Start-up companies are a popular topic of conversation these days, especially in Southwestern Ontario. There are many resources for these new companies including government funding and tax credit programs. It is critical that these companies are made aware of programs and services that can help them reach their business objectives.
The Scientific Research & Experimental Development program becomes available to start-up companies once they hire new employees and develop a payroll system. It is critical that new companies develop tracking systems for their R&D work in order to develop a strong SR&ED claim. First-time applicants are more likely to be audited by the Canada Revenue Agency so it is very important that supporting documentation is ready and organized.
Government funding programs become available to companies that can demonstrate revenue, reach 10-15 employees, and develop at least a two year track record of success. It is critical that companies understand the programs that may be applicable to their projects or initiatives on an on-going basis.
Our NorthBridge team of business analysts can help identify eligible projects for both SR&ED and grant funding programs. We also assist with the completion of application information, preparation of financial information, creation of business plans, and required reporting after application submission.
Accelerators and incubators based in Canada that support the development and growth of start-up companies can receive funding from the Industrial Research Assistance Program (IRAP). The Canadian Accelerator and Incubator Program (CAIP) will provide non-repayable funding over a five year period to a limited number of qualified applicants. To ensure that the funding is allocated to the appropriate sector needs, the program will be assisted by a Venture Capital Expert Panel, which will be assembled by the Minister of Finance. The National Research Council of Canada (NRC-IRAP) is accepting proposals until October 30, 2013.
The National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP) is Canada’s first-class innovation program that supports small to medium sized enterprises (SMEs). IRAP is integral to the NRC and has been recognized world-wide for its contributions to innovation in Canada.
Gener8, a technology company based in Vancouver, British Columbia who provides solutions to the entertainment industry, recently received up to $400,000 in funding from the Industrial Research Assistance Program (IRAP). IRAP, administered by the National Research Council (NRC), assists SMEs with the development and commercialization of innovative, technology-driven, new and improved products.
Gener8 specializes in 3D stereo conversion services, cloud-based data management, and analytics solutions for the entertainment industry. They currently have 150 employees at their Vancouver location and the assistance from IRAP will allow them to hire recent university graduates to continue to help innovate their 3D conversion technology.
“This (funding) will enable Gener8 to develop solutions to complex problems in computer graphics and image processing that are central to our 3D conversion process to ultimately streamline the 3D conversion process” stated Gener8’s COO, Tim Bennison. Gener8 hopes to further enhance their strong reputation in Hollywood. You can see their technology in films such as Harry Potter, Ghost Rider 2, and The Amazing Spider-Man.
SemiosBIO Technologies Inc. a discoverer and developer of pheromone-based pest control solutions recently received up to $474,000 through the Investing in Business Innovation (IBI) fund. The IBI fund assists start-up businesses to accelerate the commercialization of new products, processes, and practices by increasing, stimulating, and leveraging private sector investment. According to a news release by FedDev, the money will be used to complete product development and pre-commercialization activities for a pest control management product known as SemiosGUARD. SemiosBio Technologies Inc. will be the first in the world to develop and commercialize this pheromone-based bedbug management product. The product is expected to have a significant positive impact on the hospitality sector. With the assistance of funding, the company anticipates creating 46 jobs in southern Ontario by 2017.
The IBI initiative addresses the development and commercialization challenges faced by start-up businesses in southern Ontario by helping them to obtain angel and venture capital investments in the development of their businesses. The initiative aims to: accelerate the commercialization of new products, processes, and practices; increase, stimulate, and leverage private sector investment; and encourage the growth of angel investment funds. Through this fund, SemiosBio Technologies was able to attract almost $1 million in investments from a group of angel investors.
A recent PwC report found that Canadian start-up companies are looking more into building their business than into Mergers & Acquisition exits. Government funding provides significant assistance for Canadian technology start-ups, with 50% of start-ups surveyed applying for at least one source of funding, according to the report. Amongst these start-ups, 35% said they took advantage of “Scientific Research and Experimental Development” tax credits (SR&ED), while 20% said they dipped into the Industry Research Assistance Program (IRAP).
Canadian start-up companies can take advantage of both SR&ED and IRAP programs. IRAP can assist start-ups with upfront funding, prior to the onset of a R&D project. IRAP can provide SME’s with up to $250,000 to encourage technological innovation, and is administered by the National Research Council (NRC). On the other hand, SR&ED is administered by the Canada Revenue Agency (CRA), and reimburses companies for R&D expenditures after they have been incurred.