Waterloo Region, Ontario
20 June 2014
Our Government is committed to creating jobs and opportunities, and strengthening Canada's economy. That means helping small- and medium-sized enterprises make competitive gains and create high-quality jobs. Canada requires a strong, sustainable venture capital industry to support promising young businesses and ensure they are able to drive job creation, innovation and economic growth.
Business accelerators and incubators are organizations that provide entrepreneurs with the resources and expertise needed to develop their business plan. They play an important role in the venture capital system, serving as invaluable classrooms for entrepreneurs and helping them make headway in a competitive international marketplace.
To this end, on June 20, 2014, Prime Minister Stephen Harper announced that the following organizations have been chosen to advance in the selection process under the Canada Accelerator and Incubator Program (CAIP):
Eligible recipients are required to demonstrate matching contributions on at least a 1:1 basis during the period of the contribution funding. The exact amount for each organization will be determined once contribution agreements have been finalized. It is estimated that up to $90 million will be allocated to eligible organizations once these contribution agreements are concluded.
In 2013, the Government allocated $60 million over five years through the Economic Action Plan, with an additional $40 million in 2014, to help outstanding incubator and accelerator organizations expand their services to worthy entrepreneurs.
The one-time request for the proposal process was launched on September 23, 2013, and ended on October 30, 2013, with close to 100 applications received. All proposals were assessed according to strict eligibility and selection criteria. These were presented for evaluation and recommendations to the independent Canadian Venture Capital Expert Panel, a five-member panel with extensive experience in the venture capital asset class, business, and finance.
The National Research Council's Industrial Research Assistance Program (NRC-IRAP) evaluated all proposals based on strict eligibility and selection criteria, including:
- The extent to which the project will encourage the growth of early-stage firms that represent superior investment opportunities;
- The potential of the project to develop entrepreneur networks with other important firms and organizations, in order to provide entrepreneurs with a broader range of specialized services;
- The ability of the organization to demonstrate matching resources, either financial or in-kind, (i.e. mentoring resources, administrative support) for the proposed activities; and,
- A credible demonstration that the proposed activities will be incremental to existing operations.
Once the independent Canadian Venture Capital Expert Panel returned their recommendations, NRC-IRAP undertook a thorough due diligence process. Following the completion of due diligence, the CAIP contribution agreement will be developed for each project meeting both the organization and project assessment.
CAIP provides support over a five-year period in the form of non-repayable contributions to a limited number of best-in-class accelerators and incubators. Maximum contributions to accelerators and incubators under the program are up to $5 million per year for each selected outstanding organization.
In January 2013, Prime Minister Harper announced the Venture Capital Action Plan, a comprehensive strategy for deploying $400 million in new capital over the next seven to ten years, which is expected to attract close to $1 billion in new private sector investments. Economic Action Plan 2013 announced $60 million in funding over five years "to help outstanding incubator and accelerator organizations expand their services to entrepreneurs". An additional $40 million was committed in Economic Action Plan 2014 to promising accelerator and incubator organizations to help entrepreneurs for a total of $100 million.
