You're out biking on a Saturday morning
and suddenly, in a flash of brilliance, everything you've ever learned
or experienced gels into the most amazing idea for a product ever
conceived. The wheels spin, the mind spins faster. Many things need to
be accomplished: you need to put together a development team, you need a
sound market assessment, you need a business plan, you need MONEY. The
wheels stop and your fleeting moment of elation passes - where can I get
money to do the research and development?
Sourcing money for research and development, in fact for all aspects of
your business's development, requires as much forethought, planning and
intelligence as all other aspects of your venture. Fortunately there are
a lot of resources; people who can point you towards the pot at the end
of the rainbow and many people, both government and private, with funds
that they are looking to invest in research and development. Literally
hundreds of millions of dollars gets spent on R & D annually in British
Columbia with the funds coming from the provincial and federal
governments, banks, venture capital firms and companies. Be thorough and
creative and, if your venture is well conceived and presented, you will
be successful in finding the financing you require.
The
first source is yourself. Other investors are going to want evidence
that you have committed your heart and soul to your new venture. In
addition to your own resources the next obvious step is your immediate
circle of friends and family. Concurrent with seeking and expanding this
"love money" all other sources need to be investigated.
BC Innovation Council offers a number of financial support programs
including funding for a range of research and development initiatives,
and a suite of programs focused on accelerating commercialization and
enhancing collaboration in British Columbia's technology industry (ACE).
The initial programs developed under ACE are scholarships
that partner a science, engineering or health research graduate student
with an MBA student to collaborate in technology development, create a
business plan and pitch the opportunity to investors and industry.
The federal government offers direct financial assistance
through the
National Research Council (NRC), the
Natural Science and Engineering Research Council (NSERC), and the
Canadian Institutes of Health Research (CIHR).
In addition, Revenue Canada provides tax relief and even
cash refunds through its
Scientific Research and Experimental Development (SRED) program.
Many federal departments also offer programs specific to the area of
their responsibility (e.g. Agriculture and Agri-Food Canada).
For a complete listing of federal government initiatives
visit the Strategis website at
http://strategis.ic.gc.ca.
The
National Research Council offers the most complete suit of R&D
assistance programs. Its
NRC-IRAP program provides non-repayable contributions to Canadian
businesses interested in growing by using technology to commercialize
services, products and processes in Canadian and international markets.
As your idea and company mature several other options arise
for significant investment in R & D. These includes venture capital
firms, various instruments of the Vancouver Stock exchange and , yes,
even banks. The VSE offer the options of a public listing or the
creation of Venture Capital Pools. Contacting representatives of the VSE
could reveal financing options that you have not previously considered.
Most of the chartered banks have created special high
technology teams with expertise in assessing nascent businesses. A
meeting with this new breed of bankers isn't simply a one-way exchange
with a blue-suited banker asking what you can pledge as collateral.
Significant changes in the venture capital community in
British Columbia have occurred over the past several years. Three trends
are worth noting; firstly, the amount of venture capital is increasing;
secondly the percentage of investments in high technology is increasing;
thirdly, the amount of the initial investment is decreasing. When taken
together these indicate that venture capitalists are, more than ever,
willing to look at early stage investments in technology based ventures
including projects still at the research and development stage.
In summary, funding to conduct research and development is
available from your own personal contacts; from the provincial and
federal governments; and from banks, the stock exchange and venture
capital firms. However, wherever you go for money potential investors
will want to hear about much more than your earth shattering idea.
They'll want to know about you, your team, your market, your business
plan, your developmental plan, your intellectual property protection
strategy
Spend some time visiting the web sites,
consider all the financing options, assemble all the parts of your
project and come up with a financial plan as tight as the technical plan
that started you on this (ad)venture!
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