In our blog series about Funding, we take a look at different ways startups can get funds to boost their projects. The funds we consider are related to technology development, to get tech startups off the ground.
In our first blog, we provided a guide to help entrepreneurs find the right funding option for their startup. Our second blog shared about Scientific Research and Development (SR&ED) as one of the incentive providers in technological innovation startups.
The third blog entry focused on another well-known government department that gives grants for technology startups, the Industrial Research Assistance Program of the National Research Council (NRC-IRAP) IRAP.
Now for today’s blog, you will learn a thing or two about Commercialization Grants in Ontario.
You had a great jumpstart in your business, it grew, and you want to expand some more. What is next? The answer is Commercialization.
What is Commercialization?
Commercialization is the process of bringing new products or services to market. The broader act of commerce entails production, distribution, marketing, sales, customer support, and other fundamental functions critical to achieving the commercial success of the new product or service.
Typically, commercialization occurs after a small business grows and it mounted the operations that reached levels allowing it to achieve a vast market successfully.
Commercialization requires a carefully-developed three-tiered product launch and marketing strategy that encompass the following major components:
- The ideation phase
- The business process stage
- The stakeholder stage
Commercializing a product or service can be difficult, but with the help of a grant, it can be a little bit easier. In this blog, we will provide an overview of two types of grants available for commercialization. We also list some of the eligibility requirements and provide a few tips on how to apply.
EQUITY FOR EARLY-STAGE COMMERCIALIZATION IN ONTARIO
Capital investments of up to $125,000 at the customer-creation stage and up to $250,000 at the company-building stage support the development of innovations giving companies a competitive advantage.
Market readiness co-investment fund
To support the growth of disruptive/next-generation technologies into scalable businesses, the Market Readiness Co-Investment Fund through Ontario Centre for Innovation (OCI) provides direct investment to Ontario companies and entrepreneurs with competitive/transformational IP.
Furthermore, academic institutions or businesses affiliated with campus incubators/accelerators such as Venture Incubation Program (VIP), Launch Lab X, StartX, and MaRS that are located at academe institutes best suit this grant. Companies that are university spin-outs or school-founded companies are eligible to apply.
Eligibility and Application Process for market readiness co-investment fund
You are eligible to apply for the Market Readiness Co-Investment Fund, if your company incorporates in Ontario with principal operations. You are also eligible to apply if your business has raised less than $1 million in third-party capital for your first MR investment. Ontario Centre for Innovation (OCI) supports early-stage companies that raise pre-seed and seed investments (total round sizes range from $500,000 to $2 million).
If your business meets the qualifications, you can fill out the interest form to apply for the grant.
Money for International Commercialization
Money is always a hot topic, especially when it comes to international business. For companies looking to expand their operations into new markets, the issue of how to finance that growth can be a major challenge. There are a variety of options available for businesses seeking funding for international commercialization. Each option has its own advantages and disadvantages, so it’s important to carefully consider all of your choices before making a decision.
1. CANEXPORT
CanExport Innovation can award to cover up to 75% of the costs for exporting your technology overseas up to $75,000. In response to COVID-19, CanExport Innovation now supports non-travel-related activities as well.
CanExport supports the following non-travel activities:
- Protecting intellectual property on international markets
- Certification in international markets
- Getting business and legal advice from experts
- Shipping technology to determine feasibility/compatibility with a technology partner
- Making promotional plans or materials available in foreign languages, adapting and translating
- Participating in virtual networking functions, meetings, or conferences
CanExport shall support the activities below, when travel resumes
- Engage in meetings in Canada or abroad with pre-identified foreign partners
- Meet with foreign investors in the U.S. or Canada
- To attend an event or conference to meet with pre-identified foreign partners or investors
Eligibility and Application Process for CanEXPORT
CanExport Innovation accepts proposals from small and medium-sized enterprises in Canada. They also cater proposals from academic institutions and Canadian non-government research groups in Canada.
First, you should register your organization in Canada. It should also have a Canada Revenue Agency (CRA) business number to participate.
Second, to qualify for the grant, you must own or co-own a decision-making authority on the intellectual property (IP) rights of innovation. You must have a prototype (Technology Readiness Level 4 or higher).
Lastly, your product must intend to commercialize within five years.
Contact CanExport Innovation to apply for this grant. First, You need to request an application package and get estimates and documents that support your proposed expenses. Second, you must submit the application 40 days, before the activity starts.
2. Export Development Canada (EDC)
Another funding for export that you can look into is the Export Development Canada (EDC). With EDC, you can accelerate your company’s growth with quick access to reliable capital. You can match investments with EDC of up to $5 million in capital.
With a goal of accelerating the growth of Canadian businesses, EDC will work with your venture capital or private equity investor(s) to increase the capital available to you—under their commercial terms. With expedited approval within 10 business days, EDC can help you access more capital to grow your business.
Eligibility and Application Process for EDC
To qualify, your business should meet the following criteria:
- Business should be categorized as either small- or medium- sized businesses, with more than C$500,000 in revenue (maximum eligible revenue is C$300 million).
- Has international growth as a key priority of business growth plans.
- Has an established relationship with a qualified institutional venture capital or private equity investor (as an existing investor or at the term sheet stage).
To apply, you should adhere to the following steps:
- You connect with your venture capital or private equity investor to let them know you’re interested in the EDC Investment Matching Program
- Your investor will connect with EDC to find out if they qualify.
- If they qualify, your investor will share their investment memorandum (detailing their due diligence) with EDC.
- Your investor will then enter into an agreement to share additional information with EDC.
- EDC will reach out to you and your investor(s) to gather information, verify due diligence and understand the investment opportunity.
- Upon completion of expedited diligence, you can be approved within 10 business days.
Their process seems simple and straightforward. However, their approval of your application is not assured, and meeting the eligibility criteria is only a step in EDC’s expedited review process.
Conclusion
Understanding how to win a grant for commercialization can seem complicated, but it doesn’t have to be. With this simple guide, you’ll learn the basics that will help you get started on your journey towards going from idea to marketplace.
Want to know more?
Contact us
The team at NuBinary is ready to help you succeed in business. Get in touch with NuBinary by visiting https://nubinary.com/work-with-us if you have questions about how NuBinary can help you access these funds.
