Will Vancouver be the Silicon Valley of Canada? Maybe Kitchener-Waterloo is the best candidate for SV North. What about Northumberland, Ontario? The Northumberland Community Futures Development Corporation (CDFC) thinks the small town one hour East of Toronto has a good chance at becoming a startup hotspot—and it’s setting its sights on innovation-driven startups.
The not-for-profit organization launched a new entrepreneurship competition called N100 this year as part of its mission to attract entrepreneurs and innovators to eastern Ontario. “No matter where you are located right now, you’re eligible for this equity investment in your company,” it states on the competition’s site. “We want you to start and grow your business with us, in Northumberland, Ontario, Canada.”
Companies applied in January to win $100,000 in funding (part of Northumberland CFDC’s $5 million Investment Fund).
The winner, announced today, is Unified Computer Intelligence Corporation, inventor of the Ubi, a voice-activated “ubiquitous computer.” Unified raised $229,000 when it launched the Ubi for pre-order last year through a Kickstarter campaign. Finalists include IFTech, provider of ARAIG, the ultimate sensory feedback videogame suit and online-learning company, ZoomToLearn.
While every municipality covets innovative entrepreneurs—and many governments have enticing grants in place to lure them—Northumberland CDFC hopes to draw companies like United away from from Toronto or other major urban areas like Kitchener-Waterloo by providing startup capital through government programs not available in western Ontario.
Wendy Curtis, executive director of Northumberland CFDC, says, “The key opportunity for us is that we have one foot in eastern Ontario, which has unique [government] programming not available in western Ontario—and that includes the GTA.”
Funding comes through programs like FedDev Ontario’s Scientists and Engineers in Business (SEB) Initiative in Northumberland, which provides up to $30,000 in matching seed financing for startups led by STEM entrepreneurs. Northumberland CDFC has also been able to tap the federal government’s Eastern Ontario Development Program.
It’s also offering very early seed funding to higher-risk ventures. Community futures development corporations historically lend money. “We wanted to actually set aside some funding to try to attract tech startups,” says Curtis. By offering very early seed money for high-risk endeavours, Curits says, “We’re filling a pre-angel funding gap in the market”—a space she says nobody else is in because of the risk attached to that kind of investment.
The N100 competition was, in part, a way to let people know that this unique opportunity exists in eastern Ontario.
It seems to have worked. John Hayden, manager of enterprise programs at Northumberland CDFC says the 30-odd entrants to the N100 competition were mostly from outside Northumberland—proof that “innovation can happen anywhere.”
“We’re charting a new course for rural entrepreneurship,” says Hayden.
What do you think? Will this approach work or is it not enough to pull entrepreneurs away from more urban cities?