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The Federal Economic Development Agency for Southern Ontario announced a new Investing in Business Innovation program. The program offers matching for early-stage venture funding. This is a $190MM running from 2010-2014.
There are provisions for startups and angel networks. Since we’re StartupNorth, let’s try to deal with the startup side first.
- Startups who receive a termsheet from a qualified angel investor (as defined by the Ontario Securities Commission) or venture capital firm (registered with the Canadian Venture Capital association) are eligible to apply for up $1MM in loan from the federal government.
- Restrictions:
- Start-up businesses will be eligible for repayable contributions up to $1 million for no more than one third (33? percent) of total eligible and supported project costs.
- An angel and/or venture capital investor(s) must be committed to provide at least two thirds (66? percent) of the cash contribution toward eligible and supported project costs.
- In-kind contributions related to mentoring, networking, and other business skills cannot be considered as part of the angel or venture capital investor’s cash contribution.
- A maximum of one project per eligible start-up SME can be funded under the initiative.
- Direct eligible costs for start-up businesses may include:
- Labour, capital and operating expenditures;
- Materials and supplies;
- Consulting and/or professional fees (limited to market rate); and,
- Minor and non-capital acquisitions (e.g., software).
- All project activities must be completed by March 31, 2014;
Basically there is federal government matching loans up to $1MM for startups that are raising angel or venture funding in Southern Ontario. This is a fantastic start.
It’s great for startups in Southern Ontario, it’s curious that the program is only available in Southern Ontario. Why not all of Canada? How are the repayment terms set? Is this a zero percent interest loan from the Federal Government? Does the term sheet have to be equity investment? Is convertible debt eligible? How do startups “demonstrate they are using business mentoring, counseling, or related services”?
What is the boundary of “Southern Ontario”?
What is the boundary of “Southern Ontario”?
What is the boundary of “Southern Ontario”?
I’m assuming the same area as defined here: http://en.wikipedia.org/wiki/Southern_Ontario
Northern Ontario has long had it’s own Economic Development Agency
I’m assuming the same area as defined here: http://en.wikipedia.org/wiki/Southern_Ontario
Northern Ontario has long had it’s own Economic Development Agency
This is a great program to foster innovation & entrepreneurship in Ontario. Is it a firm requirement that the initial seed capital be funded by VCs or angels in southern Ontario?
This is a great program to foster innovation & entrepreneurship in Ontario. Is it a firm requirement that the initial seed capital be funded by VCs or angels in southern Ontario?
What a weird way to divide up the province:
“Southern Ontario is home to over 92 per cent, or 12.1 million, of Ontario’s total population of 13.1 million people, compared to approximately 1 million in Northern Ontario.” (from the wikipedia article)
What a weird way to divide up the province:
“Southern Ontario is home to over 92 per cent, or 12.1 million, of Ontario’s total population of 13.1 million people, compared to approximately 1 million in Northern Ontario.” (from the wikipedia article)
Definition of Southern Ontario From one of the programs listed on the FedDev website:
http://www.feddevontario.gc.ca
“Southern Ontario is defined by the following 2006 Statistics Canada Census Regions:
1 Stormont, Dundas and Glengarry; 2 Prescott and Russell; 6 Ottawa; 7 Leeds and Grenville; 9 Lanark; 10 Frontenac; 11 Lennox and Addington; 12 Hastings; 13 Prince Edward; 14 Northumberland; 15 Peterborough; 16 Kawartha Lakes; 18 Durham; 19 York; 20 Toronto; 21 Peel; 22 Dufferin; 23 Wellington; 24 Halton; 25 Hamilton; 26 Niagara; 28 Haldimand-Norfolk; 29 Brant; 30 Waterloo; 31 Perth; 32 Oxford; 34 Elgin; 36 Chatham-Kent; 37 Essex; 38 Lambton; 39 Middlesex; 40 Huron; 41 Bruce; 42 Grey; 43 Simcoe; 46 Haliburton; and 47 Renfrew.
A list of the communities that form part of each Census Division is available online. http://bit.ly/d1tqSI “
Definition of Southern Ontario From one of the programs listed on the FedDev website:
http://www.feddevontario.gc.ca
“Southern Ontario is defined by the following 2006 Statistics Canada Census Regions:
1 Stormont, Dundas and Glengarry; 2 Prescott and Russell; 6 Ottawa; 7 Leeds and Grenville; 9 Lanark; 10 Frontenac; 11 Lennox and Addington; 12 Hastings; 13 Prince Edward; 14 Northumberland; 15 Peterborough; 16 Kawartha Lakes; 18 Durham; 19 York; 20 Toronto; 21 Peel; 22 Dufferin; 23 Wellington; 24 Halton; 25 Hamilton; 26 Niagara; 28 Haldimand-Norfolk; 29 Brant; 30 Waterloo; 31 Perth; 32 Oxford; 34 Elgin; 36 Chatham-Kent; 37 Essex; 38 Lambton; 39 Middlesex; 40 Huron; 41 Bruce; 42 Grey; 43 Simcoe; 46 Haliburton; and 47 Renfrew.
A list of the communities that form part of each Census Division is available online. http://bit.ly/d1tqSI “
Jennifer,
My interpretation is that the angels and VCs don’t need to be in Ontario. They need to meet the requirements as an accredited angel investor as defined by the Ontario Securities Commission or that they are a venture firm registered with the Canadian Venture Capital Assocation (CVCA). But there is no requirement that the funder be located in Southern Ontario.
Again my interpretation is that the startup must be in Southern Ontario see John MacRitchie’s comments of the definition of this below http://www.startupnorth.ca/2010/10/19/feddev-steps-up/#comment-88334197
Jennifer,
My interpretation is that the angels and VCs don’t need to be in Ontario. They need to meet the requirements as an accredited angel investor as defined by the Ontario Securities Commission or that they are a venture firm registered with the Canadian Venture Capital Assocation (CVCA). But there is no requirement that the funder be located in Southern Ontario.
Again my interpretation is that the startup must be in Southern Ontario see John MacRitchie’s comments of the definition of this below http://www.startupnorth.ca/2010/10/19/feddev-steps-up/#comment-88334197
FedDev Ontario defines the region. See John MacRichtie’s comments http://www.startupnorth.ca/2010/10/19/feddev-steps-up/#comment-88334197
FedDev Ontario defines the region. See John MacRichtie’s comments http://www.startupnorth.ca/2010/10/19/feddev-steps-up/#comment-88334197
David –
Pretty much correct. On the Angel side, they also have to meet the following, both the OSC definition and be registered.
“An angel investor is defined as an investor that meets the Ontario Securities Commission definition of an accredited investor. The angel investor must also be a member of an angel investor network in southern Ontario registered with the National Angel Organization – Ontario or another reputable industry association.”
Bryan
This is a pretty sweet deal for Ontario startups. At first glance, it even seems like a program that can attract attention from VC south of the border.
This is a pretty sweet deal for Ontario startups. At first glance, it even seems like a program that can attract attention from VC south of the border.
Definitely, the catch is that the US-based VC would have to become a member of CVCA but that’s such a small hurdle.
Definitely, the catch is that the US-based VC would have to become a member of CVCA but that’s such a small hurdle.
How do I get my mitts on this.
How do I get my mitts on this.
Thanks David and Bryan. I’d like to get involved with Ontario-based startups. I’ve been monitoring the great progress in Toronto over the past couple years with hometown pride. I will look into this program for further details.
Thanks David and Bryan. I’d like to get involved with Ontario-based startups. I’ve been monitoring the great progress in Toronto over the past couple years with hometown pride. I will look into this program for further details.