Meet Dave, owner of Calgary-based technology services company TechCo Inc. TechCo has seen a successful first year, has hired a handful of developers, and is funding some initial sales and marketing. The business is burning cash invested by Dave’s personal relationships and a few angel investors, but now Dave needs to grow. He has developed a prototype for a new AR app and is struggling to finance its commercialization. Dave needs growth finance to fund the expansion of his product line and to cover heightened operating costs. He sees applications for his technology with everyone he meets. He needs more people, he needs more marketing resources, and he needs more committed customers.
If you are someone just like Dave, who needs more financing to reach your next business goal, you need to understand the funding options available to you. Below are a few emerging funding options for near start-up tech companies:
Alberta Investor Tax Credit Initiative
The Government of Alberta provides tax incentives for investors to fund qualified small businesses in the tech sector. Beginning in January 2017, investors who provide equity capital to eligible businesses involved in researching, developing, or commercializing new technology, or engaging in interactive digital media development, video post-production, digital animation, or tourism will receive a 30% tax credit. Roughly $20 million in funding is still available for qualifying businesses for the remainder of fiscal 2018/19. Head here for more information.
Opportunity Calgary Investment Fund
The City of Calgary has made it a priority to invest in local businesses and lessen the effects of the most recent economic downturn. The $100 million Opportunity Calgary Investment Fund (OCIF) was developed to grow the local economy and encourage innovation. The funds are available for private sector companies, non-profits, and public institutions alike, and eligible applicants can receive up to half of the entire project budget. Visit here for more information or to apply.
Publicly-funded Third Party Funds
Many fund sources exist to bridge the capital gap for small businesses that may not be ready for venture capital. The following are government-sponsored groups that provide funding, advice and resources:
The Accelerate Fund
This fund provides early-stage growth financing to small businesses in Alberta’s technology sector with the goal of diversifying the province’s economy. Accelerate Fund II is currently seeking qualifying companies for up to $10 million in funding. For more information, visit here.
Emissions Reduction Alberta (ERA)’s BEST Challenge
This challenge introduced by ERA will award $100 million to projects in biotechnology, electricity and sustainable transportation which aim to reduce greenhouse gases. It is estimated the projects will culminate in a reduction of 2.5 million tonnes of CO2 by 2030. To read more, visit here.
Alberta Innovates
Alberta Innovates is a provincially-funded corporation which invests in health innovations, the bio sector, and clean energy. It has invested millions of dollars into Alberta-based research and technology development with a focus on diversifying Alberta’s economy, improving Alberta’s environmental performance, and enhancing the lives of Albertans through research and innovation. Visit here.
At Whitehorn, we sincerely hope that small business owners like yourself will succeed according to your game plan. We understand the challenges of start-up entrepreneurs, especially when you have an innovative product in the pipes but are struggling to raise capital. We hope the provided information and references will assist you in overcoming these entrepreneurial obstacles, taking you one step closer to realizing your aspirations. We welcome the opportunity to stay in touch with you along your fundraising journey and when your business has reached commercial success, we would be happy to discuss our services and the ways in which we can assist in taking your business to the next level.
