The federal government has announced another step in implementing its Venture Capital Action Plan (the "Plan"): new funding for "best-in-class" incubator and accelerator programs. The Plan was launched by the federal government in January 2013 and is a $400 million strategy aimed at increasing private sector venture capital investments in Canada. Over five years, $60 million is available to help "high-potential" incubator and accelerator firms grow their services and make them available to "worthy" entrepreneurs.
The federal government has released a Request for Proposals through the National Research Council of Canada's Industrial Research Assistance Program ("NRC-IRAP") under the Canada Accelerator and Incubator Program ("CAIP") 1. The proposals are due on October 30, 2013. Selection for funding is based on supporting new, incremental activities at outstanding high-potential accelerators and incubators that promote:
- the development of investment-ready early-stage firms by accelerators and incubators;
- an increased range, availability and quality of services available to innovative early-stage firms, such as mentorship and business plan development; and
- stronger entrepreneur networks that link recipient organizations with other important innovation organizations in Canada and internationally, including other accelerators and incubators, public research institutions, investor networks and venture capital funds.
The funding, delivered by NRC-IRAP and provided by CAIP, will be distributed over a five year period in the form of non-repayable contributions to a limited number (i.e., less than 10) incubators and accelerators that meet the selection criteria. There will also be a Venture Capital Expert Panel put together by the Minister of Finance to ensure that the contributions from CAIP are distributed in accordance with private sector needs. The incubators and accelerators selected for funding will be announced in early 2014.
This additional funding aimed to increase innovation and entrepreneurship in Canada comes at a time when Canada has been performing poorly in venture capital and business R&D spending relative to its peers. To see more information regarding Canada's venture capital spending, please see the article which can be found here.
The federal government's announcement can be found here
Footnote
1 Department of Finance Canada, "Harper Government Opens National Competition to Support Incubators and Accelerators to Help Create Jobs, Growth and Innovation in Canada", September 23, 2013.
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