Why I left my startup after raising a Govt. grant

Almost 2 years ago I happened to visit a lecture by an Arm Amputee from France. His lecture was inspiring as he had developed an arduino based prosthetic with the help of 3D printing. That led me to think ; can this be made commercial ? Is there a market open for electronic prosthesis inspite of having giants operating in that area.

That led to two conclusions :

1. The Prosthetic had to be cheap so as to operate in an area the Giants overlook
2. The Prosthetic had to be non-invasive so as to bypass clinical trials which cost a lot of money ( and time )

Late that year in August 2015, I raised a Proof-Of-Concept fund from Venture Center, Pune to help with initial POC. By December we had a POC, and by "we" I meant myself as there was no money to hire someone else or for that matter pay for my own salary.

With the POC in place we had to proceed towards making a company, hire people and continue work on the Prototype. The tech was very high end as it involved sensing very weak bioelectric signals from the skin surface ( Electromyograph ) putting it through a Machine Learning Algorithm to understand what teh user is trying to do and finally teh easy part , actuating motors.

By Feb, I had found a Co-Founder but he couldn't work without a salary so I negotiated with our incubator to divert some of the POC money towards paying his salary. We also hired a few interns and work progressed fast. We also started applying for a Govt. Grant in Biotechnology as advised by our incubator. But with all the activity money was in short supply.

So I started looking for potential investors who might be willing to fund this at Prototype phase. I got three kinds of responses :

1. "Are you making money ? / Do you have traction ?" The answer was a clear no. I was rather surprised being asked this question as I had clearly mentioned we were in the prototype phase. The response from their end was a clear no.
2. "Looks interesting! Keep us updated" This was also a way of saying no without burning bridges. I tried to impress upon the fact that there would be no updates /progress without getting some funds but that fell on deaf ears.
3. " We will invest if someone else takes the lead" This was the response from fence sitters who wanted someone else to take the risk so that they can cash in on the opportunity. Since no one wanted in this group wanted to take the lead the talks fell through after going back and forth for about 4 months.

We were broke , had a newly formed penniless company , was waiting to hear from the Govt. Agency about the grant and work almost came to a halt. We pitched a EEG sensor module to our incubator which could be made easily from the tech we were working on and was a high value product. Our incubator gave us another grant to work on this hoping that the Govt. grant will cover the rest.

The funny thing about grants is although they are "free money" , technically it comes with a load of strings. Some grants come in the form of reimbursements and if you are not taking salary for over a year the question as how you would cough up the money yourself is unanswered. Some grants have very strict cost heads , which means that if you did not foresee an expense you cannot get it. And as with very early stage startups lot of things are unforeseen.

We finally got the confirmation for the Govt. grant and had to do almost a month of paperwork and then sit tight with teh hope that money was coming very soon. I had given up hopes about getting investments from a commercial investor so was trying to get our incubator ( which has a substantial in house fund ) to invest in us.

Months went by without any news of the grant getting approved or any new investor showing interest. My personal life was in shambles as I didn't have money to pay for next months rent, and no funds in sight.

Finally I started what a person without any external help can do ; retrospect. Had I taken a right decision to jump into this project with an social impact ? Having spoken to lots of orthopedics the product demand was certain but then why was the ecosystem help us achieve our goals ? Was I in the wrong place at the wrong time ? Was I unskilled in raising money?

After lots of thought I finally called it quits. I informed the incubator and my co-founder about my decision. My co-founder wanted to try out with the govt. grant hence I transferred control of my shares to him and said Goodbyes.

Having been through the experience it is now quite clear to me that you need a certain amount of glamour in India in the startup ecosystem. Every investor is chasing something shiny , they do not care for the ecosystem at all. In the world of unicorns it is really hard to see any other animal, I agree. I think having understood the ecosystem finally I would not dare to startup again and would probably keep my head down and go back to a day job which at-least would feed me properly.