All across Canada, incubators and accelerators are picking up speed and helping entrepreneurs take off, and their involvement is beginning to alter the dynamics of venture capital.
Venture capital (VC) has traditionally been the source of funding for many seedling companies, particularly in the clean tech sector. But, in recent years, a number of factors have contributed to making it easier to finance new ventures at the start up phase.
New technology, cloud computing, ease of access to angel investors, and economies of scale have contributed to making it cheaper and easier to start up a company,
In turn, these lower start-up costs make lending less attractive to VC, and have offered incubators and accelerators an opportunity to carve out territory in a market once dominated by venture capital.
In 2013, the government established the Canada Accelerator and Incubator Program (CAIP), to help small and medium-sized companies grow. CAIP provides support over a five-year period to a select number of accelerators and incubators with a maximum contribution up to $5 million per year. So far, the federal government has made $100 million available to accelerator and incubator organizations.
To date, fifteen organizations have been chosen to advance in the selection process under the CAIP program. The fifteen accelerators and incubators were chosen based on their ability to grow early-stage firms, provide entrepreneurs with a broad range of specialized services, and offer matching resources, either financial or in-kind.
Growlab, a Vancouver-based start-up accelerator, is one such organization chosen as a finalist to receive CAIP funding. Growlab helps entrepreneurs by offering mentorship, seed funding, a collaborative workspace, and intensive training. To date Growlab has helped almost thirty entrepreneurs launch their businesses.
Incubators and Accelerators Launching Today’s Clean Tech Entrepreneurs