what are the benefits of a partner requesting funds on my behalf?

I am in conversations with a startup interested in my project. I have not set up the company yet, thus we both wish to collaborate, and apply for public funds to develop my prototype/MVP. The idea is somehow to use the startup representation to apply for the funds, develop it and finally transfer the results to my future company. Is it reasonable to think that a win-win approach is: They get paid by the grant, and I get my prototype? Or should I think to offer them more, ie. royalties, equity,..?. Any advices would be appreciated. Thank you