WTM22 - 5 Ws of Funding your Tech Company by Sahar Ansary

In this webinar, we will provide an overview of the 5Ws of funding (who, what, where, why, and how) to give tech entrepreneurs valuable perspective on how to find and secure funding for their businesses.

Transcript

1. Sahar Ansary, M. Eng. Partner at R&D Partners The 5 “Ws” of Funding
2. Sahar Ansary, M.Eng. Partner at R&D Partners and Co-Founder of Fundica sansary@rdpartners.com 2000+ PROJECTS FILED $300M CLAIMED 15 YEARS IN BUSINESS 2
3. AGENDA Funding types and who provides funding How to get funded? What to fund? Different sources of funding - Tax Credits - Grants How to combine funding and maximize your success Where to find funding and some best practices 01 02 03 04 05 06
4. M IRACLE 4 When to apply Example Tax Credit After costs have been incurred SR&ED Grant Before costs have been incurred NRC IRAP Loan Before costs have been incurred BDC Startup Financing Loan Guarantee Before being approved for a loan Canada Small Business Financing Loan (CSBF) Equity Anytime Real Ventures, iNovia, etc. Other Anytime Crowdfunding and more Types of Funding
5. M IRACLE 5 Who Provides Funding and Why? Financial Motivation Expected Return Expected Revenue Business Model Key Considerations Tax Credits Pre-defined n/a n/a n/a Tax Law Grants Societal n/a >$0 Reasonable Best In Line Public Loans Societal 5 – 10% >$0 Reasonable All factors Private Loans ROI 5 – 20% >$30k Security Assets & CF Angel Investors ROI >20% <$100M Believe it! Cash to CF+ Venture Capital ROI >25% >$100M Traction Time to Exit
6. M IRACLE How to Look for Funding Apply for gov’t funding Seek cash injection 1. Love money, angel 2. Bootstrap STOP Apply for bank loans Seek Angel or VC Yes No Build team END START No Yes No Yes Yes No Yes Yes No No Commercially Viable Product & Market? Core team? Cash-in-hand? Gov’t funding? (tech, youth, hiring) CF history or assets? Additional capitalization 6
7. M IRACLE 7 Funding Areas Workforce Product Development Marketing Capital Expenditures Wage subsidies for tech and commercial positions, as well as training initiatives Research and development initiatives, as well as collaborative development with universities Out-of-province/ country business development or marketing missions in new markets Property, plant and equipment purchase, as well as any leasehold improvements
8. M IRACLE Tax Credit for the Development of E-Businesses Tax Credit for Scientific Research and Experimental Development SR&ED E-BUSINESS MULTIMEDIA CO-OP INTERNSHIPS Tax Credit for the Development of Mul media Titles Tax Credit for work-integrated-learning internships Tax Credits 8
9. M IRACLE National Research Council Canada (NRC-IRAP) IRAP SWPP GRANTS ACCELERATE ALLIANCE GRANTS Student Work Placement Program (SWPP) – Employment and Social Development Canada Mitacs Natural Sciences and Engineering Research Council of Canada (NSERC) Grants 9
10. M IRACLE - Most programs reimburse between 30% and 50% of the eligible expenses - Combining (also known as "stacking") government funding programs for the same expenses is often possible - Stacking limits vary (typically range around 75% of overall eligible expenses) - Optimize with different sources of funding for different expenses How to Combine Funding 10
11. M IRACLE How to Maximize your Chances of Success - Become well aware of what funding opportunities exist and evaluate them based on your project and your needs - Understand each funding opportunity’s objectives and which activities and expenses it will fund - All government funding programs have different objectives and requirements - Plan out each step of your project: timeline, planned project activities, detailed and itemized budget, human and financial resources, projected technological/product developments and commercial potential 11
12. M IRACLE Where to Find Government Funding Entrepreneurs Dedicated Researchers Internet Bots Traditional Funders Advisors 12
13. Custom funding results Ordered by relevancy and type of funding 13
14. M IRACLE 14 Best Practices - Always move from government to banks to VCs - Really understand and target each funder - Put together a killer application / pitch - Develop a win-win relationship - Move the deal to a close
15. Visit www.rdpartners.fundica.com