Investing in Business Innovation Guidelines

Background

High-growth businesses and new entrepreneurs are critical to southern Ontario's competitiveness. These entrepreneurs face challenges of raising adequate capital in Canada, developing entrepreneurial skills, and accessing the expertise and connections of the investment community.

Investing in Business Innovation (IBI) will help to create a more competitive southern Ontario economy by focusing on providing business training to new entrepreneurs, helping them to start a new business and attract the private angel and/or venture capital required to grow a business commercializing world-leading innovations.

The potential of these new, early-stage businesses is measured by the investment commitments they can secure from accredited angels and/or venture capital investors. In addition to providing funding, investors can offer valuable advice and foster relationships that can help accelerate the growth of these businesses.

Objectives

The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) will provide funding to eligible projects under three funding streams:

  1. Not-for-profit organizations
  2. Early-stage businesses
  3. Angel networks

A. Not-for-profit Organizations

Eligibility

I. Eligible Applicants

Incorporated not-for-profit organizations such as Regional Innovation Centres, incubators, accelerators, angel networks and Community Futures Development Corporations (CFDCs) located in southern Ontario are eligible to apply for projects related to providing skills development, education, and seed financing to new entrepreneurs and businesses to help them to be investment ready.

To be considered for funding, Applicants must demonstrate:

Note: Incomplete applications cannot be considered for funding.

II. Eligible Activities

This initiative will support the activities of eligible organizations delivering services to entrepreneurs to undertake activities related to providing innovative new entrepreneurs with business skills, education and seed financing to prepare them for investment readiness such as:

III. Eligible Costs

Eligible costs may include:

All costs must be reasonable and directly related to eligible activities.

IV. Ineligible and/or Unsupported Costs

Priorities

The Agency may give preference to certain priority sectors or projects that diversify a regional economy.

Funding

Eligible Applicants will be considered for a non-repayable contribution to a maximum of $20 million per project up to 100 percent of eligible costs.

Notes:

Disbursement of Funding

If a project receives approval, a contribution agreement will be negotiated and executed. Funding will be disbursed based on the percentage approved funding for eligible costs incurred.

To receive funding, approved recipients must submit claims forms that summarize eligible costs incurred in a period. These periods will be of a duration of no more than once a month and no less than twice a year.

Application Process

This is a continuous intake application process. Eligible organizations must complete and submit a full application to be considered for funding.

Prior to submitting an application, applicants are encouraged to contact the Agency to discuss their project's fit with program criteria and objectives.

To be considered for funding, the application must include:

Application Review (applicable to all funding streams)

FedDev Ontario will review applications as they are received. Funding will be made available as of April 1, 2014. All project activities must be completed by December 31, 2018. All applications will be screened initially for completeness. Incomplete applications cannot be assessed and considered for funding.

Complete applications are those that include all prescribed documentation containing all information needed to complete the review. Information should be accurate, verifiable, relevant and consistent. Incomplete applications cannot be assessed and considered for funding.

FedDev Ontario reserves the right to modify these guidelines at any time without notice and may waive certain requirements on an exceptional basis.

Reporting Requirements (applicable to all funding streams)

Recipients must submit to FedDev Ontario, reports of project expenditures and completion of deliverables, including achievement of performance indicators identified in contribution agreements.

Contact Us (applicable to all funding streams)

For more information on FedDev Ontario's Investing in Business Innovation initiative, please email us or call 1-866-593-5505.

B. Early-stage Businesses

Eligibility

I. Eligible Applicants

To be considered for funding, Applicants must demonstrate:

Notes:

II. Eligible Activities

This initiative will support the activities of eligible early-stage businesses to undertake activities related to late-stage development and early-stage commercialization of innovative, unique products and processes (including business development), for example, activities related to:

III. Eligible Costs

Eligible costs may include:

All costs must be reasonable and directly related to eligible activities.

IV. Ineligible and/or Unsupported Costs

Priorities

The initiative will normally support early-stage businesses focused on diversifying markets.

The Agency may give preference to companies that received prior angel and/or venture capital investments or projects that diversify a regional economy.

Funding

Eligible Applicants will be considered for a repayable contribution to a maximum of $1 million per project for up to one-third (33.3 percent) of eligible costs.

Notes:

Financial assistance from government programs may have tax implications for your business. It is recommended that advice be obtained from a qualified tax professional.

Disbursement of Funding

If a project receives approval, a contribution agreement (contract) will be negotiated and executed. Funding will be disbursed based on the percentage approved funding for eligible costs incurred.

To receive funding, approved recipients must submit claims forms that summarize eligible costs incurred in a period. These periods will be of a duration of no more than once a month and no less than twice a year.

Repayment

Contributions will be unconditionally repayable. Repayments of contributions will be expected to commence as soon as reasonably possible, without compromising the success of the project or the organization receiving the funding. The specific terms of repayment, including date of commencement and length of repayment term, will be determined on a case-by-case basis during the development of the contribution agreement. Repayments will begin no later then one year following the completion of the project.

Application Process

This is a continuous intake application process. Eligible start-up companies must complete and submit a full application to be considered for funding.

Prior to submitting an application, potential Applicants are strongly encouraged to contact the Agency at 1-866-593-5505 for help with your application and to discuss other Government programs that may be applicable to your opportunity.

To be considered for funding, the application must include:

C. Angel Networks

Eligibility

I. Eligible Applicants

Incorporated not-for-profit network organizations representing angel investors in southern Ontario and located in southern Ontario.

To be considered for funding, Applicants must provide/demonstrate:

Note: Incomplete applications cannot be considered for funding.

II. Eligible Activities

This initiative will support the activities of Eligible Angel Investor Networks to attract more investment and increase the efficiency and effectiveness of investment in innovative, high-growth potential start-up businesses. Areas of focus may include:

III. Eligible Costs

Eligible costs may include:

All costs must be reasonable and directly related to eligible activities.

IV. Ineligible and/or Unsupported Costs

Priorities

The Agency may give preference to certain priority sectors or projects that diversify a regional economy. Innovations that are targeted primarily at retail consumer markets will not be considered under this initiative.

Funding

Eligible Angel Investor Network Organizations will be considered for a non-repayable contribution to a maximum of $500,000 for up to 100 percent of eligible costs.

Note: FedDev Ontario support is not intended to replace available commercial financing. Costs that could be, in whole, financed by equity, commercial financing, and/or capital markets will not normally be supported.

All projects must be completed by December 31, 2018.

Disbursement of Funding

If a project receives approval, a contribution agreement (contract) will be negotiated and executed. Funding will be disbursed based on the percentage approved funding for eligible costs incurred.

To receive funding, approved recipients must submit claims forms that summarize eligible costs incurred in a period. These periods will be of a duration of no more than once a month and no less than twice a year.

Application Process

This is a continuous intake application process. Eligible Angel Investor Network Organizations must complete and submit a full application to be considered for funding.

Prior to submitting a Statement of Intent, potential Applicants are strongly encouraged to contact the Agency at 1-866-593-5505 for help with your application and to discuss other Government programs that may be applicable to your opportunity.

To be considered for funding, the application must include:

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