Funding Sherpa: A Practical Guide to Government Funding. Dan Mathers MaRS Investment Accelerator Fund

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1 Funding Sherpa: A Practical Guide to Government Funding Dan Mathers MaRS Investment Accelerator Fund

2 Introducing me.. Father of 2 amazing daughters Technology guy Electrical Engineer, MBA 26+ years experience in tech business Big Companies: IBM, Celestica SMEs/Startups: MOSAID, IceFyre, esight Consulting: IronBit Last couple of years spent coaching, mentoring and investing Past EIR at Communitech Several Embedded Executive Roles MaRS IAF Investment Director

3 MaRS Investment Accelerator Fund (IAF) Seed investment fund Levers resources of Regional Innovation and Accelerator Centers Targets most promising Ontario technology startups investments per year up to $500,000 per investment

4 IAF Investment Criteria Our sweet spot is companies with the following attributes: Potential to build a large and scalable business defensible intellectual property or proprietary knowledge with a sustainable competitive advantage; and the management and technical skills needed to successfully carry out business Total cumulative revenue <$500,000

5 IAF Investment Structure Convertible debenture OR $500, % equity Prime + 1% interest (accrues to maturity) 3 year term 20% discount on conversion at maturity Also converts at 20% discount If company raises >$1M during term Equity Same terms as arms length investors

6 55 INVESTMENTS TO DATE Information Technology, Communications & Entertainment Life Sciences & Healthcare IT Cleantech & Advanced Materials

7 Overview >4,000 government grants and funding programs in Canada, across all stages of companies/all sectors Lots of places to get a consolidated listing including: Not all programs have money & you can t always count on the website information being accurate

8 So how do I get the money????? Follow the 5 Steps!

9 Step 1: Understand the Landscape Government funding falls into 4 broad classifications Grants Repayable Loans Investments Tax Credits Further broken down into Government and NGO (Non-Government Organizations) Many programs have a matching requirement

10 Step 2: Identify the Programs that Fit Every Program generally has specific outcomes that they are trying to achieve Each Program has unique requirements and very different structures Must determine the intersection of programs that currently have money and programs that your company and needs map to

11 Step 3: Create a Funding Strategy Develop a deliberate plan for dilutive and non-dilutive financing Plan ahead many programs have a significant lead time Understand the stacking rules and matching requirements Treat this like a sales funnel!

12 An Aside This really is a sales process Your customer is the manager of the funding program. Their need is to give money to high quality companies Your product is your business, and your funding application Most program managers genuinely want you to be successful and will work hard to help

13 Step 4: Pull together required materials Investor Presentation Business Plan Financial Model Fill out applications (a lot of cutting a pasting!) Make sure you spell out how your business will meet the key program objectives Jobs Revenues New Products

14 Step 5: Get the Ball in Play Get networked into the Program Managers Warm intros count Get plugged into your local RIC Call the program managers and fully understand requirements, and what makes for a successful application Prioritize the program applications and get them submitted!

15 Use Case: Medical Devices Company IRAP Contribution Agreement & Youth Employment Program + OCE Interact & Market Readiness & CCR + MaRS IAF + MaRS BAP/Embedded Exec/Prototype HTX + Fed Dev IBI + Angel Money + SR&EDs + SOFII?

16 A Few Final Thoughts..

17 Government Funding is a bit like Whack-a-Mole

18 A Relationship is more valuable than words can describe

19 Remember. Government and NGO Funding can be a key part of your funding strategy Get plugged in to those who can help you Understand the landscape and what everyone s needs are Emphasize how you meet those needs in your funding app and throughout the process Execute, and you tend to go to the front of the line for future