Getting R&D Funding for your Startup in Québec!

Getting R&D Funding for your business

Cedrin Law

Matthew Starek

Who we are

Cedrin Law

Consultant

Matthew Starek

Consultant

• Extensive training and experience in Science and Business• Experience with successful funding applications (CIHR,

NSERC, Mitacs) for research and for start-up capital (fondation du maire, CYBF, Jeune Promoteur)

Alain Readman Valiquette

President

Innovation and Entrepreneurship

Lesson from Japan in the 1990’s

• Spend and # of people in R&D for SMEs increased significantly

Total Factor ProductivityIndicator of advances in tech and labour/capital improvements

R&D + Small Business = significant contributions to economy

Funding for SMEs

Loans, Grants, Equity,

Govt

Private

Specific R&D funding options available

Be passionate, patient and persistent

As with any funding, success requires effort, finding the right sources, and dealing with failure

Challenges

• Red tape

• Lack of transparency of funding criteria

• Being rejected

• Putting together an effective application

• The funding source with the right fit for you

All of these can be overcome with effort and the right resources/support!!!

Funds are out there, reach for them!

A search in the http://thefundingportal.com for:

• R&D funding in QC in IT and health sectors

• For a start-up with <5 employees

• Seeking <$100k

Yielded >100 programs and >$134M in funding!

Sources of External Funding

• Private Equity

• Loans

• Tax Credits

• Grants

What are the differences? Where can you get them?

Private Equity

Several Types:

1)Angel Investors / Friends & Family

2)Venture Capital

3)Private Equity Firms

Company X

Private Equity Investor

$

Company X

Private Equity Investor

$$$$

Private Equity - Example

Canada’s largest seed venture fund

Average Investment of $185,000

Provide resources and guidance

Loans

Several Sources:

1)Financial Institutions

2)Funding Agencies

3)Governmental Organizations

Company X

Lender

$

Company X

Lender

$$

Loans - Example

Canadian Media Fund:

a government and industry funded not-for-profit

Will fund innovative media projects by repayable advances

Tax Credits

Federal and Provincial

Cash refunds for R&D activities meeting specific criteria

Company X

Gov’t

$$$

Company X

R&D

$

Tax Credits - Example

IQ can provide liquidity for R&D activities

Up to 75% of the expected tax credit for the year

Grants

Several Sources:

1)Governmental Agencies

2)Government

3)Not-for-profit organizations

Company X

Granting Institution

$

Company X

Grants - Examples

Mitacs

NRC-IRAP

NSERC ENGAGE

NSERC I2I

Crowdfunding*

Who: academic researchers (salaries for grad students + postdocs)

How Much: Accelerate: $15k ($7.5k from Mitacs, $7.5k from partner org)Elevate: $57.5k ($25k from Mitacs, $32.5k from partner org)

How: Accelerate: 4-month project accepted anytimeElevate: Apply during Spring or Fall, two-year fellowshipContact Mitacs Business Development rep (https://www.mitacs.ca/accelerate/contact-us)

What: R&D activities that could benefit from graduate student research under faculty supervision, * requires investment from the company

Who: incorporated, profit-seeking SMEs

How Much: $500,000 max, 80% of salaries, 50% of consulting fees ($50,000 max for ARP)

How: consultations with Industrial Technology Advisors

What: innovative, technology-driven new or improved

products, services, or processes in Canada

Engage

Who: incorporated, profit-seeking SMEs (min 1yr old) and academic researchers

How Much: max of $25,000 for up to 6 months

How: applications through NSERC website

What: collaborative R&D projects in sciences or engineering

I2I

Who: academic researchers

How Much: market assessment; $15,000. Phase I; max of $125,000 for up to 12 months

How: quarterly applications (July 7, Sept 29)

What: market assessment and research for technologies that could be commercialized

Crowdfunding

Tell your story, share your idea, collect funds

Who: start-up SMEs in Montreal, Canadians or permanent residents

How Much: $5,000 - $30,000; up to 25% of start-up costs

How: Fall and spring (Sept), online application with business plan

What: business start-up costs (not for R&D specifically)

How to go about funding

• http://thefundportal.com

• http://fundica.com

Identify the right funding types/programs

• Know where to get requirements/instructions

• Seek assistance/feedback from available resources (i.e. D3, Consultants, Peers etc…)

• Contact representatives at the programs directly for info

Apply

Things to keep in mind

Know the eligibility criteria and

requirements

Put in the time and effort to prepare in

advance

Be ready to clearly explain why

research is needed

Know when to get help

Get others to read it and get critical

feedback

Resources

• http://www.thefundingportal.com/

• http://www.nsercpartnerships.ca/FundingPrograms-ProgrammeDeSubventions/index-eng.asp

• http://www.nrc-cnrc.gc.ca/eng/irap/index.html

• http://www.fundica.com/

• http://www.investquebec.com/quebec/fr/produits-financiers/tous-nos-produits/financement-des-credits-impot-remboursables.html

• http://www.crowdfunding.com/

• https://www.mitacs.ca/

THANK YOU

Alain Readman ValiquettePresidentalain@ironoak.co

Matthew StarekConsultant and Partnermatthew@ironoak.co

Cedrin LawConsultant and Partnercedrin@ironoak.co