FOR YOUR START-UP CEIM, 27 FVRIER 2015 Jo Van Betsbrugge, PhD - - PowerPoint PPT Presentation
DES SOLUTIONS EFFICACES ET RENTABLES POUR VOTRE START-UP INTELLIGENT AND COST-EFFECTIVE SOLUTIONS FOR YOUR START-UP CEIM, 27 FVRIER 2015 Jo Van Betsbrugge, PhD Conseiller en Innovation - Innovation Advisor Jo.vanbetsbrugge@cnrc-nrc.gc.ca
Jo Van Betsbrugge, PhD Conseiller en Innovation - Innovation Advisor Jo.vanbetsbrugge@cnrc-nrc.gc.ca
DES SOLUTIONS EFFICACES ET RENTABLES POUR VOTRE START-UP INTELLIGENT AND COST-EFFECTIVE SOLUTIONS FOR YOUR START-UP
CEIM, 27 FÉVRIER 2015
About NRC Concierge Service Intelligent and Cost-Effective Solutions for Your Start-Up Overview of Funding Programs for Tech Companies
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Launched in December 2013 Offered by NRC – Industrial Research Assistance program Free personalized guidance and advice on government innovation support programs 13 Innovation Advisors across Canada (3 in Qc) 700 client engagements in Quebec since launch
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FEDERAL PROVINCIAL REGIONAL
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Innovative* companies with less than 500 employees (SMEs) Any stage of the company life cycle (start- up, pre-revenue, commercial) Any stage of technology or product development (prototype, testing, validation, manufacturing, < 500 employees) Seeking funding, advice, expertise, facilities etc.
*An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace
The minimum requirement for an innovation is that the product, process, marketing method or
(Oslo Manual definition, 2005)
Helping SMEs grow their business through customized guidance, advice, and referrals to the most relevant programs and services.
Client Contact Centre Innovation Advisors (13 located across Canada) Partner Programs and Resources
(40+ federal and provincial partners)
1-855-53 GUIDE
Concierge Website
Information
http://concierge.portal.gc.ca
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efforts to meet our business objectives and continue to grow through innovation.“ Alain Néron, President Facilis Inc.
http://www.nrc-cnrc.gc.ca/eng/irap/success/2015/facilis.html Slide 8 of 49
Case Studies on How to raise $1M in Non-Dilutive Funding for Your Start-Up.
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$1,000-$50,000 $1,000-$500,000 $50,000-$M $1M+
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Non-dilutive Dilutive
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VC funding
*Small and medium-sized business: 500 employees or less
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Source: Canadian Venture Capital & Private Equity Association Slide 13 of 49
Start-Up Grants/ Competitions Research Grants Debt financing Hiring grants Tax Refunds Clients Crowd funding
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No fundable idea No execution on idea Lack of innovation Services without added value Lack of commitment Lack of determination Marginal niche No business plan Single founder No employment created Running out of cash
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No fundable idea No execution on idea Lack of innovation Services without added value Lack of commitment Lack of determination Marginal niche No business plan Single founder No employment created Running out of cash Fundable idea Prototype built Innovation Prof/sci services Full time employed Execution Sizeable market Business plan Dedicated team Employment creation Revenues Why companies don’t get funding
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Minimal Viable Product (MVP) Clear monetization plan Team : tech + business
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fans
funding programs
Founders demonstrated commitment, determination and executed on their idea
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R&D intensive High risk Requires vast amount of $$ Time-to-market 10+ yrs
VCs come in at Phase II
No funding for early R&D Very few funders in Canada
New funding models have been established in Quebec
generating service providers
Step 1 : Read a few books about your industry, get inspired…. … and learn from past successes and mistakes.
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$216K ? $125K ? $150K ? $50K ? $30K ? $50K ? $150K ? $150K ?
$130K ? (non-dilutive, 24 months)
Steps 2-10
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$216K CLD $125K IQ $150K CSBFP $50K SIJ $30K grants (IRAP, EQ) $50K SR&ED $150K CED $150K equity
Pre- revenue First revenues Working capital Equipment loans R&D Marketing
5 months boot- strapping
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$1M total financing $720,000 public $$ $216K CLD $125K IQ $150K CSBFP $50K SIJ $30K grants (IRAP, EQ) $50K SR&ED $150K CED $150K equity
$130K 1st clients YEAR 1 YEAR 2 (non-dilutive, 24 months)
Initial value created
Pre- revenue First revenues Working capital Equipment loans R&D Marketing
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Banks Gov’t 1st partner
You want to have enough money at each gear to reach the speed required to get into the next one
FFF
equity
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“Bootstrapping a company with non-dilutive funding, i.e. from private foundations or public sources, is a way to create initial value and focus on the minimum viable product. Some also successfully sell their consulting or other activity related services such as clinical trial design to generate cash inflow while establishing at the same time contacts with future customers. Although not conventional for every business, bootstrapping does build great companies!”
Faris Sabeti, Vice President at Commission for Technology Innovation, Switzerland
Ref: “About the Gaps in Early Stage Financing”, by Eugène Schön http://www.ctistartup.ch/en/networks/cti-picks/2012/10/02/about-gaps-early-stage-financing/
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$216 CLD $50K SIJ
YEAR 1
$125K IQ $150K CSBFP
$541,000 $16,000 Young Promoter grant, CLD
CLD
BMO/SIJ BMO/IQ BMO/IC
$525,000 debt
$200K, CLD, unsecured 24 month moratorium $50K, BMO, personal loan Loan guaranteed by SIJ $125K, BMO loan Loan guaranteed by IQ $150K, BMO equipment loan Loan guaranteed by Industry Canada DEBT financing
CLD: Centre local de développement SIJ: Société d’investissement jeunesse IQ: Investissement Québec IC: Industry Canada
YEAR 1
CLD BMO BMO BMO $525,000 debt
$200K, CLD $50K, BMO/SIJ $125K, BMO/IQ $150K, BMO/IC
Advantages of DEBT financing
Non-dilutive Often comes with moratorium on repayment of principal amount Limited personal guarantees (gov’t loans) Pressure from banks to perform keeps you
Relatively inexpensive to obtain, quick decision turnaround from financial institutions Many solutions exist (incl. government) ‘Too often, young entrepreneurs dismiss debt financing as an option to fund their business, thereby missing excellent
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$525,000 in loans in year 1 Reasons why this start-up could borrow $500K in Year1?
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Pre-revenue First revenues First investments
YEAR 1 Maximized every seed $ (bootstrapping), diligent $$ management Create early successes (first products & profit) First products distributed by world-wide distributor (Traction!) Leveraged in-house technical expertise and equipment to offer value-added services to SMEs that were in need of those services Hybrid business model: products and services – a winning combination Key success drivers: A year of intense bootstrapping… that validated the B2B business model
Traction (sales)
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Help with business planning, coaching, mentoring, securing investment
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An additional $30,000 is available through the Futurpreneur/ BDC Loan Program.
mentorship along with the loan.
rating, and business plan
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a business, or to acquire a significant share of a company’s common stock
Motion
services per year
Tactus Scientific, Beeye, LightSpeed,…
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INDUSTRIAL RESEARCH ASSISTANCE PROGRAM (IRAP)
innovation, market potential, and management team YOUTH EMPLOYMENT PROGRAM
BUSINESS INNOVATION ACCESS PROGRAM (BIAP)
funded research organizations and certain not-for-profit
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Canada Revenue Agency & Revenu Québec
SR&ED users (pre-claim service) available
documentation and time tracking
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Financing of Refundable Tax Credits
Up to 75% of total anticipated amount of refundable tax credits Minimum financing of $50,000 for SR&ED and $20,000 for other tax credits
UNIQ Financing
Starting at $50,000 Loan, loan guarantee or quasi-equity financing Up to 100% of project cost Financing of Capital Assets or Working Capital
NEW: Créativité Québec – for innovation projects (IQ/MEIE)
Budget: $150M over 3 years Loans or loan guarantees ($50K to $5M) Projects: technology acquisition, process improvement, product/process development The program favors partnerships between universities, research centers & SMEs Project requires investment from private sources (20% min) of project cost Repayment of capital potentially deferred for 3 yrs
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NATURAL SCIENCES AND ENGINEERING RESEARCH COUNCIL - ENGAGE GRANT
challenge
IUSRA GRANT (Industrial Undergraduate Student Research Award)
for 16 weeks
Minimum eligibility requirements for Start-Ups: 2 years in existence, or 2 FTEs
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MITACS ACCELERATE PROGRAM
student
manufacturing, technical innovation, business processes, IT, social sciences, design, and more MITACS ELEVATION PROGRAM
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Strategy
allocated and ICTC is currently not accepting new
programs please subscribe to the ICTC mailing list http://www.ictc-ctic.ca/?page_id=1699
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BUILD IN CANADA INNOVATION PROGRAM (BCIP)
$500,000)
innovation
innovative goods and services)
Example: Idénergie – Portable water turbine
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PRIORITY AREAS OF BCIP PROGRAM
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IMPROVE BUSINESS PRODUCTIVITY, INNOVATE, MARKET OR EXPORT
– Up to 50% of authorized costs for SMEs – Type: Repayable loan (SMEs)
– Application period: open – Average project size: $250K (marketing), $500K (business productivity)
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BDC START-UP LOAN SMEs in start-up or first 12 months of sales
To qualify for financing, you must: – Demonstrate realistic market and sales potential – Provide a solid business plan – Have experience or expertise in your chosen field – Demonstrate key personal characteristics of a successful entrepreneur – Have a competent management team – Have a reasonable financial investment in the enterprise – Provide personal and credit references
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Canada Small Business Financing Program
federal government and private lenders
improvements)
142,000 businesses supported since 1999 $1 billion in loans each year
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This is a $34 million dollar fund to support digital content and application software (no hardware) that is innovative, leading-edge and interactive. Goal: Support innovation in content, technology and/or business models. Examples of types of projects supported : Interactive content (websites, portals, e-books, interactive web series), games (console, web, mobile), apps, software and enabling technologies. There are 3 phases: Production, Development and Marketing
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recoupable investment. In marketing: recoupable advance.
whichever is less (max: $400K in development and marketing programs). A minimum of 75% of costs must be Canadian.
Read through: http://www.cmf-fmc.ca/documents/files/programs/2014- 15/guidelines/2014-15_exp_guidelines.pdf
international jury of experts, and according to an Evaluation Matrix. It is important to understand the process and requirements well: http://www.cmf- fmc.ca/funding-programs/experimental-stream/
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Jo Van Betsbrugge, PhD Twitter: @jovbetsbr Email:Jo.vanbetsbrugge@cnrc-nrc.gc.ca Phone (514) 283-3040
National Research Council Concierge Service 6100 Royalmount Avenue Montreal H4P 2R2
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