the R&D Tax Incentive").
The Industry Growth Program is the closest AU analogue to a SISFS-style milestone gate
The Industry Growth Program funds SMEs under $20 million turnover (three-year average) building manufacturing capability in one of the National Reconstruction Fund priority areas, which explicitly includes defence capability alongside resources, transport, medical science and enabling capabilities (business.gov.au, "Industry Growth Program"). Its Early-Stage Commercialisation stream ($50,000–$250,000) funds feasibility studies, proof-of-concept and prototyping — the same project stage the grant in this engagement was approved for — while Commercialisation and Growth ($100,000–$5,000,000) funds market-ready scaling. Both are assessed on a written project plan against the priority areas, not on turnover history, which is why the plan itself — the milestones, the grant-head breakdown, the revenue trajectory — is the deliverable a committee actually reads. Check business.gov.au before you build a plan around it: the program's intake status changes, and it has previously paused to new applications.
What we prepare for a claim like this is the same file discipline as the earlier engagement: prototyping and certification costs coded against project stages, a milestone schedule that matches whatever tranche or reporting structure the program sets, and the underlying ledger reconciled so the numbers in the application match the numbers a reviewer can later trace. The R&DTI registration, the grant application itself, and the eligibility call belong to the program and to your registered tax agent — everything is prepared for your registered BAS or tax agent to lodge.
What to take from it
- An R&DTI claim and a competitive manufacturing grant are assessed differently — one is self-assessed against expenditure already incurred, the other is awarded against a proposed milestone plan.
- Under $20 million aggregated turnover, the R&DTI refundable offset is your corporate tax rate plus an 18.5% premium — verify the current rate on ato.gov.au before you claim, not from a prior year's figure.
- Grant-head mapping — prototyping, certification, validation, IP tracked separately — is what lets a committee check your numbers line by line instead of taking your word for it.
- The Defence Industry Development Grants Program's Sovereign Industrial Priorities stream covers up to 50% of eligible manufacturing-equipment spend, capped at $1,000,000; check business.gov.au for the current round's open date before assuming last year's deadline still applies.
- Records kept during the work — not reconstructed afterward — are what both an R&DTI review and a grant milestone report expect; the discipline of a live grant-head map is the transferable habit.