Applicant's guide: Incubators and Accelerators Driven by Excellence


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Table of Contents

Overview

Young innovative startups with high growth potential are key players in the innovation ecosystem. They create wealth and technological advances that benefit the entire population. Incubators and accelerators play a crucial role in supporting the development of these businesses. Increasingly present in Quebec, such organizations have thus become nurseries of talent and innovation.

On May 6, 2019, with a view to fostering the development of the ecosystem that supports startups, CED launched a call for proposals involving funding for projects by incubators and accelerators driven by excellence (IADE).

Through this call for proposals, $12 million over four years in non-repayable contributions will be awarded to incubators and accelerators that are well-connected, both locally and at the international level, that stand out for their best practices, and which are capable of generating economic success that crosses borders. This CED initiative aims to support these organizations so that they can better meet the needs of startups and thus help increase their number, further foster their scale-up, and boost their global competitiveness.

IADEs that are non-profit organisations (NPOs) and which meet the eligibility criteria may apply for funding for their projects. Funding applications must be received between May 6 and June 7, 2019, 11:59 p.m. EST.

All funding applications will be evaluated according to the objectives of the initiative and based on criteria relating to the following aspects:

  • Level of excellence of the services offered
  • Qualities and distinctiveness of the proposed project
  • Reasonableness and relevance of the project costs
  • Anticipated economic benefits

Priority will be given to collaborative projects, or projects that encourage the grouping together of some of the current strengths of the startup innovation ecosystem to increase its impact and benefits.

The purpose of this guide is to facilitate the preparation of applications under this call for proposals. The guide provides useful information about the targeted objectives, the type of projects sought, and how to apply for funding. It also outlines the criteria used to evaluate applications.

It is important to read this guide before submitting an application for funding in order to understand the scope and objectives of the call for proposals.

To access the funding application form, click here. Please note that you will not be able to save your information until you have completed the form. The form can only be submitted once it has been completed. Make sure you have on hand all the required information and documents mentioned in this guide.

For more information, call 1-800-561-0633.

Box 1
Definition of Incubator and Accelerator

INCUBATOR

A business incubator is an organization that offers long-term programs that provide innovative startups demonstrating high growth potential with access to coaching, mentoring, investors and other forms of support to help them establish themselves. Usually, incubators also offer startups access to logistical and technical resources, training, and shared office space.

Because each business grows at its own pace, the programs offered by incubators may last from several months to a few years. These programs aim to provide startups with the tools and knowledge they need to become self-sufficient.

ACCELERATOR

A business accelerator is an organization that offers short-term programs that provide startups with access to intensive mentoring, investors and other forms of support to help them grow and develop their markets. Businesses using accelerators are typically startups that have moved beyond the earliest stages of getting established; they are autonomous, but require guidance and peer support in order to grow.

Accelerator programs are carried out in cohorts, and generally last less than a year. The goal of the programs is to ensure that companies emerge ready to operate on their own and are in a position that allows them to take a share of their target markets.

Objective

The aim of this CED initiative is to increase the innovation ecosystem’s capacity to support young innovative businesses with high growth potential. More specifically, it aims to help Quebec incubators and accelerators improve their service offer in order to increase the number of startups, further foster their scale-up, and boost their global competitiveness. To this end, these businesses need to be assisted by well-connected organizations that offer first-class services and can support the businesses to help make them cross border economic successes.

By “startups,” CED means young (generally less than five years old), innovative high-tech businesses with strong growth potential that are of interest to investors, and which are transforming the way they do business through their business model and the new ideas they bring to market (see more detailed definition in the FAQs ).

Through its financial support, CED aims to assist Quebec incubators or accelerators in offering services of a level of excellence equivalent to that of best-in-class organizations around the world (see Box 2 and the initiative’s evaluation criteria).

Box 2
What are Incubators or Accelerators Driven by Excellence?

An incubator and/or accelerator driven by excellence is a world-class organization that, generally speaking, presents the following characteristics:

  1. Is highly effective, i.e., it recruits and supports successful startups that are experiencing sustained growth, have obtained funding and continue to play an important role in the innovation ecosystem once they have achieved the status of a medium-sized or large business.
  2. Implements best practices in terms of supporting innovative startups with high growth potential, notably:
    • High-quality, diversified services (coaching, mentoring, targeted training, detailed support programs, etc.);
    • Humane management practices, in a healthy environment that respects the health and rights of the owners of incubated businesses (founders);
    • The implementation of an inclusion strategy to increase support for startups led by under represented groups (e.g., women);
    • Access to a diversified financing offer (venture capital, loans, socio-financing, etc.);
    • Access to an extended network of companies of all sizes, ready to co-operate with startups (excubation);
    • International deployment (attraction of talent and foreign investment; protection of intellectual property; etc.);
    • Close and regular co-operation with innovation ecosystem players (universities, college technology transfer centres [CCTTs], consortia and research centres, other incubators and accelerators, university value-added corporations, etc.); and
    • Sharing of knowledge developed and acquired with other incubators and accelerators and innovation ecosystem players.

Eligibility

Eligible organizations

Eligible organizations include: incubators and accelerators (see Box 2) working in collaboration * or on an individual basis:

  • which are non-profit organizations (NPOs)
  • which can demonstrate that they are currently operating in Quebec and
  • whose head office is located in the province.

*Proposals submitted in collaboration: Through this call for proposals, an organization may submit a project in collaboration with other incubators or accelerators, or other innovation ecosystem organizations such as universities and colleges, consortia and research centres. This would be done in order to increase the level of excellence of the service offering through collaborations between different organizations. In such cases, a single incubator or accelerator should be identified as the “project proponent,” which will assume responsibility for the efficient coordination of the various activities with its main collaborators.

The requested funding must allow the organization to enhance the services it offers by means of new activities, above and beyond its current activities, to allow it to achieve a level of excellence equivalent to that of best-in-class incubators and accelerators, both at home and around the world.

Eligible activities

Applications must be submitted in the form of “projects.” A project is a time-bound undertaking that involves a set of coherent activities, and uses human, material and financial resources to achieve the planned objectives, while respecting specific constraints.

For the purposes of this call for proposals, eligible activities are activities undertaken by incubators or accelerators that foster the growth and global competitiveness of innovative businesses. These activities may include:

  • consulting and support services;
  • support for the design of new products and services or improvements to existing products and services;
  • technology or knowledge transfer;
  • intellectual property training, information and support;
  • strategy development (studies, diagnoses and action plans);
  • networking activities and business contacts;
  • strategic information services;
  • management capacity building; and
  • activities that support prototyping, proof of concept and demonstration and technology showcases for startups (excluding direct costs for startups).

Other activities may be authorized on an exceptional basis provided they are relevant and essential to the project and to the achievement of the objectives targeted by the initiative.

Important: Activities carried out under the project must be new or must significantly enhance the current activities of the incubator-accelerator. They could, for example:

  • improve startup coaching and mentoring;
  • allow for more time to be devoted to market development and the startup networking strategy;
  • increase their opportunities to join networks;
  • attract foreign investment to Quebec;
  • allow them to become a focal point for innovative startups elsewhere in Canada and around the world;
  • permit them to record their best practices and share them on an ongoing basis with other incubators and accelerators; or
  • ensure closer co-operation with other innovation ecosystem players, such as universities and colleges, consortia and research centres, businesses, etc.

Eligible costs

Costs eligible for funding under this initiative are costs that are directly related to the project, are incurred during the course of the project, and are deemed reasonable and essential to the implementation of the project. Of these, the most significant are

  • salaries associated with the eligible activities;
  • consultant fees;
  • equipment costs; and
  • other costs incurred to carry out the eligible activities.

The cost eligibility date—subject to a favourable response from CED—is linked to the application submission date. Costs incurred prior to this date are not eligible for funding.

The following costs are not eligible under this call for proposals:

  • Establishment of a fund to finance business projects;
  • Debt refinancing;
  • Amortization costs;
  • Purchase of assets exceeding fair market value; and
  • Goodwill;
  • Non-essential costs and costs that are not directly related to the project.

Financial assistance

The call for proposals has a budget of $12 million over four years, up until March 31, 2023. Each selected project will be eligible for financial assistance in the form of a non-repayable contribution. CED plans to support three to five projects.

Financial assistance is conditional upon the signing of a contribution agreement with CED for the implementation of the project. All terms and conditions pertaining to the non-repayable contribution will be set out in the agreement.

Assistance rate

The assistance rate may represent up to 75% of eligible costs, except in the case of equipment costs, for which the assistance rate can represent up to 50% of eligible costs.

The total amount of government assistance (federal, provincial or municipal, or from a government-funded organization) may not exceed 90%.

Evaluation process

Applications will be evaluated against the following elements, which are described in greater detail in Box 3:

  1. Level of excellence of the services offered
  2. Quality and distinctiveness of the proposed project
  3. Reasonableness and relevance of the project costs
  4. Anticipated economic benefits
BOX 3
Evaluation Criteria
  1. Level of excellence of the services offered
    • 1.1 The organization offers incubation and/or acceleration programs for startups, as well as services that meet the specific needs of startups.
    • 1.2 The organization has demonstrated its ability to provide entrepreneurs with intensive coaching and mentoring, delivered by qualified and experienced individuals who are agile in their advisory role.
    • 1.3 The organization has a Board of Directors whose members are experienced, and an equally competent management team that works full-time for the organization.
    • 1.4 The organization uses a rigorous process to select and evaluate startups recruited to participate in one or more of its programs.
    • 1.5 The organization has adopted a recurrent and systematic data collection and reporting process.
    • 1.6 The organization offers the startups it supports the opportunity to benefit from a large international network of contacts, services and clients.
    • 1.7 The organization has established sustained co-operation with other local and foreign incubators and/or accelerators (sharing of common clients; existence of programs offered in partnership; etc.).
    • 1.8 The organization is engaged with corporate partners that act as investors, sponsors or first clients. Some of these partners are multinationals.
    • 1.9 The organization has already participated in benchmarking exercises, and is included in one or more rankings comparing the best incubators and accelerators around the world.
    • 1.10 The organization is among the largest incubation and/or acceleration environments in the province. This should be demonstrated by the results achieved over the past three years, i. e. the number of businesses incubated and graded, type of support received, the growth of these businesses in local and international markets and the capital that has been raised.
    • 1.11 The organization has demonstrated an enviable history of clients and alumni that have reported significant growth, and has a plan to increase the number of success stories in its portfolio.
    • 1.12 The organization has already attracted foreign direct investment to Quebec, and its venture capital network extends beyond Quebec’s borders.
    • 1.13 The organization works closely with other players in the innovation ecosystem (universities, venture capital, CCTTs, consortia and research centres, etc.).
    • 1.14 The organization offers a diversified range of financing services for startups, and has a plan to become more innovative in this field over the next four years.
    • 1.15 The organization implements humane and inclusive management practices in a healthy environment that respects the health and rights of startup founders.
  2. Quality and distinctiveness of the proposed project
    • 2.1 The proposed project is innovative: it will allow the incubator and/or accelerator to stand out among similar projects in Quebec, Canada or around the world.
    • 2.2 The project description shows that the organization has a very good knowledge of best practices for supporting startups.
    • 2.3 The project is supported by a strategy that fosters business internationalization and the protection of intellectual property.
    • 2.4 The project will be carried out according to a credible implementation plan.
    • 2.5 The project promotes co-operation among innovation ecosystem players that support startups.
    • 2.6 Project-specific activities are well defined: the proposal describes how the work will be carried out, and the key lead(s).
  3. Reasonableness and relevance of the financial package
    • 3.1 The organization has provided a detailed and adequate description of the expenses (eligible and/or ineligible costs) and revenues (contributions) specific to its project.
    • 3.2 The organization has presented a realistic plan for diversifying its own sources of funding (federal, municipal, provincial and/or private).
    • 3.3 The organization has presented a credible revenue generation strategy to allow it to maintain and increase its current level of support for startups.
  4. Anticipated economic benefits
    • 4.1 The project will generate significant economic benefits in Quebec, notably in terms of the number of businesses that will benefit from the services provided; the revenue and anticipated growth of these businesses; capital raised; jobs created and maintained; and intellectual property created or acquired.
    • 4.2 The organization proposes quantified annual targets, specifically as concerns 1) the number of startups supported; 2) the number of startups with international reach; 3) the number of foreign startups; 4) the number of corporate partners; 5) the number of jobs created; and 6) the average growth rate (%) of supported startups.

Important: Under this initiative, priority will be given to projects submitted in collaboration, or projects that encourage the grouping together of some of the current strengths of the startup innovation ecosystem to increase its impact and benefits.

Organizations do not need to comply with all of the sub-components listed in Box 3 for their applications to be considered. These sub-components will, however, be used to analyze and prioritize applications received. The project plan must, therefore, clearly indicate how the organization and the proposed project comply with these various elements.

Organisations specifically targeting under-represented and designated groups could be prioritized as part of this initiative.

Submitting a proposal

Required documentation

The application form must be submitted no later than June 7, 2019, 11:59 p.m. EST. A complete application must include:

  • The application form, duly completed and signed by an authorized person.
  • The organization's financial statements for the past two years.
  • The proposal describing the project (project plan), presented in a Word document no longer than 10 pages (excluding appendices). The proposal must demonstrate how the project meets the initiative’s evaluation criteria. It must also include the following:
    • Context..
    • Presentation of the organization (and the collaborating organizations, if applicable) (see evaluation criteria 1.1 to 1.15 relating to the level of excellence of the services offered – details or corporate presentations can be included as appendices to the project plan).
    • Presentation of the benefits generated by the organization to date (and by the collaborating organizations, if applicable) including success stories illustrated by means of three to five examples of businesses that have been incubated within the organization and have graduated (details in this regard can be provided in an appendix) (see evaluation criteria 1.10).
    • Description of the project, including a detailed list of the planned activities, the associated costs and the timeline (see evaluation criteria 2.1 to 2.6 relating to the quality and distinctiveness of the proposed project).
    • Network, team and partners, and explanation of their connections to the incubator and/or accelerator (see evaluation criteria 1.13 and 2.5)
    • Detailed financing package (sources of funding) for the duration of the project (see evaluation criteria 3.1 to 3.3 relating to the reasonableness and relevance of the financing package).
    • Financial forecast of the organization for the coming year.
    • Anticipated economic benefits (see evaluation criteria 4.1 and 4.2).
    • Any other information deemed relevant.
  • In the case of proposals submitted in collaboration, the project partners’ letters of commitment. Applicants who are unable to submit all the commitment letters by the application deadline will be granted an additional 48 hours to submit them by email or regular mail. Partners for whom a letter of commitment is not provided will not be considered.

Document transmittal

The application form must be submitted electronically by June 7, 2019. A confirmation number will be generated. In addition, an original copy signed by an authorized person must be sent by regular mail to the following address within 48 hours of submission of the online form: Inter-regional Initiatives Directorate, 800 René Lévesque Blvd. West, Suite 500, Montreal, Quebec H3B 1X9.

Your organization’s financial statements for the past two years and the plan for the proposed project must be submitted by email to dec.iade.ced@canada.ca within 48 hours of submission of the application form.

NB: In the case of documents sent by regular mail, the postmark will be used to confirm compliance with the deadline.

It is the sole responsibility of the applicants to ensure that their complete application is submitted to CED by the prescribed deadline.

Applications that do not meet the eligibility criteria or for which certain information or documents are missing, insufficient, incomplete or have not been received by CED within the deadlines set out above will be rejected at CED's sole discretion.

It is important to note that CED may, at any time during the call for proposals, require that original documents be submitted for application evaluation or document verification purposes.

Applicants should therefore keep all original documents relating to their application. Refusal to provide such original documents or to submit them within the timeframe provided will result in the rejection of the application.

Applicants are encouraged to contact CED should they have any questions regarding the funding application. For more information, call 1-800-561-0633.

All applications will be evaluated based on the information provided. It is the sole responsibility of applicants to provide sufficiently detailed and legible information and documentation in support of their applications to allow CED to evaluate the proposals against the eligibility and evaluation criteria.

General conditions

Declaration and consent

Once they have submitted their projects, organizations are committed and have certified the various elements included in the application form for financial assistance.

Confidentiality and consent with respect to personal information

Information and data gathered under this call for proposals shall be collected, used and disclosed in accordance with the Privacy Act and the Access to Information Act.

The collection of any information by CED is subject to the Economic Development Agency of Canada for the Regions of Quebec Act.

Additional information

To obtain additional information regarding this call for proposals, call 1-800-561-0633.

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