Recently I attended a FedDev Cambridge event with Gary Goodyear, The Minister of State for Science and Technology presenting, and the Southern Ontario Advantage Programs were discussed. We, as business owners, were able to get a glimpse into the initiatives and how FedDev and The Economic Action Plan are creating programs to encourage growth and provide expansion financing options.
Investing in Business Innovation Highlights
- Amount: Repayable loan up to $1M with 33% contribution from federal government based on a term sheet from an Angel or Venture Capital investor.
- Projects: Eligible projects must boost private sector investment in startup businesses to accelerate the development of new products, processes and practices and bring them to market; helps angel investor networks and their associations attract new investment and supports the growth of angel investment funds.
- Timeline: Projects must be completed by March 31, 2014.
- Eligibility factors: under 50 employees
- Source: FedDev Ontario
The benefit to the business is the potential for a low interest loan as a top-up to that provided by Angel or VC investors. Terms of loans are undefined and will be negotiated on project by project basis. They could be 3-10 year term loans.
Where to find an Angel Investor
With respect to Angels – the one I see the most in Waterloo region is called the Golden Triangle Angelnet which is part of the National Angel Organization – Ontario’s Angel Network Program. Typical size investments are in the $250k-500k range. Golden Triange Angelnet has no restrictions on types of companies that they can look at, but FedDev’s Investing in Business Innovation program is specifically targeted at commercializing technology.
Their organization has no specific “eligibility” factors, but they do have a registration and screening process which involves:
- Companies must register through the website Golden Triangle Angelnet in the section on the home page titled “For Entrepreneurs” to provide a company profile and description of its investment opportunity, and
- Be invited to present to our selection committee which screens companies for eventual presentation to our angel investor membership. Investor meetings are held once per month.
Definition of Angel or Venture Capital Investor
FedDev Ontario has defined the certification standards for an angel or venture capital investor for the Investing in Business Innovation initiative as:
“An angel investor must meet the Ontario Securities Commission definition of an accredited investor. The angel investor must also be a member of an angel investor network in southern Ontario registered with the National Angel Organization – Ontario or another reputable industry association.
A venture capital provider must be registered with the Canadian Venture Capital Association.”
Mentor Works provides support to educate business owners on potential government funding vehicles that are available in Ontario and consulting services to ease the application process. If you would like additional support to complete the application process and learn of others, please do not hesitate to contact us at Mentor Works.