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Riz's IRAP Slides


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Riz presented this set of slides at VEF Momentum March 11th 2009.

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Riz's IRAP Slides

  1. 1. <ul><li>Rizwan Kheraj – NRC-IRAP </li></ul><ul><li>March 11, 2009 </li></ul><ul><li>VEF Momentum </li></ul>
  2. 2. <ul><li>&quot;This is another fine mess you've gotten me into!&quot; </li></ul>From
  3. 3. <ul><li>Are you going through…… </li></ul><ul><ul><li>Customers slow to close, can’t close, can’t find, traffic not coming </li></ul></ul><ul><ul><li>Investment scarce, low valuations, time’s a-wasting, being jerked around </li></ul></ul><ul><ul><li>Team – smaller, morale not great, fewer pizzas </li></ul></ul><ul><ul><li>F &F – “go get a real job!” </li></ul></ul>
  4. 4. <ul><li>BUT…entrepreneurs shine in times of trouble </li></ul><ul><ul><li>A recession is the best time to start a company </li></ul></ul><ul><ul><ul><li>Total SMEs with potential for R&D ~107,000 </li></ul></ul></ul><ul><ul><ul><li>B.C. led the nation with 86.7 Small Bizs per 1,000 people (2007) </li></ul></ul></ul><ul><ul><li>The objective is to distill the value of a company </li></ul></ul><ul><ul><ul><li>Best time to get great people at reasonable prices </li></ul></ul></ul><ul><ul><ul><ul><li>Also opportunities for companies to band together – share costs </li></ul></ul></ul></ul><ul><ul><ul><li>Government programs ready to help you build your technology and your company </li></ul></ul></ul><ul><ul><ul><li>Your customers are looking for good deals and want to partner – so you can help them make money </li></ul></ul></ul>
  5. 5. <ul><li>Where’s the money to start? Use multiple sources! </li></ul><ul><ul><li>F & F – raise an internal round </li></ul></ul><ul><ul><ul><li>Get a corporate lawyer to help you be investable </li></ul></ul></ul><ul><ul><li>A customer as a development partner </li></ul></ul><ul><ul><ul><li>Align consulting with product/service idea </li></ul></ul></ul><ul><ul><ul><li>Raising cash is a distraction from creating something to sell and convincing someone to buy – so do this! </li></ul></ul></ul><ul><ul><li>Get a credit line at low rates or low interest loans </li></ul></ul><ul><ul><ul><li>BDC ($350m injection in Jan), Credit Unions, Banks </li></ul></ul></ul><ul><ul><ul><li>CYBF & CYBF– BDC start-up loan programs – 15K </li></ul></ul></ul>
  6. 6. <ul><li>Where’s the money to start? </li></ul><ul><ul><li>Government programs – get an operations person to fill forms and manage – don’t be lazy about this! </li></ul></ul><ul><ul><ul><li>IRAP – Youth Employment Program </li></ul></ul></ul><ul><ul><ul><ul><li>Details being put in place for April ~ May 2009 start </li></ul></ul></ul></ul><ul><ul><ul><ul><li>For 2009-2010 & 2010-11 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>One time $30,000 over 12 months per Youth </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Post-graduate between 15 – 30 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Canadian, LI; not on UI </li></ul></ul></ul></ul>
  7. 7. <ul><li>Where’s the money to start? </li></ul><ul><ul><ul><li>IRAP – R&D program </li></ul></ul></ul><ul><ul><ul><ul><li>Supporting technology development </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Non-repayable contributions – not Grants! </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Effective April 09 for 2090-10, 2010-11 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>75% of eligible project costs </li></ul></ul></ul></ul><ul><ul><ul><ul><li>S upport can be up to 100 % of technical salaries and 75% of contractor fees </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Amount dependent on factors such as scope, impact, innovation, jobs created, etc </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Also can support market assessments by ext. consultant </li></ul></ul></ul></ul>
  8. 8. <ul><li>Where’s the money to start? </li></ul><ul><ul><ul><li>IRAP – Canadian Association of Management Consultants </li></ul></ul></ul><ul><ul><ul><ul><li>$150 leverages up to 5 working days of a consultant </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Services include: </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>General business and financing advice </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Market feasibility assessment including market size </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Marketing and sales planning guidelines </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Business planning guidelines </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Human resource planning and advice </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Market entry recommendations </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Qualitative or directional Market research </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Operations and systems advice </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Coaching </li></ul></ul></ul></ul></ul>
  9. 9. <ul><li>Where’s the money to start? </li></ul><ul><ul><li>The paperwork is LESS than investor’s due diligence </li></ul></ul><ul><ul><ul><li>SR&ED – underutilized program – (get up to 40% back of eligible costs) - only 15K SMEs used it last year </li></ul></ul></ul><ul><ul><ul><li>Canada New Media Fund (details coming) </li></ul></ul></ul><ul><ul><ul><li>MITACS – Grad student for 4 months (7.5K matching) [some w IRAP] </li></ul></ul></ul><ul><ul><ul><li>NSERC I2I – spinning out of University? Got an industrial partner – use this </li></ul></ul></ul>
  10. 10. <ul><li>Myths about Government programs </li></ul><ul><ul><li>1 &quot;It's hard to get Govt funding - bureaucratic, paperwork, takes too long....&quot; </li></ul></ul><ul><ul><li>2 &quot;The Govt is not going to give someone as inexperienced as me this type of money&quot; </li></ul></ul><ul><ul><li>3 &quot;Applying for Govt programs distracts me from running my business &quot; </li></ul></ul><ul><ul><li>4 “You have to wait a long time to get the check” </li></ul></ul>
  11. 11. <ul><li>Leveraging Example – 5k -> 130K </li></ul><ul><ul><li>1. You are 18-34, got a great idea – write a business plan – get the community & mentors to review </li></ul></ul><ul><ul><li>2. Go to CYBF (BDC?)– get a 15K loan </li></ul></ul><ul><ul><li>3. Put together technology development plan, put in few $K into your company from consulting work, start getting a few good people - sweat equity, and develop a POC </li></ul></ul><ul><ul><li>4. Go talk to IRAP and go through assessment process for a technology development project, get advice, use the $150 CAMC or library capability, etc – put in proposal for project if IRAP gives green light – lets say it’s a $120K project – you got 3 people working on it for a year to build your beta </li></ul></ul><ul><ul><li>5. At the same time you raise a F &F round of $25,000 </li></ul></ul><ul><ul><li>6. Build the beta, do some targeted customer consulting, validate your technology & business model </li></ul></ul><ul><li>$ </li></ul><ul><ul><li>0 </li></ul></ul><ul><ul><li>15,000 </li></ul></ul><ul><ul><li>20,000 </li></ul></ul><ul><ul><li>(120,000) </li></ul></ul><ul><ul><li>90000 </li></ul></ul><ul><ul><li>(30000) </li></ul></ul><ul><ul><li>~10,000 </li></ul></ul><ul><ul><li>buffer </li></ul></ul>
  12. 12. <ul><li>Takeaways </li></ul><ul><ul><li>If you don’t need to raise investment – don’t – bootstrap your business in creative ways first </li></ul></ul><ul><ul><li>Get a friendly and very satisfied customer </li></ul></ul><ul><ul><li>Leverage government programs – both funding and advisory services </li></ul></ul><ul><ul><li>Manage your cash burn closely </li></ul></ul><ul><ul><li>Persistence & tenacity will lead the way </li></ul></ul>
  13. 13. <ul><li>Contact </li></ul><ul><ul><li>NRC-IRAP Pacific </li></ul></ul><ul><ul><ul><li>604-666-6062 </li></ul></ul></ul><ul><ul><ul><li> </li></ul></ul></ul>