The Federal Government’s Sustainable Development Technology Canada (SDTC) Tech Fund is designed to help technology developers get funding in the hard to finance pre-commercialization phase. This $550 million fund supports technology supporting “products and processes that contribute to clean air, clean water and clean land, that address climate change and improve the productivity and the global competitiveness of the Canadian industry.” The program doesn’t require repayment and the Government doesn’t take ownership of the intellectual property or an equity position in the company. In addition, they promote the companies they invest in. On the surface, this seems like an ideal program. However, it isn’t for everyone. Before you invest significant time and effort, here are a few things to consider.
The Tech Fund requires joint submissions between firms or with research or educational institutions. If you have developed your technology in-house, you have to balance the value of this funding with the requirement to join in a collaborative arrangement.
In their vetting process, the SDTC review panelists assess the business feasibility and the technical feasibility of proposed technology. They will ask specific questions of how your technology works. In addition, you are not allowed to know the identity of these panel members. SDTC gives assurances that all information is kept confidential, but you have no way of knowing that your information is secure.
This funding doesn’t require payback, but could build some cost into your startup. The biggest issue is the time required to qualify for and receive funding. It takes several months to get through the process and this can slow down your commercialization efforts.
If the funding potential outweighs these issues, you should proceed with the application. Here are some things to keep in mind as you work your way through the process.
Because this is “free money,” there is lots of interest and therefore lots of competition for this funding. The SDTC representatives advise that this funding application is like fundraising in the private sector. The first stage has a straightforward template to complete but the next rounds require significant business and technical expertise. Assemble your team or hire your resources before you start. Approach this fundraising just like as if you are contacting VC firms.
The SDTC Tech Fund managers are looking for the best bang for the buck they can get. Instead of return on investment, the return they are looking for includes cleaner air, soil and water as well as economic activity in Canada. They also earmark parts of the fund for different goals, like biofuels. Be sure to state all of the environmental benefits your technology can support. It will give you a greater chance of being funded.
For the right companies, the SDTC Tech Fund can provide funding to get them to the next level. If you think your company is a fit for this, you should apply. Keep in mind the caveats stated above. It can be good practice for your company when you raise funding for commercialization. Remember, this is a long process and can be grueling. Make sure you assign the time and resources to give yourself the best chance for success. The deadline for the next round of submissions is October 10. For more information contact SDTC.