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Velocity 101 Presentation - September 2009

Velocity 101 Presentation - September 2009



Keep it Simple!

Keep it Simple!
A presentation on how to structure your business and programs available to help you with financing



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    Velocity 101 Presentation - September 2009 Velocity 101 Presentation - September 2009 Presentation Transcript

    • Keep it simple, s… “ Velocity 101” September 19, 2009 *connectedthinking 
    • Speakers
      • Paul Hendrikse
      • Southwestern Ontario Technology Practice Leader
      • 519-570-5736 / [email_address]
      • Jennifer Psutka
      • Senior Manager
      • 519-570-5728 / [email_address]
    • Everything should be made as simple as possible but not one bit simpler. Albert Einstein
    • Business plans – articulation of your strategy
      • You have an idea – your business plan is the key to unlocking it’s potential.
      • The business plan should:
        • Clearly define your business objectives
        • Have an honest assessment of competition and threats to the business as well as to your own strengths and weaknesses
        • Be realistic
        • Focus on solutions to customer’s problems
        • Be action oriented
    • Corporate structure
      • Define the business before selecting the corporate structure – your business plan may send you back to the think-tank.
      • Once you have a viable business plan to attack – consider corporate organization.
      • Options:
        • Sole proprietorship
        • Incorporation
      • Key trade offs:
        • Taxes and SRED
        • Liability
        • Cost
    • Financing your business plan
      • Building successful companies requires money. Sources to consider in financing your company:
        • You and your own credit line
        • Friends and family – your next source of financing
        • Angel investors
        • Government
        • Banking relationships
        • Venture capitalist firms
      • Remember that it is better to own 10% of something worth something than 100% of something worth nothing!
    • Government as a source of funding
      • Key government sources of funding include:
        • Income taxes – SRED
        • IRAP grants
        • Ontario Interactive Digital Media tax credit
      • Each of these sources requires tracking expenses related to projects – so a business practice to develop early is how you plan on tracking your expenses to projects.
    • SR&ED: Scientific Research and Experimental Development
        • Incentive program administered by Canada Revenue Agency (CRA) to encourage innovation within Canada
        • Claim a cash refund or tax credit of up to 45% of eligible project costs such as salaries, materials, contracts, capital expenditure, overheads
        • Track project costs and labour hours of people working on projects
        • Date and retain documents and other evidence that show the experimental and analytical aspects of your work (trials, experiments, analyses, prototypes)
        • File your claim within 18 months of your fiscal year end
        • File for provincial and other applicable credits (OITC, OBRI, ORDTC)
    • Ontario Interactive Digital Media Tax Credit (OIDMTC)
        • Refundable tax credit for portion of eligible salaries & wages, marketing & distribution expenditures
        • 40% (eligible products); 35% (specified products)
        • “ Product” is an integrated combination of application and data files intended to be operated together
          • Primary purpose: educate, inform or entertain
          • Present info in 2 of the following: text, sound, images
          • Intended for use by individuals
          • Users can interact to choose what info is presented
        • Can be submitted any time after all eligible products have been completed. Can be submitted retroactively for all open tax years.
    • Customers as a source of financing
      • Customers should be your biggest focus as a source of financing. In addition to generating cash flow, customers:
        • Validate your technology, product or service and demonstrate to others that your business is addressing needs
        • Provide valuable information on product enhancements and modifications
      • Early stage customers should be considered partners in the development of your business.
      • Focus on cash flow, not revenue recognition.
    • Executing your business plan
      • Execution is a key issue as:
        • Early stage investors want to see progress before providing additional funds
        • Next round investors will require proof that the management team can succeed
        • Without execution, the business will fail
      • It is important to have a plan, but equally important is the need to continually monitor the business landscape and re-evaluate the plan.
      • Communicate, communicate, communicate.
    • Always bear in mind that your own resolution to succeed is more important than any one thing. Abraham Lincoln
    • Additional Resources 
    • Thank you. © 2009 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. Paul Hendrikse, Southwestern Ontario Technology Practice Leader 519-570-5736 / [email_address] Jennifer Psutka, Senior Manager 519-570-5728 / [email_address] Jay McLean, SR&ED specialist 519-570-5759 / [email_address] Kate Phillips, Client Relationship Executive 519-570-5720 / [email_address]