Sources

The color of money

Money comes in three basic colors: GREEN, GOLD and RED. Green money comes from patient, equity-oriented investors including private, institutional and even public investors. It is green because it allows companies to grow and prosper without being impeded by repayment obligations. Gold money is as good as gold. It comes from government and quasi-government organizations that are part of the infra-structure support system paid for by our tax dollars. Usually this money is in the form of grants, interest-free loans, and other forms of assistance. Red money comes from debt-oriented lenders. This includes banks, factoring houses, leasing companies, and other lenders. It is red because this is the color lenders see when the debt is not serviced.

The recommended approach for startups is to start with angel investors after family sources have been exhausted. It would be a stretch, although not impossible, to approach institutional investors at the outset.

NOTE: The organizations listed here have a British Columbia (and perhaps Canada) focus. Most of them are based in Vancouver, B.C.

GREEN MONEY SOURCES – Equity Capital

ANGEL INVESTORS
Canadian National Angel Capital Association & BC Networks
www.nacocanada.com (Canada)
www.vantec.ca (BC)
www.angelforum.org (BC)
www.keiretsuforum.com (NorthWest)
www.bellinghamangelinvestors.com

Active Impact Investments, led by Mike Winterfield, favours early stage investments in companies that are purpose-driven and that will make a social impact.

Amplitude Venture Capitalled by Life Sciences investor Nancy Harrison, “are savvy investors and proven company builders who, at the core, are driven to bring the best healthcare innovations to market to help improve the lives of patients one patient at a time.”

Arcadea Group is a new (2021) investment firm that aims to buy control stakes in “ultra-high quality, lower mid-market software businesses with between US$4M and US$20M in annualized revenue and growing by 10 to 70% a year” according to Daniel Eisen, one of the co-founders. This might be a good financing option for those entrepreneurs who are willing to give up control for some liquidity now and later.

Archangel Network of Funds consists of a group of funds founded by a collection of Canadian “superangels” and venture capitalists from the Toronto-Waterloo corridor. Archangel currently serves as the shared back office for three angel funds: Adrenaline, Axion and StarForge—each of which has a different thesis and set of general and limited partners. Collectively, these three funds have raised $10 million (as of Apr 2021).

Arctern Ventures, Toronto, is keen on climate change and sustainability. The founders are former entrepreneurs themselves.

AngelList is an American organization (works for Canadians, too) that connects companies with investors. It also helps entrepreneurs with finding employees.

Atrium Ventures is a Kelowna based VCC that invests up to $200K in B.C. based startups.

Bellingham Angel Investors is a group of 50 angel investors in Bellingham, WA. Although U.S. based, they are very active in the Vancouver area and have made numerous investments in Canadian companies.

Backbone Angels was formed (March 2021) largely by female Shopify employees who became millionaires and decided to form a collective to invest in women and non-binary founders with a focus on investments in Black, Indigenous, and Women of Colour-led companies.

Banyan Capital Partners Invests in or buys middle-market companies located primarily in western Canada and northwestern US.

BMO Capital Corporation provides individually structured short-term & long-term investments for later stage, more mature companies.

BC Angel Forum Introduces emerging companies to private equity angel investors & venture capital.

BC Discovery Fund Inc. A venture capital fund that invests in BC’s emerging technology industry. As at November 30, 2020, the Fund held investments in just five portfolio companies and in June, 2020 the Fund’s shareholders approved a wind-up of the Fund – so forget about applying here.

BC Venture Capital Tax CreditsThe British Columbia government provides a 30% REFUNDABLE Tax Credit to angel investors who invest in BC-based eligible companies. Entrepreneurs should apply for eligibility so that it will be easier for them to raise capital from angel investors.

Brightspark Capital’s mandate was, and remains, to find the best early-stage VC investments in Canada and help build value in these businesses. As the market evolved, we saw an opportunity to disrupt one of the most traditional industries out there: our own. With tech and entrepreneurship at our core, our ambition remains to be the leading VC/fintech hybrid.

Business Development Bank of Canada (BDC) Provides Canadian small and medium sized businesses with flexible financing, venture capital & affordable consulting services. BDC is very small business friendly. They provide low-cost loans, equity and are very active. Their TV ads state that they cater exclusively to entrepreneurs.

Carrot Ventures is a $15M new (May2020) AgTech Fund that is focused on creating new startups in the Agriculture sector to commercialize new technologies. 

Chrysalix Energy Venture Capital is a Vancouver-based VC fund (>$100M) that invests globally in companies commercializing energy related technologies.

Cindicates is an active Victoria based VCC, led by James DeGreef,  that invests across BC in startup ventures.

Conation Capital Corp – is an investment holding company that seeks out early stage blue sky opportunities in all industries. They’re not well known and there’s not much info on their website.

CROWDFUNDING – Since about 2015, government regulators have started allowing companies to raise capital from smaller investors without having to prepare a prospectus. While this is still “messy” and fraught with many issues (such as liquidity), crowdfunding does offer new venues for entrepreneurs to tap into the hitherto-untapped capital held by Joe Public. In Vancouver, the go-to crowdfunding portal is FrontFundr. For non-equity crowdfunding (ie. product pre-sales), the go-to sites are: Kickstarter and Indiegogo. A few other crowdfunding related sites that may be of use to you are: Circleup and AngelList.

CSE (Canadian Securities Exchange) A stock exchange for trading the equity securities of emerging companies. The CSE’s slogan is “We are the Exchange for Entrepreneurs”. This is great for companies that want to attract many investors and grow rapidly.

Diagram is  a new (2017) venture launchpad for Canada’s most exciting startup entrepreneurs in financial, insurance and healthcare technology, closed a $25-million fund (2017). Based in Montreal and Toronto, Diagram is looking to attract the most talented Canadian entrepreneurs to build great global companies.

Discovery Capital Corporation A venture capital firm whose focus is the enhancement of BC-based technology ventures, in areas of information technology, communications, health & life sciences and environmental & energy technologies. This VC is related to BC Discovery Fund and is also not overly active.

E-Fund is an angel fund associated with VANTEC. It was founded with the goal to achieve consistently higher returns and more exits from angel investments. By investing via teams, E-Fund can do more due diligence, leverage the industry expertise of its investors and provide post investment advice to its companies.

Fort Capital provides advisory services to growing companies and helps them access capital.

FrontFundr Vancouver’s crowdfunding platform. (see above under CrowdFunding)

Front Row Ventures bills itself as Canada’s first student-run venture capital fund. They invest in student founders mostly in Ontario and Quebec. Their partner is Real Ventures in Toronto. Note – they offer courses on Venture Capital 101 – see their website.

Futurpreneur offers financing and mentoring to black entrepreneurs, young business owners and others.

Good News Ventures is an industry agnostic, pre-seed / seed stage ICT venture capital fund based in Toronto, Canada. They focus on startups based in North America or serving the North American market with interesting business models including SaaS, enterprise/SMB, B2B / B2B2C, and crypto. They invest in companies in all software categories including AI/ML, IoT, infrastructure, blockchain and quantum computing.

Greensoil Proptech Ventures is building a broad network of relationships with PropTech entrepreneurs to identify companies offering solutions to the real estate sector that are both unique and compelling. In most cases, they pilot the technology offered by a prospective portfolio company with one of their Limited Partners. Even if the company isn’t a fit for their fund, or isn’t raising capital, they often can provide valuable referrals or assistance – helpful for both the PropTech company and their real estate partners.

GrowthWorks Manages and grows venture capital funds such as the Working Opportunity Fund. A main focus is growth-oriented companies involved in information technology, life sciences and advanced manufacturing.  Growthworks has been taken over by Pender Funds.

Haro Ventures, led by James deGreef, invests in seed stage companies,particularly high potential, high growth software companies.

Imperial Yellow Ventures invests in, develops and markets digital products and services for the yoga, meditation and wellness industries.

Inovia Capital, raised US$450 million (March 2021) for its second growth stage fund as the Montréal-based venture firm aims to build on its success with Lightspeed and create more Canadian unicorns. The new fund exceeds Inovia’s target raise of $400 million and brings the firm’s total capital under management to more than $1.5 billion USD.

Inwest Ventures invests in people first, partnering with the best of the best, connecting their ideas and placing them in a frictionless environment of innovative business builders and proven resources as a springboard into the North American market. Their Cultivator is where they spark new ideas, perform proof of concept, and provide integrated operational support to Entrepreneurs as they get their companies to market.

Kensington Venture Capital has been an active investor in venture capital since the launch of the firm in 1996, with strong links into Silicon Valley and across Canada. Kensington is currently investing from two active venture capital funds: the Kensington Venture Fund and the BC Tech Fund. In addition, the Kensington Private Equity Fund includes venture capital investments as part of its strategy.

Keirestsu Forum A Pacific Northwest & International angel network. Keiretsu also has its own angel fund. Keiretsu is ideal for entrepreneurs that are just beyond the startup stage. Keiretsu members as a group have funded companies that need lesss then $1 million to as much as $20 million.

Keiretsu Capital, affililated with the Keiretsu Forum, is a Seattle-based fund formed by Angel investors that invests cross-border in many Canadian start-ups. It is one of the most active angel funds.

Lumira Ventures invests in Biotechnology, medical technologies, digital health and consumer healthcare solutions. They focus on companies whose products offer transformative (not incremental) improvements to patient health outcomes, and the promise of dramatic reductions in the cost of healthcare delivery.

Mavan Capital Partners in Kelowna  has 3 active technology focused funds in the private capital market, for example their Venture Capital Corporation (VCC) offering.  Their portfolio companies are spanning across various sub-sectors including social awareness, non-profit funding, the genetics industry and even a school communication platform.

Maverix Private Equity, Toronto-based and led by John Ruffolo, has recently (2021) raised US$500M to invest in technology-enabled growth and disruption ventures.

Mindset Ventures, led by Alison Lawton, invests in early-stage companies that have rapid growth potential in a variety of B2B and B2C industries including SaaS, fintech, healthtech, and consumer product & services businesses. The focus is on companies that are located in Canada and the US and are raising a Seed or Series A with a valuation up to USD $15,000,000. They look for high-growth companies that have the potential to quickly scale and realize an exit opportunity within 7-10 years. Their typical investment size ranges from $100,000 to $500,000 and they prefer to participate alongside a lead investor. 

NACO Canada is a national organisation that promotes angel investing via angel groups and networks across Canada. While NACO itself does not make investments, they are a go-to website for information on how to find angel groups. They also have a lot of resource materials to help both investors and entrepreneurs make better decisions.

New Ventures BC Competition A competition for anyone with a new technology idea, who wants to turn the idea into a profitable company.The first prize is worth over $100,000. BUT – the main benefit here is that New Ventures connects entrepreneurs with mentors AND investors. It is a must see.

NGIF Cleantech Ventures is a new (Apr 2021) $35M fund backed by 7 leading Canadian gas companies to invest in startups developing clean technologies applicable to the gas industry.

Nimbus Synergies is an early stage investor in life sciences companies in B.C. looking for pre-seed through Series A funding. Drug and Class III devices are excluded. Nimbus acts as a lead for many investments. Funding is provided by Discovery Parks.

OKR Financial provides non-dilutive financing for SME’s using their federal and provincial R&D grants such as SR&ED tax credits, BCIP and IRAP funding as collateral, just to mention a few. They also do equity financing for emerging growth companies and turnarounds.

OMERS Ventures (Toronto), is one of Canada’s leading venture capital companies. As part of the private equity family at OMERS, they support companies at all stages of their development with specialized teams focused on private equity, growth equity and venture.

Pangaea Ventures Ltd. Invests in early-stage, clean-tech and advanced materials companies with world-class innovation. Quite active.

PenderFund Capital Management Invests in undervalued technology companies with the potential for significant capital appreciation. They have a number of different funds. These invest mostly in companies that are past the startup stages.

Quark Venture, established in 2015, Quark Venture LP is a venture capital investment firm, headquartered in Vancouver, Canada, and is focused on equity financing of innovative biotechnology and health sciences companies with breakthrough technology platforms and projects.

Raven Indigenous Capital Partners is an indigenous-led and owned V.C. established in Vancouver in 2018. According to co-founder, Jeff Cyr, “we need firms like Raven to prioritize indigenous economic empowerment.” Raven partners with Indigenous enterprises and social purpose organizations by providing access to capital.

RBC Venture Partners Invests in later-stage companies developing software and technology for the financial services industry.

Real VenturesEstablished in 2007, the firm backs early-stage Canada-based founders building innovative tech companies that will have large-scale positive impacts on society. The firm also helps entrepreneurs to realize the full potential of their companies by providing them with the guidance, stage-specific help and communities required to develop the self-awareness and operational capabilities for global success. Real has invested in over 280 companies across five funds, with $330 million under management.

Relentless Pursuit Partners and its Relentless Venture Fund is an early stage fund dedicated to investing in preventative and proactive technology solutions that optimize health, activity and longevity. It is headed up by Brenda Irwin, formerly a life sciences VC at Canada’s BDC.

Rhino Ventures (formerly Vancouver Founder Fund), led by Fraser Hall, invests in seed stage technology companies in Western Canada in the $1M to $3M range from Seed to Series A. Their motto is “By Founders. For Founders”.

Rhiza Capital is co-owned by Community Futures Sunshine CoastSunshine Coast Credit Union and Powell River Community Investment Corporation. Rhiza’s mission is to mobilize capital urgently needed to achieve the UN Sustainable Development Goals by 2030. Their thesis is that companies created to solve the worlds problems have a higher chance for impact and financial success.

Roynat Capital Provides patient financing solutions, including term debt, leasing, subordinated debt, mezzanine financing and equity, to companies with revenues between $2 million and $50 million.

ScaleUp Ventures is a new fund (2017) based mainly in Ontario but with an national orientation.

Slack Fund is a fairly new fund based mainly in the Valley but with an office in Vancouver’s Yaletown. Slack launched the $80 Million VC Fund in partnership with Accel, Index Ventures, KPCB, Social Capital, Andreessen Horowitz, and Spark Capital back in approximately December 2015, and backs new companies that bring more streamlined workflows to Slack—reducing the small, yet high-frequency tasks that consume chunks of users time.

TELUS Ventures Invests in the telecommunications sector, with a focus on exploiting the convergence of voice, enhanced data, digital media & wireless.

TIMIA Capital Corp.  TIMIA is a very active investor in growing SaaS companies by taking a non-dilutive interest in future revenues. This is a great follow-on to an angel round without having any angels suffer dilution as their investees start to grow in revenue.

TMX Group (TSX Venture Exchange) Provides access to capital for companies at the early stages of their growth.

Vancouver Angel Technology Network (VANTEC) Introduces early stage investors and mentors to promising technology (i.e. all technology fields) ventures mainly in British Columbia.

Vanedge Capital is a Vancouver based early-stage venture capital fund investing in technology inflection points in cloud computing, artificial intelligence, cyber security, SaaS and digital media. Vanedge has over $250 million in assets under management.

Ventures West is no more. They are listed here only because their name still comes up occasionally. They were one of the first, if not the first, major tech VC firms in BC and have made major contributions to the BC technology industry and literally dozens of major BC tech companies, since its original founding in 1972-1973. The firm wound down in 2013.

Version One Ventures is headed up by Boris Wertz and is managing its second $35M fund. They like to be “first money in” and are seeking innovators who are taking a fresh approach to solve important and difficult problems who “leverage network effects” to build a defensible product.

Women’s Equity Lab provides an entry point for women to engage in early stage investing.

Working Opportunity Fund (GrowthWorks) Invests in small and medium-sized Canadian businesses with high growth potential; covers most industries.

WUTIF Capital (VCC) Inc., led by Mike Volker, is an angel fund that co-invests with angel investors in promising new technology ventures in BC. WUTIF = Western Universities Technology Innovation Fund. WUTIF has invested in over 100 companies since 2004 and has done 50 investments since 2018. WUTIF is a provincially-registered VCC and, as such, can provide its BC-based investors with a 30% refundable tax credit.

Yaletown Venture Partners Invests in early-stage companies in Canada and the US Pacific Northwest; focus is cleantech and information technologies.

500StartUps invests in hundreds of startups all over the globe. In 2016, they launched a Canadian $30M Fund. They are like a large angel fund. They are based primarily in Montreal and Calgary but are keen to look at seed deals across Canada. There was a bit of a scandal involving one of the principals but that has blown over.

GOLD MONEY SOURCES – Subsidies & Grants

The MOST POPULAR sources of Government support for entrepreneurs are:

  • NRC IRAP – Industrial Research Assistance Program
  • SRED – Scientific Research and Experimental Tax Credits

The Canadian Government, through NRC, offers a Concierge Service whereby an advisor can help entrepreneurs navigate through the myriad of government support services.

BC Innovation Council Re-branded to Innovate BC. This is a provincial one-stop service agency for entrepreneurs.

BCIC Ignite Program, launched in 2016 provides grants up to $300K to companies working collaboratively with research institutions.

Business Scale-up and Productivity (BSP) Once a start-up company is on its feet and needs to develop to the next stage, what next? That’s where the program comes in. BSP supports high-growth Western Canadian firms that are scaling up and producing innovative goods, services or technologies through interest-free repayable funding.

Canada Foundation for Innovation Funds up to 40 per cent of a project’s infrastructure costs (e.g. state-of-the-art equipment, buildings, laboratories, and databases); focus is Canadian universities, colleges, research hospitals and non-profit research institutions.

Canadian Institutes of Health Research Supports the work of health sciences researchers and trainees in universities, teaching hospitals and research institutes across Canada.

CANARIE Inc. An advanced-network organization that facilitates the development and use of its network, as well as the advanced products, applications and services that run it.

Export support programsCanadian Commercial Corporation and Export Development Canada
CCC: gives Canadian businesses access to international opportunities
EDC: provides financing, insurance and bonding solutions to Canadian companies that export goods & services, or invest in other countries.

GenomeBC I2 Fund provides commercialization support for companies developing innovative life science technologies in British Columbia (BC). Life sciences includes the biological aspects of industry challenges in the key economic sectors of Agriculture, Energy and Mining, Environment, Fisheries and Aquaculture, Forestry, and Human Health. The I2 Fund will also support digital health and other technologies that will further move the concept of precision medicine into clinical practice. The I2 funding is repayable and is allocated to promising technologies (products, processes or services) at the early stages of commercial development. The Fund aims to provide risk capital that is concurrently matched by other public or private funding sources (eg angels).

Human Resources and Social Development Canada Offers programs that help prepare individuals for employment-transitions.

Industry Canada (Canada Small Business Financing Program) CSBF Program encourages financial institutions to make their financing available to small businesses by reimbursing 85% of lender’s losses in event of default.

Innovate BC Funding  Innovate BC, formerly the BC Innovation Council, helps startups with various funding initiatives.

Innovate BC Tech Co-Op Grant Get up to $10,800 per year in funding to hire co-op students through the Tech Co-op Grant.

Michael Smith Foundation for Health Research Innovation to Commercialization (I2C) Program provides funding support for translational researchers in the health and health services sectors — to advance their discoveries or inventions towards commercialization resulting in products or technologies that improve health outcomes, and enrich the health innovation ecosystem of BC.

MITACS works with 60 universities, thousands of companies, and both federal and provincial governments to build partnerships that support industrial and social innovation in Canada. They have various programs to support entrepreneurs, e.g. student interns, project funding, etc.

National Research Council’s IRAP Program (BC & Yukon) Helps Canadian companies by jointly funding collaborative R&D projects with university scientists and engineers, as well as by supporting the training of scientists and engineers.

Precarn Incorporated Funds and coordinates collaborative research conducted by industry, university and government researchers.

Scientific Research & Experimental Development (SR & ED) Tax Incentive Program (Click on A to Z index; then choose letter S in Topics for Business box.)
A federal tax incentive program to encourage Canadian businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada.

Western Economic Diversification Helps small businesses acquire the information, training, business advisory services & capital they need to succeed. The WINN program is a $100 million five-year federal initiative that offers repayable contributions for small and medium-sized enterprises (SMEs) with operations in Western Canada, in order to help move their new and innovative technologies from the later stages of research and development to the marketplace.

RED MONEY SOURCES- Debt Capital

Customers & suppliers – These are among the best and easiest financing options. Getting supplier credit and up-front advances from customers can go a long way in addressing cash flow needs. Don’t be shy. Ask!

Bank of Montreal For business accounts, loans and other types of assistance.

Bond Capital Provides mezzanine debt and equity to small and medium-sized enterprises in Western Canada and the USA.

Business Development Bank Provides small and medium-sized enterprises with financing, venture capital, and consulting services.

CIBC Offers financial products and services for both start-up and established businesses.

Export Development Canada Provides Canadian exporters with financing, insurance and bonding services, as well as foreign market expertise.

Futurpreneur Canada provides start-up mentoring, financing and business resources to young Canadians (18 to 34 years old) who want to create their own successful businesses.

The Interface Financial Group Provides affordable funding for small business through a version of factoring known as “invoice discounting”.

Liquid Capital Corp Provides working capital from $10,000 to $10 Million and manages credit and accounts receivable for Canadian and US companies.

Northstar Trade Finance Inc. Supports Canadian exporters by offering financing to credit-worthy buyers of eligible Canadian goods and services.

Pyx Financial Group Inc. Provides funds and manages accounts receivables for companies in Canada and the US.

Royal Bank of Canada Offers numerous services and financing options to businesses.

Roynat Capital A source of term debt, leasing, subordinated debt and other financial solutions for firms with revenues between $2 million and $50 million.

Tallinn Capital Corp. (formerly North Point Capital Corp.) Provides equity, convertible debt and subordinated debt to established mid-market operating companies.

TD Bank Financial Group Offers a full range of financial products and services.

Vancity Capital Provides growth capital to fast-growing small-to-medium-sized organizations based in BC.

Western Economic Diversification Canada Supports the creation and growth of knowledge-based clusters (life-sciences, information & communication technology, and other technologies); collaborates with other levels of government and organizations to support entrepreneurship.

Women’s Enterprise Centre Helps women start and grow businesses in BC; provides essential business services, resources, and referrals to other business service-providers.

Canadian Western Bank Specializes in mid-market commercial business banking and offers a broad range highly personalized services through our 41 branch locations across Western Canada.

Liquid Capital Pacific Corporation Provides working capital from $10,000 to $10Million and manages credit and accounts receivable for Canadian and US companies.

OTHER INFORMATION

AlbertaVenture Magazine Web site is a good source of up-too-date information on Alberta industries; contains industry reports, information on events, new trends, success strategies, etc.

AngelBlog Site devoted to the development of best practices for angel investors and entrepreneurs, so their interactions can be profitable, fair and enjoyable.

BC Ministry of Small Business, Technology and Economic Development For information, reports and web links relating to activities undertaken on behalf of BC businesses.

Canada’s Venture Capital & Private Equity Association (CVCA) Represents most of Canada’s private equity companies; members provide venture capital, buyout and/or mezzanine investment.

Canadian Financing Forum Matches North American corporate and VC investors with serious entrepreneurs looking to build world-class technology companies.

Community of Science (COS) Provides information critical to scientific research and other projects across all disciplines; e.g. funding sources, research activities, publications, patents, new positions, etc.

eBusiness Connection (eBC) Offers e-business information and services to help BC businesses remain competitive in an online market.

High Technology in British Columbia A gateway to web sites that provide support, information, advice and other assistance to BC investors, entrepreneurs, technology-based companies and science, technology and engineering students.

Industry Canada A source of business support services, re financing, innovation, research, science & technology, intellectual property, trade, investment, economic and market research/statistics, etc.

National Angel Capital Organization (NACO) Industry association for Angels; dedicated to promoting best practices and connectivity in relation to innovation and early-stage capital formation in Canada.

National Venture Capital Association (USA) A trade association that represents the US venture capital industry; also of some interest to Canadians.

New Ventures BC Competition A competition for anyone with a new technology idea, who wants to turn the idea into a profitable company; prize pool worth over $100,000.

Simon Fraser University Innovation Office Facilitates the creation of university-industry R&D partnerships and the commercialization of SFU-based research results.

Small Business BC Connects small companies and entrepreneurs to BC business resources and websites.

Stock exchanges – TSX Group (Toronto), NASDAQ, OTC Bulletin Board – Stock exchanges allow the public to invest in companies; listing rules and criteria vary; best to find a ‘sponsoring’ broker or underwriter.

Thomson Financial An information source on Canadian venture capital and private equity markets.

T-Net Provides information and business services to technology companies, industry suppliers and individuals in the BC technology industry, which helps them achieve their full potential.

University of British Columbia (University-Industry Liaison Office) Facilitates the exchange of knowledge between UBC, its affiliated hospitals, industry and the wider community.

Vancouver Enterprise Forum (VEF) A networking forum for technology entrepreneurs.

Did we leave you out? No matter what color your money is, you should be on the list. To get added, send an email.