Entrepreneurs, artists or individuals with creative ideas are looking for funding. Somewhere out there are individuals or groups looking to help fund the right ideas. Traditionally, finding each other has not been easy. In this article, I discuss an exciting new website – kickstarter.com, which matches ideas with capital.

Kickstarter.com is an awesome social networking site that uses the power of crowd sourcing to fund creative ideas and ambitious endeavors.

Anyone can create a dedicated page with a pitch for a set amount of funding to support or ”kick start” their project, a deadline (anytime within 90 days) for their fundraising target and how they will reward contributors. Any individual or group from anyplace in the world can give through the website to the project. The only catch is that a project only receives its donated funds (minus a 5% fee taken by kickstatrer.com) if the target amount was reached or exceeded within the established deadline. In cases where projects do not reach their funding amounts, the funds are returned to their original donors. This helps protects the value of donated funds based on the belief that a project is more likely to achieve its goals if it has all the funding it requires. In exchange for backing an idea, individuals receive rewards set by the person or group asking for money. For example, if an artist is looking for funding to record an album, the artist may give each supporter a free CD.

The power of kickstarter.com is the principle that a good idea if communicated well through the power of the internet can spread fast and attract support.

Kickstarter.com believes that a large group of people can be a tremendous source of money and encouragement Aside from giving ideas the chance to be funded, the process of creating an online ask creates an environment where an idea can be enhanced through feedback. Furthermore, the process creates communities by bringing together individuals who would like to support similar innovative initiatives. It also helps a project by building a network of backers who feel invested in ensuring the project’s success.

Why are people giving money to projects on kickstarter.com? I believe it is simply because individuals wish to be part of ideas and causes they feel connected to, but cannot take on by themselves. Offering support is next best solution.

Kickstarter.com should not be seen as “easy money”, rather it is earned money. Not all ideas are funded. Success requires a well thought out idea, a captivating proposal and from the start, potential projects will need to build a relationship with those interested in supporting the project.

Examples of previously successfully funded projects:

Lumi Co. – a start-up business involving an innovative textile printing technology. Asked for $12 000 and raised $12 998.

MakerBeam – a start-up that offers an open source building set (similar to Lego/Meccano/Erector Set but users can help design the elements) Asked for $10 000, raised $17 922 .

On average successful projects pitch and receive total amounts of less than $4000. Funded ideas have been both non-profit and business projects. As the site evolves and grows in popularity, raising funds will likely become more difficult as projects compete and only the most vibrant ideas survive.

In conclusion, if you think you have a kick ass idea, then kickstarter.com might just be the right place to get the required boost.

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A Business Incubator helps grow start-up businesses that demonstrate potential by supporting them with a dynamic program that involves mentoring from business leaders, marketing help, strategy coaching,  introduction to valuable business contacts, funding and assistance with product development.

Business Incubators continue to prove their value to business start-ups and consequently are increasing in both demand and availability.

The goal of a Business Incubator is to help start-ups that show potential but that without assistance would struggle and possibly fail. Business Incubators are set up by business and industry associations that understand the community benefits (such as job growth and economic diversification) as well as the importance of producing young businesses that have a solid path to success. According to the Canadian Association of Business Incubators, “On the average 95% of an incubator’s clients graduate, and 87% of incubator graduates remain in business.”

Acceptance into a Business Incubator is competitive based on meeting eligibility requirements that normally involve a business plan that demonstrates commercial viability, an innovative product and an attitude that is open to coaching. While Business Incubators offer access to valuable resources, the burden is on the entrepreneurs to learn, succeed and invest their own resources as required.

Here is a comprehensive list of Canadian Business Incubators can be found at www.cabi.ca

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Business Development  Bank of Canada  (BDC) offers venture capital to Canadian pioneering entrepreneurs and start-ups.

Business Development Bank of Canada is a federal government owned financial institution with a mission to help develop Canadian businesses through financing, venture capital and consulting services, with a focus on small as well as medium-sized enterprises. BDC’s  entrepreneurial and progressive corporate culture exists to support to Canadian businesses and accelerate the success of entrepreneurs.

Venture Capital is available to businesses at any stage (from seed to late/growth stage investments) involved in:

1. Green Energy Production
2. Environmental and Green Technologies
3. Manufacturing Innovations
4. New Electronics
5. Advanced Materials
6. Improvements in broadband transmission/bandwidth
7. Optical and Wireless Networking Technologies
8. Innovative Life Sciences
9. Novel Information Technologies

Typical initial investments range from $500 000 to $3 000 000 as part of a financing round in the $1 000 000 to $10 000 000 range. In return BDC will ask for up to a 49% control of the company and a position on the Board of Directors.

With over 1000 annual request for venture capital financing, the selection criteria and process is extremely competitive with only a few businesses receiving funding. In order to increases the chances of being selected the business must have a leadership team with excellent credentials along with an attitude that wishes to work alongside BDC,  a unique competitive advantage with strong barriers to entry, significant intellectual property, technologies with broader applications than a single product or market, viability for high growth plus high revenues,  job creation, a clear exit strategy, commitment from other investors and detailed business plan.

Companies wishing to apply for BDC Venture Capital must present business plan. Applicants that demonstrate potential will be asked to submit to a due diligence check and invited to a series of meetings discussing a venture capital ask and possible offer. Once an agreement is reached, funds can be invested. This entire process usually takes 3 to 6 months to complete.  

More information can be found at www.bdc.ca

Please feel free to contact me should you have any questions or comments. I can be reached at jorge@jorgeleclair.ca

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As a Business Development Consultant, I am often asked questions and advice regarding writing a Business Plan. In this article, I share answers to common questions.

What is a business plan?

A Business Plan is a strategy for successfully starting and operating a business based on management, environmental, economic, industry, marketing, operational and financial information. It is a map taking an idea from a concept to a revenue generating business. Developing a business plan for a business idea is a way to for entrepreneurs to assess the requirements, challenges and advantages of their business.

What information should a business plan contain?

The content and length of a business plan will vary based on the business, however at a minimum a business plan should be 30+ pages and contain the following sections: (note film projects and non-profit organizations will use a different format which are not discussed in this article)

1. Management – Biographies of management team and board of directors.
2. Business Profile – Vision and mission statement, business registration, business model and company history.
3. Product and Services – Description of products and services being offered.
4. Business Operations – A detailed explanation of how the business will be operated.
5. Industry Analysis – Industry research proving viability – national/regional trends, regulatory requirements, stakeholders, SWAT and competition analysis, risk, success factors, required due diligence.
6. Marketing Plan – 3 year Marketing Plan, including a detailed monthly first year plan.
7. Financial Plan – Detailed financial plan that includes income/revenue, monthly cash flow, break-even analysis and annual balance sheet statements.
8. Implementation Plan – Work plan with measurable, time bound milestones, plus a synopsis of future goals.
9. Funder/Investor/Lender – Offer and proposed return.

In addition to these sections a social enterprise will also include the following sections in their business plan:

10. Organizational Purpose – Description of population served and cause being addressed.
11. Community Impact – Short/long term economic, social, technological and environmental benefits.
12. Organizational Support – Identification of target supporters, donors with a connection with the organizational mission (grassroots and high net worth individuals), development of a fundraising portfolio using both new and current diversified fundraising channels such as government funding sources, corporate partnerships, grants, web 2.0 fundraising, third party events and memberships.
13. Acknowledgement – How the social enterprise will acknowledge supporters.

How should information be presented?

Given the detail required in a business plan, it is reasonable for a business plan to quickly become a lengthy document. However, lengthy documents can be overwhelming to read; therefore it is important that a Business Plan present information clearly and creatively in a way that captures the reader’s attention. To the business manager a Business Plan is a guide, but to lenders, investors, or other stakeholders a business plan is an advertisement that must inspire. Designing a business plan with a creative look, using graphics and diagrams to explain concepts is a must.

Who should develop a Business Plan?

Given the importance of a Business Plan, it should be developed by a business professional. A business plan writer should not be just a writer; rather they should be a business professional with a strong background in finance, marketing, operations, management, research and proposal writing. Their service should not be limited to developing the plan, instead their added value should involving coaching and advice with implementation.

At the least, it is important that a business plan be reviewed and critiqued from an unbiased third person point of view; that is another key service that a business development consultant provides. A Business Plan provides a reality check. For example, it is easy for an entrepreneur to become so excited about their idea that they develop an unrealistic belief in the success of their idea. Business history is full of innovative products that failed because they did not have a clear path to market or insufficient business resources. A Business Development Consultant can also educate a business owner on how to prepare and adapt to the future. I have sometimes been contacted by business owners in a bad financial situation because they did not have a business plan that properly predicted future cash flow needs.

Can a Business Plan help me raise capital for my business?

There are many exciting opportunities for financing including private investors, bank loans, government backed loans, grants, subsidies, hiring incentives and business incubators. All types of funding require presenting a business plan that clearly explains your business concept in away others can understand; it should clearly state what you want to achieve, where you want your business to go and how you plan to get there. However, not all businesses are eligible for funding.

Conclusion

A persuasive, detailed and creatively designed business plan is the first step towards starting a business. The difference between simply having dream and making it real, is the decision to start implementing the dream and remaining dedicated. That is exactly what separates dreamers from entrepreneurs. A Business Plan is the first step in turning imagination to income.

Questions about business plans? Please feel free to contact me at jorge@jorgeleclair.ca

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Launched in late 2009, Rogers Ventures is a “venture capital like” firm focusing on seed funding and early stage investment for Canadian technology start-ups.

Why “venture capital like”? Simple, because while it operates like a venture capital firm that invests funds, it can also offer select technology start-ups with advice, meeting spaces or other in-kind resources. Furthermore, in keeping with Ted Rogers’ desire to drive innovation, Rogers Ventures has a mandate that involves going beyond developing a portfolio of successful companies and investing to promote innovation acceleration in Canadian communities.

Pitching Rogers Ventures is initially done through its website – www.rogersventures.ca

Selected start-ups companies are contacted for a more detailed review, eventually requiring a business plan. Rogers Ventures will probably have a preference towards funding technologies that can contribute to its internet, digital media and mobile communications market. The amount that it will invest in a company is decided on case by case basis.

Examples in Rogers Ventures portfolio companies include Zoocasa, a vertical search product focused on real estate, Thoora, a next generation news discovery service, and GridCentric, a solution for grid computing.

The leadership of Rogers Ventures includes Melinda Rogers – Senior Vice-president Strategy and Development with Rogers Communications, Mike Lee – Vice-President with Rogers Ventures, and Nyla Ahmad – Vice-president, Rogers Ventures Operations.

I would be happy to answer any questions regarding business plan development or investor/VC pitches. I can be contacted at jorge@jorgeleclair.ca

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“Every time I go to a movie, it’s magic, no matter what the movie’s about.”
-Steven Spielberg

The Canadian Film Centre (CFC) offers film development and production grants through its Feature Film Project (FPP) – a development plus production focused mentorship program for emerging Canadian dramatic feature filmmakers.

Established by the Canadian Film Centre in 1992, and acting as Executive Producer, the Feature Film Project is provides supervision and up to 100% of the necessary financing for the development, production, distribution and marketing of dramatic feature films.

The Feature Film Project is awards 2 different grants:

1. Ultra-low Budget HD Feature (projects that can completed with a budget of up to $250 000): For example, High definition (HD) digital format, minimal cast and crew (approx. 2 to 4 principal/lead actors, small/mobile crew),minimal lighting and special production requirements and a flexible schedule. Films must be shot and delivered in HD.

2. Low Budget Feature (projects that can be completed with a budget of up to $500,000): For example, 16mm or 35mm film OR high definition (HD) digital format, 8:1 shooting ratio, approx. 2 to 3 principal/lead actors and 2 to 3 support cast, approx 15 to 25 person crew, and a 15 to 20 day or ‘custom’ schedule. Films must be shot and delivered in HD.

Both programs follow a 2 phase pathway:

Phase 1 – Development: This phase involves an in-depth review of the project including script, story editing, Director’s goals, cast, Production Company, team capacity, post-production plans, distribution and marketing strategy.

Phase 2 – Production Financing: Select project that have successfully completed phase 1 move into phase 2 where they are given the required funds to achieve set goals and screen their film at the box office.

CFC Feature Film Project accepts applications 3 times a year.

Eligibility for Feature Film Project is competitive and the minimum requirements are dramatic feature film not less than 85 minutes in length that are intended for theatrical release and produced/owned by a Canadian company. Preference is given to projects where the writer, director and producer have not individually or as a group made more than one dramatic feature film.

The Canadian Film Centre was founded in 1988 since then it has become an industry leader in developing Canadian talent and pushing the boundaries of film through creative expression as well as the embracing of new technologies. Films from the Canadian Film Centre have shown at prestigious film festivals such as the Cannes and Sundance Film Festivals. Equally impressive is that 25 Genie Award Nominations have been achieved for the cast and crew members working on FFP productions. A key mandate o the Canadian Film Centre is to provide 100% of the financing, creative, professional and administrative experience and mentorship necessary to ensure the successful development, production and marketing of Canadian theatrical feature films.

As an experienced Grant Writer and Consultant, I would be happy to answer any question regarding film funding – jorge@jorgeleclair.ca

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Established in 1986 by the federal government, the BC Community Futures Network promotes economic prosperity in British Columbia’s rural regions. Since its creation, the British Columbia Community Futures Network has played significant role in entrepreneurial and community development. For example, in the 2006/07 fiscal year, the BC Community Futures Program created or maintained more than 4,559 jobs, offered 606 loans totalling $31 million and leveraged an additional $53 million.

BC Community Futures Network has 34 locally and strategically positioned offices across the province.

While BC Community Futures offers many programs, one of its strongest programs is its Small Business Loan Program which provides funds up $150 000 in funding to small businesses who for various reasons are unable to get approved for financing from other sources such as banks. The Small Business Loan program can be used to stabilize an existing business, grow a thriving enterprise or start a new business.

Acceptance for a BC Community Futures Small Business Loan depends on having a persuasive and detailed business plan that clearly shows the market viability of the business, the potential for job creation, management experience, ability to repay and reasonable equity.

I would be happy to answer any questions regarding this program or assist you in preparing a successful business plan.

I can be contacted at jorge@jorgeleclair.ca

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Scotiabank is one of Canada’s largest philanthropic organizations; as a major provider of donations and sponsorship, Scotiabank offers powerful funding opportunities for nonprofits as well as education institutions.

In 2007 Scotiabank contributed more than $43 million to community causes globally towards 4 focused areas – Education, Health, Social Services plus Arts and Culture programs. Scotiabank has Imagine Caring Company status – a designation created by Imagine Canada for companies that are committed to donating 1% of their pre tax profits towards building vibrant communities and encouraging social progress.

Scotiabank has funded both capital and program proposals, however a recent trend is to support more programs/services than capital projects. Scotiabank has no standard grant application form, instead it using an open application process where applicants can use their talents to submit their own proposal format. As with any successful grant application, a proposal should show support from government, business, education, non-profit and grassroots participants. It’s also essential that a proposal show a convincing need, realistic objectives and persuasive metrics that clearly measure the success of the program. More than likely, an application asking for more than $50 000, will require in person meetings, so an inspiring, creative and high impact presentation will be key.

Scotiabank sponsors events across Canada based on 2 criteria. First, the event must demonstrate that with Scotiabank’s support it can have a powerful impact in one of Scotiabank’s 4 focused areas of giving. Second, the event must stand out from other events based on a history of success, credentials of its organizers, size, uniqueness and public importance. Examples of events that Scotiabank sponsors include: Scotiabank Nuit Blanche, Scotiabank Caribana, The Scotiabank Giller Prize, Rick Hanson Wheels in Motion and many more community events across Canada.

Applications for funding are reviewed quarterly. For projects that require less than $10 000 in funding, proposals are submitted to a local Scotiabank branch, ideally the applicant’s home branch. Proposals asking for more than $10 000 in funding are mailed to:

Director of Sponsorships and Donations
Public & Corporate Affairs
40 King Street West, 63rd Floor
Toronto, ON, M5H 1H1

Another funding opportunity from Scotiabank is the Scotia Employee Volunteer Program, where Soctiabank gives up to $1,000 annually to charitable organizations where its employees and pensioners are active volunteers. Furthermore, through the Team Scotia Community Program, Scotiabank matches funds raised by employees for local causes, up to a maximum of $5,000; therefore this is a funding opportunity of potentially $10 000.

Applying for Scotiabank funding will definitely consume resources and time, but it’s a worthwhile opportunity. With the right expertise and preparation, your organization could receive funding and partner up with leading socially responsibly bank whose footprint in communities and social change is growing every day.

Please contact me at jorge@jorgeleclair.ca and I would be happy to answer any questions you may have and help you put together a winning proposal.

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There are many financing options for new or existing small businesses; one the best options is the Canada Small Business Financing Program. (CSBFP)

CSBFP provides government backed loans of up to $500 000 for new or existing small businesses with less than $5 million in annual revenues. Borrowers can receive 90% of their required capital for a maximum of $500 000 if the loan is for real property or a maximum $350 000 if the loan is to open or improve a new business. This means that borrowers only need a down payment of 10%. Eligible costs are basically assets that have real value such as property, equipment, signage, computers, communication systems, restaurant equipment, vehicles, etc. Agriculture related costs or farm property are ineligible because such items are covered under other federal and provincial programs. Ineligible costs also include assets that have intangible value such as goodwill, working capital, franchise fees, goods inventories, research and development expenses, etc. Loans have a maximum term of 10 years.

The Canada Small Business Financing Program was created in 1999 because the federal government recognized the importance of ensuring that small businesses and entrepreneurs have access to credit. Previously, the program permitted a maximum of $250 000, however, under Canada’s 2009 Economic Action Plan the limits where increased. Under the program, the Federal Government guarantees 85% of the loan made by eligible institutions to qualifying businesses. By sharing the credit risk with lenders, it increases the chances that a financial institution will lend to small business borrower.

Financing for small businesses comes from either private investors including family as well as friends, bank loans or the Canada Small Business Financing Program. Capital from private investors is ideal, but it harder to find. Bank loans will have the lowest interests rates compared to other avenues of financing but usually require that a borrower have minimum 25% down payment and provide a personal guarantee for 100% of the loan. CSBFP is a viable alternative for borrowers with good credit who cannot provide a minimum 25% down payment and cannot provide a personal guarantee for 100% of their loan.

CSBFP is administered by banks and credit unions. A small business or entrepreneur must apply for a loan at a financial institution of its choice. The interest rate which may be variable or fixed, is decided by the lender. The maximum variable interest rate allowed is the lender’s prime rate plus 3% and the maximum fixed rate allowed is the lender’s single family residential mortgage rate plus 3%. CSBFP has a program administration fee of 2% of the total amount loaned under the program which is paid by the borrower to the lender and can be financed as part of the loan. Consequently, CSBFP has a higher interest rate than a normal business loan.

A personal guarantee is still required but the lender can only ask for a personal guarantee of up to 25%, this is better than signing an unlimited guarantee. A lower personal guarantee means that it will be easier to qualify for a loan because a bank only has to ensure that a borrower can repay 25% of the loan.

A persuasive, detailed and professionally written Business Plan and Presentation will increase the chances of being accepted to the CSBFP.

The bottom line is that if a borrower who wants to buy a new franchise needs a total $350 000, which breaks into $300 000 real equipment, $25 000 franchise fee and $25 000 cash flow, the borrower can ask for $270 000. (90% of the $300 000 of eligible costs) The borrow will need a $30 000 down payment (10%) and to demonstrate to the bank that he/she can provide a personal guarantee for $75 000 (25% of the loan) based on a relationship with his/her lender, personal credit history and personal net worth. Furthermore, the new franchise owner will have to somehow come up with the remaining $25 000 of required cash flow. Thus, in this example the total required to ensure a loan through CSBFP is $55 000.

The Canada Small Business Financing Program has and continues to be a popular source of financing. As mentioned, it’s not the only financing option available. New or existing business owners should look into all the financing options available and decide which is most suited to their needs.

More information can be found here: http://www.ic.gc.ca/eic/site/csbfp-pfpec.nsf/eng/h_la02855.html

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The Canadian Council for the Arts (CCA) is a crown corporation that reports to the Minister of Canadian Heritage; it is supported financially by the federal government as well as donations from businesses and the public. The role of the Canadian Council for the Arts is to support professional artists and arts organizations through grants, endowments, prizes, research and arts promotion.

CCA has 6 main departments: visual arts, media arts, dance, music, theatre and writing/publishing. All of its departments are further assisted by the Aboriginal Arts Secretariat – responsible for advancing the works of aboriginals, the Equity Office – responsible for the inclusion of diversity in the arts, and the Inter-Arts Office – responsible for complex proposals that combine or transcend traditional artistic disciplines.

Grant proposals are peer reviewed by panels of artists with relevant knowledge of the arts in their departments. The Canadian Council for the Arts receives about 16,000 grant requests annually and it approves approximately 6000 proposals by artists and arts organizations. Thus the raw odds of getting a grant are around 2 out 5. According to its 2007 – 2008 Annual Report, it awarded $164 million in grants, averaging about $27 000 per recipient.

Success in having a proposal approved will depend heavily on three aspects. First, a proposal should clearly demonstrate that it precisely meets all of the specific grant requirements, including obtaining detailed quotes and supporting documentation. Second, an artist will need to include a captivating professional biography. Third, a proposal must have goals that are S.M.A.R.T. – Specific, Measurable, Attainable, Relevant and Time Bound. Proposals that are highly unique or that apply to specialized and usually less popular grants such as the Japan-Canada Fund (a grant for collaborations between Japanese and Canadian artists) will have a better chance of being awarded funds.

Similar government funded arts councils exist at provincial and municipal levels.

More information can be found on at: www.canadacouncil.ca

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