This article was originally published on 07/28/2021.
Sifting through the abundant startup funding Canada has to offer can be overwhelming for burgeoning startups with limited resources. Canada’s many grant opportunities are one reason the nation was named the fourth-best global startup ecosystem by StartupBlink. While it may demand comprehensive research and an administrative approach, applying for grants is a great strategy to seek funding in Canada.
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Canada’s small business grant market is typically divided into basic funding, in-kind grants, wage subsidies, and tax credits. Understanding how different types of grants can be used for your startup is vital to ensuring they’re used correctly, but it’s a complicated landscape. Putting the right processes in place will streamline grant-seeking efforts, such as using grant management software to organize and identify the best funding opportunities for your startup.
But let’s first understand the concept of startup funding.
What is startup funding?
Startup funding is the money businesses use to support or launch their new firm. Such funds can be used for various purposes, for example, ideation, marketing and operational support required to start a new business.
A checklist for applying to startup funding programs in Canada
The world of startup grants is a highly competitive sphere and usually involves various stakeholders. Before diving into a sea of grant applications, prepare your team to put their best foot forward with a checklist for startup grants, which may include:
1. Confirm eligibility
Approaching only the grant opportunities that best suit your organization can potentially save time and energy spent on applying en masse. Using directories and interactive grant-finding websites can help you comb through available grants to find the right ones for your startup.
Technology can also aid the tedious process of qualifying for startup funding opportunities. Grant management software can find and bring new small business grants to you, cutting down on time spent manually searching for them. Once securing a grant, you may also need to ensure the money is used in accordance with the terms of the grant. Eligibility is considered a vital component to watch throughout the grant process.
For example, you may use grant management software’s feature to search eligibility criteria based on your type of organization and the type of funding you offer.
2. Prepare a business plan
Investors typically ask startups seeking funding a lot of detailed questions, but their primary question is generally broad: “What are you going to do with the money?” A business plan could be the best option to answer this open-ended question in a clear and strategic way. Business plans usually give investors and grant managers a clear overview of your proposal, and business plan software can help:
- Outline the structure and model of your business
- Create a roadmap for growth
- Track goals and key performance indicators
- Generate branded strategy maps, charts, and other visuals
- Allow all team members to add updated information
A ready business plan can be critical to a swift and successful grant application process. Keeping this information updated will reduce the stress on your team when completing new grant applications. Having a well-compiled business plan may also have the added benefit of instilling confidence in those reviewing your grant application.
3. Gather financial reports
Startup teams usually have a variety of responsibilities, and it’s not often feasible to hire a financial expert as the venture starts out. However, generating financial reports entails working with complex financial data that not every employee can fully grasp. Using digital tools, such as financial reporting software, that simplify financial reporting can be a cost-effective way for startups to provide financial information without hiring an expert. If you are under-experienced with financial reporting, bookkeeping tools could generate key analytics that grant providers may ask for.
4. Ensure compliance with terms
The grant-seeking process may include several phases; it isn’t complete once you’re awarded a small business grant. Compliance with the terms of the awarded grant is usually a necessary step in receiving funds. If your startup isn’t vigilant about adhering to the grant's criteria, you could be asked to return the money. You can possibly verify your organization’s adherence to the regulations with grant management software, which provides a platform to organize and oversee all grant details.
In case you are looking to seek funding from the Canadian government, you should ideally look at the eligibility criteria for funding programs.
Eligibility criteria for Canadian government funding programs
- Become incorporated: It may be essential to get your new firm recognized by federal incorporation or provincial/territorial incorporation.
- Business registration number: Before you apply for startup funding in Canada, you should ideally have a business registration number which is a 9-digit number assigned by the Canada Revenue Agency (CRA) to identify your business.
After checking the eligibility, the next step could be to understand and browse through different types of funding programs you may opt for your startup.
Always make sure to check the legal ramifications when applying for any funding type for your business.
Create a strategy to seek startup funding in Canada
Every startup hopes to fund itself through a single investment. For most, the dream of attracting a budget-less angel investor is far from reality. The majority of startups manage multiple donors throughout the lifespan of their businesses. Canada offers hundreds of startup grants, so it’s easy to get lost or confused by many opportunities. Defining a strategy to seek startup funding in Canada reduces time wasted on the wrong grants for your organization.
Staying organized could be a significant way to follow through on a strategy. A grant-seeking approach will need to organize contact management, received funds, application statuses, deadlines and more. Fortunately, cloud-based tools can keep your team organized and connected. These tools can also provide reminders and alerts that automate your efforts.
Store and reuse critical data
Digital grant management usually simplifies the traditional grant application process in many ways. With the power of digital storage, business information can be saved and reused easily. Once a grant application gets completed, the responses can be automated to fill in future grant applications. This function of grant management software may seem indispensable for startups without the budget to hire a dedicated grant writer.
Canada’s small business grant portal lets users track grants based on industry, but keep in mind that there may be funding opportunities that are not listed here. Everything from bookkeeping to business strategy to branding can play a vital role in your applications. Few startups have the resources to manage every step manually, but the software market is potentially closing the gaps. With the help of a few apps, finding startup funding in Canada can be another simple business process.
The applications selected in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication.