When I decided to found a start-up 5 years ago, I made an investment with my own capital and put the wheels on. I didn’t have any idea about accelerators, incubators, angel investors. At that time entrepreneurship ecosystem had just started to develop and I was trying to find my own way. Now, working on a new project in Canada, first thing in my to-do-list is to look for financing from other sources rather than my own investment.
My project-myglamtime-, for which I am searching investment is a beauty-on-demand app trying to solve time management problem of business women. Basically, the app brings together users with mobile beauty artists. In this app users can review the background of mobile artists; choose among them; make an appointment with them and evaluate their performance. Service providers can market themselves and fill their empty slots.
Having the lesson from my first experience, this time my starting point is looking for governmental agencies for start-up financing. My biggest problem is to find funding.
BDC- Business Development Bank of Canada is my first stop. This bank is the only financial institution in Canada devoted exclusively to entrepreneurs. As stated in BDC Linkedin Account, its mission is to help, create and develop strong Canadian businesses through financing, consulting services and securitization, with a focus on small and medium-sized enterprises.
BDC has financing services. If you demonstrate realistic market and sales potential (my project is targeting to reach 100,000 users in 5 years) , provide a solid business plan ( I don’t just have my business even my analytics plan), have experience or expertise in your chosen field (I have already my start-up in the same sector) and demonstrate key personal characteristics of a successful entrepreneur ( I am a self-motivator and life-time learner) then you can get from BDC investment for:
- working capital to supplement an existing line of credit
- Fixed assets
- Fund marketing and start-up fees
- A franchise purchase
- Consulting services
I think this institution is cool because it’s not just concentrating on financing. As an entrepreneur, if you don’t have a co-founder, you can feel lonely very easily. Sometimes you just want to have advice, of course for free 🙂 I think BDC is a very important source to use. According to the information given on BDC advisory services site,they have a national network of consultants and specialists who can be consulted for business scale up, increase productivity, innovation and globalization.
Last but not least, one highlight of BDC for me is that it has special support for women. They created $700M in loans over three years, and supported 335,000 women in Canada with an incorporated business.
I think I am a high potential finance support taker from BDC, until one small but crucial point as stated on their site:
You have reached the age of majority in the province or territory in which you live to have access to BDC sources 🙂
In a discussion session about governmental agencies in class, I heared about OCE, Ontario Centres of Excellence, another governmental institution that drives the development of Ontario’s economy by helping create new jobs, products, services, technologies and businesses.
I think this institution is interesting for my project as a potential finance source. It has a financing program called SmartStart Seed Fund. This program is mainly targeting young entrepreneurs from the ages of 18 to 29. However, they also support entrepreneurs from 30+ years (which is me : ) ), launch and build their businesses. Actually SmartStart provides up to $70,000 to support incorporated Ontario-based start-ups. However, because I am not in my twenties anymore, they categorize me under Non-Youth-led investments and provide up to $30,000 investment. Prerequisite is that, you have to have 1:1 matching cash contribution from a third-party investment and/or customer sales. What I understand is either I have to find another investor for the same amount or have like 1000 appointments to access the fund. They have also advisory services like BDC but you have to have training item in the business plan to get advisory support. Again like in BDC you have to be Canadian citizen or a permanent resident of Canada. I think I can apply to this institution as a second choice.
In the same discussion in class, my colleague has explained about Federal Trade Commission. I think this agency might be very useful in the future if my main problem changes from seed funding to globalization. Let’s say you already found your company and you want to expand your business outside of Canada let’s say to Nigeria. If you apply to Federal Trade Commission then the agency the agency gets in touch with the embassy in Nigeria and you can receive the market research for this specific country. It means the agency makes all the market research for you. I think this research is valuable like gold. So, I made a note about this agency for my further expansion.
My takeaway from my first experience was that first I have to find the funding source before making any investment. Accordingly, this time I collect information about funding at the beginning. Let’s see the result together.