Canada's one million small and medium-sized enterprises (SMEs) are the key drivers of job and wealth creation in all sectors of the economy. Many Canadian technology companies have long relied on government funding (SR&ED, IRAP, etc) to support their innovative agendas. As concerns continue to heighten about the future of SR&ED, the interest and demand for IRAP funding increases.
IRAP stimulates wealth creation through technological innovation by providing advice, financial assistance and services increasing innovation capacity. To those who may not have recent experience with the IRAP funding process, it is wise to know things have changed. Back in the stimulus days the IRAP ITAs (Industrial Technology Advisors) could not distribute funds fast enough. In 2017, however, although the funding bucket is not yet confirmed, it is expected to fall well short of demand. Competition will be high simply as a result of this increased demand, but there are other factors that have changed that companies should be aware of.
ITAs are now on the lookout for high potential companies.
ITAs are being asked to act like investors by creating a portfolio approach to identifying key Canadian companies and consider their funding as an investment. The focus first is on whether the company itself presents well as a good investment. Companies that can prove a trend of growing revenues, a pattern of profitability, demonstrate a large market opportunity, present a forecast that shows material growth and a balance sheet that is not burdened with complexity will be better positioned to pass round one. The criteria do not appear to be specifically defined, but if the business has the characteristics to attract investors (and better yet, can demonstrate it has already attracted investors) it is better suited to achieve portfolio status.
The merits of this shift can and will be debated I'm sure, but whether you like it or not the change has happened and it's wise to ensure you prepare adequately for your ITA meeting and present your company as though you were pitching an investor.
Now is the time to schedule a meeting with your ITA. Although funding will not be available until April 1st, ITAs are busy meeting with high potential companies so reach out now if you want to be considered.