As startups mature from R&D to building and launching their products, CEOs will witness an acceleration in their cash burn. Ventures could find themselves at a critical point, where they require more capital inflows. At this stage, the only funding sources available are friends and family, angel investors and a handful of pre-seed-stage VCs.
Another financing option for startups is non-dilutive financing—a combination of government grants and short-term loans. Government funding provides the advantage of low-cost non-dilutive capital. With the minimum dilution, government grants help companies de-risk products, prove market traction and accelerate expansion, which can result in a higher company valuation. This puts CEOs in a better position to assess other sources of funding, such as venture debt, venture capital and commercial loans, that are available for later-stage companies.
It is important to also acknowledge that the time cost associated with grant applications can be significant. Most fast-growing startups cannot wait for the lengthy approval process and reporting time required to get the cash funding. To mitigate the time-delay problems of using grants, CEOs can consider leveraging tax credits and grant financing (short-term loans) to bridge the turnaround time between submission, approval and receipt of funds from the government. This solution can inject much-needed cash liquidity into the company and enable startups to deliver on projects in a timely manner.
Use the interactive infographic below to discover the best funding source for your company. There are more than 2,500 programs available at different times of the year for companies in various industries and stages.
Explore the appendices and reach out to agencies and funding advisors in your local Ontario Regional Innovation Centre (RIC) to identify your non-dilutive funding strategy. Please refer to the agencies’ websites for detailed funding eligibility and restrictions.
Use the Solution Readiness Level (SRL) or the development stage of your company to find the funding available to you. By hovering your cursor over each development stage, you will be able to view the grants eligible during that phase.
|GST, HST, PST: GST/HST credit||Canada Revenue Agency||All|
|SR&ED: Scientific Research and Experimental Development tax credit||Canada Revenue Agency||All|
|Hiring grants||Various agencies||All|
|I2I: Idea to Innovation||Natural Sciences and Engineering Research Council of Canada||All|
|NRC-IRAP: National Research Council Industrial Research Assistance Program||National Research Council||All|
|SDTC Seed Fund: Sustainability Development Technology Canada Seed Fund||Innovation, Science, and Economic Development Canada (ISED)||Sustainability|
|SDTC Cleantech Fund: Sustainability Development Technology Canada Cleantech Fund||ISED||Cleantech|
|ISC: Innovative Solution Canada||ISED||All|
|CIIP: Canadian International Innovation Program||ISED||All|
|SIF: Strategic Innovation Fund||ISED||All|
· Next Generation Manufacturing Canada Advance Manufacturing Supercluster
· ScaleAI Supercluster (QC)
· Ocean Supercluster (Atlantic)
|L2M: Lab2Market||Mitacs Accelerate Program||Academia|
|IDEaS: Innovation for Defence Excellence and Security||Government of Canada and Canada’s cable, satellite and Internet protocol TV distributors||Defence application|
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