Q. We are a young startup and were wondering if you could give us any tips on how to get noticed by angel investors.
— Ivan M., RateBot.ca
A. Congratulations on starting your new venture, Ivan. Now comes the hard part: finding enough cash to operate and grow it. I took your question to some big shots on the Canadian angel-investor scene.
For starters, they said you should contact angel groups, whose main purpose is to facilitate the introduction of companies to the angel-investor community. Forget gimmicks; simply send a well-researched executive summary, which should include a clear articulation of who you are, what’s special about your product, how you’re going to make money and who the competition is. Include your financials as well. If you present a strong opportunity, the group will want to follow up with a meeting; and if they’re still interested after that, they’ll move the process along to due diligence.
“If there seems to be a decent product, a stellar team and a market — and, ideally, they would have sold a few of their widgets — that’s a good start to the conversation,” said one angel I chatted with. “If any of those pieces are missing, it becomes a little more questionable.”
That said, all the angels admitted that a referral goes a long way. Ask someone in your personal network — your lawyer or accountant, for example — if they know any angels or high-net-worth individuals.
Finally, have you tried snagging a spot at the National Angel Capital Organization‘s annual summit, which hosts pitches by firms like yours? Or one of their smaller but more frequent investment summits? These are great places to network and present youropportunity. And attend as many networking events as you can. You never know where you might meet an angel. Of course, they don’t walk around with a badge on their shirt that says “Investor,” so now’s the time to seriously polish your networking skills. Hey, nobody said it would be easy.
Q. Being an environmentally friendly company comes with a big price tag. Is there help available for Canadian entrepreneurial firms?
— Adam S., Toronto
A. There are credits and incentives, not only for being greener but also for doing research into green technology. They’re pretty juicy, too. For example, some private companies carrying out scientific research and experimental development activities could qualify for tax credits and funding under the federal Industrial Research Assistance Program (IRAP). If you incur $500,000 in expenses and get the maximum IRAP funding, you’d receive rebates of up to $320,000 — that’s 64% of the total costs! Another good one is the $550-million SD Tech Fund, a federal grant program that supports new technologies that fight climate change. If you simply want to make your firm’s operations greener, look into Natural Resources Canada’s ecoENERGY for Renewable Heat program, which funds solar-powered space and water heaters. And since you’re in Ontario, there’s the Every Kilowatt Counts’ Power Saving Blitz, which gives small companies that implement turn-key lighting and water-heating retrofits up to $1,000. Many provinces, including Ontario, offer tax rebates if you purchase company cars that use alternative fuels.
PricewaterhouseCoopers has recently produced a list of credits and incentives available to green-focused firms.