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.
Over the next five years, two Toronto organizations will receive funding through Canada Accelerator and Incubator Program (CAIP) to provide Canadian entrepreneurs with the resources and expertise needed to develop their business plans and seek follow-on financing.
- Ryerson University, in partnership with Simon Fraser University and the University of Ontario Institute of Technology, will receive up to $10.7 million in CAIP funding over the next five years to establish a national research-driven incubator network – the Zones of Incubation and Innovation (ZI²) to amplify the universities’ existing research and incubator facilities and to create an expansive ecosystem which will drive technology-enabled innovation, productivity and job creation. The Pan-Canadian project targets digital technology and gaming leveraging deep expertise at the partner institutions and will create soft landing support for Canadian companies going global and international companies investing in Canada.
- The Next 36 will receive up to $2.7M in CAIP funding over the next five years. The Next 36 operates a national accelerator and incubator program for Canada’s most promising young entrepreneurs. Through an unparalleled combination of mentorship, education and seed investment, it fast-tracks the development of Canada’s most talented innovators and supports the creation of industry-changing businesses that will grow Canada's long-term prosperity.
The one-time request for the proposals 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 and 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 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.
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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