In 2013, the Government of Canada allocated $60 million over five years through the Economic Action Plan, with an additional $40 million in 2014, to help outstanding incubators and accelerators expand their services to small- and medium- sized businesses.
Invest Ottawa, in collaboration with Wesley Clover and PARTEQ Innovations, will receive up to $7.7 million in CAIP funding over the next five years to provide local entrepreneurs with the resources and expertise needed to develop their business plan and seek follow-on financing.
The objective of the collaboration is to build an integrated incubation and acceleration program, which will provide high potential SMEs from Eastern Ontario with a graduated pathway to market. The collaborative effort involves the participation of the following organizations:
Invest Ottawa, the project lead, is responsible for managing the relationship among the partners organizations. Invest Ottawa delivers collaborative economic development programs and initiatives that increase entrepreneurial momentum, wealth and jobs in the City of Ottawa and its surrounding region, while marketing Ottawa's diversified economy and high quality of life.
Wesley Clover International, an investment management firm and holding company with active interests in Information and Communications Technologies, is a serial Super Angel, starting companies by providing seed, early stage and follow-on financing. The company works directly with these start-ups to guide, mentor and remain actively involved as the companies reach a level of maturity to operate as self-sufficient businesses.
PARTEQ Innovations manages the technology transfer activities at Queen's University and has deep expertise in technology assessment and market analysis, intellectual property protection and management, and raising of capital. PARTEQ Innovations is located at Queen's Innovation Park, a physical hub for dynamic interfaces between Queen's University, industry, not-for-profit partners and government. This innovation ecosystem helps support the development and growth of entrepreneurs, start-ups and SMEs in the region.
L-Spark is an Ottawa-based incubator–accelerator supporting the enterprise software market. It provides entrepreneurs and startups with access to industry mentors, venture capital firms and angel investors to support a startup ecosystem in the region. CAIP funding to Invest Ottawa and partners is a substantial factor in the creation of L-SPARK.
Accepted Eastern Ontario entrepreneurs will receive mentorship support and be engaged into an incubation and/or initial acceleration phase. Support will be provided and delivered primarily in Ottawa, at Invest Ottawa's facilities, and in Kingston, at the Queen's University's Innovation Park facilities. Graduating entrepreneurs with their SMEs will be eligible to enter the L-SPARK accelerator program, which will be hosted at the L-SPARK facility in the Kanata Research Park (KRP) campus.
All this will be done on a competitive basis ensuring that the best ideas and those teams of entrepreneurial individuals, who have the necessary skills and plans, can be guided to be funded by various investors.
The one-time request for the proposal process for the Canada Accelerator and Incubator Program was launched on September 23, 2013. It 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 of Canada'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.
Delivered by NRC-IRAP, 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. Recipients will be required to demonstrate matching contributions on at least a 1:1 basis during the period of the contribution funding.
Maximum contributions to accelerators and incubators under the program are up to $5 million per year for each selected outstanding organization.
Accelerator: Typically for-profit organizations owned and operated by venture capital investors, who intend to generate returns from equity-based investments in their client firms. Accelerators provide a range of services to early-stage firms, including financial support, business advice, office and development space and complementary services offered by partner organizations.
Incubator: Typically not-for-profit organizations that offer similar services to accelerators but tend to provide longer tenure for participating firms and a broader suite of services in terms of physical space and mentorship. Incubators are often sponsored by universities, colleges and economic development corporations.
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