Alternative sources of funding for start-ups

A condensed list of different sources of funding opportunities for entrepreneurs within the Hamilton-Halton region

Let’s be honest – raising capital for a start-up is challenging. Whether you’re navigating economic downturns and shifting market trends or somehow meeting the right investor and convincing them to hear your pitch are just a few of the hurdles founders might face when fundraising.

But here’s the good news – the Hamilton-Halton region is packed with resources and funding options designed to help your innovative start-up.

From pitch competitions to grants and investment opportunities, we’ve put together a short guide on some alternative sources of funding that could help you get to the next level.

Pitch Competitions

Pitch competitions offer start-ups a unique chance for founders to refine their skills, gain mentorship, and connect with potential investors. Here’s a quick look at three key competitions within the Hamilton-Halton ecosystem offered by Innovation Factory (iF):

1. LiONS LAIR: LiONS LAIR invites the top 10 start-ups from the Founders Fast Track program to pitch for cash prizes. Participants benefit from training, mentorship, and networking, culminating in a gala before 350+ attendees. 

2. Synapse Life Science Pitch Competition: The Synapse Pitch Competition is Ontario’s premier life science pitch competition. It connects life science start-ups with resources, and accelerates their commercialization journey. The top finalists pitch to a panel of judges and compete for cash and in-kind prizes at a showcase event attended by over 200+ people from the region’s life science ecosystem. 
3. New Venture Pitch Challenge: This early-stage pitch training program is designed for entrepreneurs who might not be ready for mainstream pitch competitions. With coaching to help start-ups perfect a 5-minute pitch, the top 5 participants have the opportunity to pitch to angel investors.

Organizations with funding opportunities:

Business accelerators and government agencies provide crucial support and resources for your start-up and scaling companies. Some offer targeted grant programs that could give you the financial boost needed to achieve important milestones. Here are a few organizations that offer funding opportunities among other resources:

1. Innovation Factory (iF): As a not-for-profit business accelerator, iF offers one-on-one support to innovative start-up and scaling companies, across sectors ranging from advanced manufacturing to life sciences. If you’re looking for sources of funding in life sciences, iF also offers grant programs to support health-tech companies including:
   • HEALTHI (Hamilton Ecosystem to Accelerate and Leverage Trials of Health Innovation): Innovators can leverage up to $15,000 to work with the Research Administration groups of world-class hospital facilities to create the pre-trial protocols and documents required to undertake a commercialization project or clinical trial; 
   • SOPHIE (Southern Ontario Pharmaceutical and Health Innovation Ecosystem): Provides up to $100,000 in matching funds to work on a collaborative commercialization project with a research hospital or academic institution in Ontario’s life science ecosystem,
   • CAMEDA (Canadian MedTechAlliance): Up to $100,000 in matching funds to collaborate directly with a contract development and manufacturing organization to help build their manufacturing capacity in Canada.

2. The Ontario Centre of Innovation (OCI): OCI facilitates partnerships between academia and industry to commercialize research, focusing on ‘Made-in-Ontario’ technologies. OCI offers various business grant opportunities and funding through programs like the Ontario Vehicle Innovation Network (OVIN), that helps support automotive tech and mobility solution innovations.

3. The Ontario Bioscience Innovation Organization (OBIO): OBIO supports the bioscience and healthtech sectors with strategy, policy, and programs in capital advisory, talent development, and commercialization. OBIO offers a range of programs and funding opportunities to innovators including the OBIO Investment Summit, Early Adopter Health Network (EAHN™) and more to its members. 

4. Mitacs: The organization partners with academia, industry, and government to fund research and innovation. Programs include Mitacs Accelerate and the Business Strategy Internship.

5. The National Research Council (NRC): NRC provides advice, connections, and funding through programs like NRC IRAP, Youth Employment Program, and Outreach Initiative grants.

6. The Next Generation Manufacturing Canada (NGen): NGen focuses on advanced manufacturing technologies like IoT, machine learning, and 3D printing, while promoting the “Made-in-Canada” brand. The organization offers funding opportunities like Sustainable Manufacturing Challenge and Advanced Manufacturing Homebuilding Challenge. 

7. Sustainable Development Technology Canada (SDTC): SDTC offers seed funding, providing $50,000-$100,000 for early-stage cleantech companies. The SDTC team leverages their wide network from the public and private innovation sector to help fund, and collaborate with founders, bringing new technologies to market. 

Loans, Tax and SR&ED services

Accessing loans, working with tax capital and taking advantage of Scientific Research and Experimental Development (SR&ED) tax credit are other sources of funding that can support your start-up. These options can provide much-needed capital while supporting innovation and growth. Below is a list of organizations who could help you access cash flow, invest in R&D, and fuel your expansion efforts:

1. BDC: Offers entrepreneurs funding through grants and flexible loans, as well as business advisory services across many sectors. They also provide free resources, articles, and blogs to help start-ups navigate their journey.

2. Futurpreneur: Provides financing, mentorship, and collateral-free loans to aspiring business owners aged 18-39, with specialized programs for diverse entrepreneurs, including Indigenous and Black communities.

3. PARO: Supports women-owned businesses with free counseling, programs to help scale, character-based loans, and networking opportunities, aiming to drive companies to over $1 million in revenue.

4. BDO: Specializes in tax, accounting, and advisory services for start-ups, helping with everything from launching to raising capital and expanding internationally.

5. Explore Development Canada (EDC): EDC provides working capital guarantees up to $10 million and offers export-related services like PO Insurance, FX Facility Guarantee, and Buyer Financing, helping companies enter new markets.

6. Bonsai Growth: Advances up to 75% of SR&ED tax credits or government grants within 5-10 business days, enabling businesses to access funds faster and improve cash flow.

7. Engineva Research Solutions: Helps secure SR&ED tax refunds and government grants, having obtained over $50 million for Canadian companies, with a focus on SMEs and tech development.

Grant Identification

Grants are amazing! Issued by the government or a corporation, grants do not require repayment. However, finding and deciding which grant is right for your start-up can be overwhelming. Here’s a quick list of platforms that help identify and access grants for your business:

1. Pocketed: A platform that simplifies the process of finding and applying for government funding, allowing entrepreneurs to easily navigate complex grant programs and maximize funding opportunities.

2. Mentor Works: Specializes in helping Canadian small businesses discover and leverage government grants and loans. They also offer business consulting support to ensure companies get the most out of available funding.

3. Business Benefits Finder : A search engine that helps entrepreneurs find the right government programs and services to support their business growth.

Equity Investment

Equity investment can also be a great source of funding. Investors purchase stock of the start-up for a share of ownership, with the expectation that the stock may earn dividends or can be resold with a capital gain. Here are some options to explore for equity investment: 

1. FrontFundr: FrontFundr is an online private investing platform and an exempt market dealer. The organization provides Canadian start-ups with access to capital through investors to help bring their solutions to market. 

2. Equivesto: Equivesto provides a common meeting ground for private companies looking to raise capital and investors who believe in their potential. Companies can choose how to structure their offering, with control over the number of investors, which investors have access, minimum investment amount, share type, and much more.

Not sure where to start? Our Venture Growth Advisors can help you navigate these funding opportunities and find the right fit for your business.

If you are considering raising angel investment or venture capital funds, check out our blog post “Advice from an Investor: 3 Strategies to Navigate Funding Rounds,” featuring expert insights from David W. Wright, one of our Expert Advisors. If you’re ready to take the next step in fundraising private capital, consider joining our Investment Readiness program to access mentorship, tools, and templates to help you prepare your pitch, answer angel investor-type questions and for due diligence.

Interested in learning more about the funding opportunities? Connect with us today!