Posted on Tuesday January 05, 2021

Starting a tech company: How to finance your innovation

Interested in starting your own business and being your own boss? Do you see yourself as the head of the next fintech or the person behind the innovation destined to make the whole world want to dine on crickets? Several programs can help you get there. In technological innovation, some funds even specialize in high-risk ventures.

Here’s an overview of the various assistance programs in place, some of which are sure to meet your needs. By using several types of financing, you’ll project the image of a dynamic entrepreneur, which should help you land even more funding.

Venture capital for building exceptional companies

What is venture capital? Venture capital is an investment used to finance high-risk business startups. Behind this capital are investors who believe in the growth potential of your high-tech company, whether active in biotechnology (health sector), clean-industrial technology (e.g., energy management), communications (e.g., big data), or another sector. Since investors will ask for a stake in the company in return, you’ll have to cede a portion of your ownership.

The Business Development Bank of Canada (BDC) offers this type of funding. It’s the most active venture capital investor in the country, with a large financial capacity. The BDC specializes in early-stage tech companies, and its initial investments can range from $250,000 to $3 million.

The New Brunswick Innovation Foundation (NBIF) offers a Venture Capital Fund (VCF). The VCF provides early-stage companies in the province with the capital needed to accelerate their growth. NBIF investments typically range from $200,000 to $500,000.

Other types of financing for starting up a company

For a startup company, this kind of financing serves as a springboard that will hopefully take it very far.

The BDC offers more than venture capital. Specialized in business development, it can lend you tens or even hundreds of thousands of dollars. These funds could help you purchase a franchise, cover startup costs, invest in marketing your products or improve your marketing strategy. The BDC offers a wide range of credit products adapted to your situation.  Futurpreneur Canada provides additional financing for those age 39 and under. Organizations such as Mitacs also support businesses, for example by subsidizing the hiring of interns to speed up innovation.

Business support at UNI

Helping local entrepreneurs is priority for UNI, and we offer a variety of financial products, including loans and lines of credit, to help you get your finances in order and start your project with peace of mind. A term loan is a flexible, effective tool for purchasing the equipment you need or improving the financial structure of your business. An operating line of credit, with terms of use and repayment adapted to your business, can meet your other needs by allowing you to finance the purchase of product inventory or build up working capital.

Business assistance programs: The role of governments

Our political leaders understand that it pays to support startup entrepreneurs. When it comes to supporting innovation and economic growth in Canada’s various regions, governments are stepping up to the plate.

Economic growth in Atlantic Canada

To help New Brunswick businesses get off the ground, the federal government has created a multitude of programs from which you could benefit. For example, you can get a startup guide and several tools to help you build a strong business. Several funds are also available through the Atlantic Canada Opportunities Agency, including the Business Development Program (BDP) and the Atlantic Innovation Fund (AIF). The BDP was created to help you start, expand or modernize your business. For SMEs and co-operatives, the capital is repayable without interest. The AIF is for larger projects. Its contributions, ranging from $500,000 to $3 million, are repayable with conditions based on the commercial success of the project. In both cases, contributions made to non-profit organizations do not have to be repaid.

Contributions from provincial and local governments

The Government of New Brunswick provides all residents with the information they need to start a business in the province. Beyond this initial information, OpportunitiesNB can offer you adapted support, for example by pairing you with a mentor and providing personalized advice to guide you for several months. They have a strong presence in tech sectors, particularly in finance, cybersecurity and digital health. At the local level, be sure to contact your CBDC to find out about programs that can help you.

How to attract private investors

To turn investors’ heads, your company has to be able to prove that it’s responding to a demand and has a solid business plan complete with supporting market surveys. Make sure you have all the relevant documents on hand and prepare your presentation well. Make sure you know your data inside out, and try to relax, so you can better communicate your passion for your project.

Above all, what you want is a good partnership. Your investors should be able to give you access to a valuable business network and provide you with expertise that complements that of your team. Look for investors who have relevant experience and whose knowledge will be useful to your business. If their vision gels with yours, you’re in business.

Ready to get off to a good start? Make an appointment now with one of our advisors by calling 1-855-842-2511.