One of the best Canadian funding programs for startups – IRAP
Taking innovative action has always been more risky than following a well-established path.
However, there is no chance of rapid growth without taking risks. Over time, the difference between those who choose a peaceful existence and those who try new things increases.
This also applies to countries. Therefore, Canada is a very supportive country for innovation.
Having innovation in mind, many forms of minimizing financial risks associated with implementing new solutions have emerged. An overview of the individual funds available in the provinces concerned can make your eyes glaze.
For many startups, getting such external funding, along with finding a way to do technical project work, is a key element at the beginning of their business activity. However, there is no shortage of opinions that Canadian startups do not use enough funding and thus grow too slowly. Therefore, as Astra.Software, we support beginner entrepreneurs in both aspects.
IRAP is one of the most beneficial new startup funds. This post is dedicated to this kind of funding.
What is IRAP?
The proper name of the program is The The National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP). It was introduced in 1950 as a means of stimulating wealth creation for Canada through technological innovation. It is run by The National Research Council.
The purpose of the program is clearly defined as: “Stimulate wealth creation for Canada through innovation.” Although created at a time when no-one even thought about online startups, it plays a very important role in supporting ambitious entrepreneurs in fulfilling their dreams.
One example of positive support is the ekanary application invented by Kathleen and developed by our team. The project’s originator told us in an interview that she would not be able to fund the application development process without IRAP.
Therefore, apart from offering development services, we also support our clients in obtaining appropriate funding for them.
Proactive or Retroactive funding?
The variety of support programs in Canada results in many differences between them. It is worth to be aware of them and to look for appropriate sources according to different criteria.
They can be divided into multiple groups depending on the origin of the resources, the purpose of the support or the geographic scope of the delivery. In this paragraph, we mention the Stackability of Funding Programs since many startups are unaware of the ability to raise funds both before and after the cost occurrence.
Proactive Government Funding (Forward Planning)
Government funds are most often allocated on the basis of prepared documentation. The advantage of this type of solution is, of course, the possibility of using funds that were not previously available. In addition, you do not need to return them.
On the other hand, however, this type of funding involves the need to go through the formal fundraising procedure and then meticulously documenting the funds spent. You will need to invest your funds.
NRC-IRAP is part of pro-active programs. You can obtain resources and spend money on them. Development process qualifies as a valid expenditure. A great example of a successful use of NRC-IRAP funding is the aforementioned ekanary application. We encourage you to familiarize yourself with Kathleen, who had a great idea, business plan and not much experience with the world of technology and successfully created her project and got funding for it.
Retroactive Government Funding
In addition to the funds available in advance, there are also programs involving reimbursement of expenses incurred in the form of tax credits.
Among these types of programs there is a great variety of choice depending on the variables such as the purpose of the project or the type of reimbursed costs.
One of the advantages of this type of programs is that it is easier to raise funds than in the pro-active ones. Although this requires a lot of paperwork and in-depth knowledge of the subject, it is not related to the need to present the reasoning of the project or the preparation of the collateral.
The most famous program of this kind is SR&ED, which we have been providing support for for our clients many times. Read more about it here.
IMPORTANT: Different programs can be combined. Using an on-site fund does not mean that you can not leverage tax credits later on. Canada offers a lot of initiatives. See an interesting list.
How to apply for IRAP?
First and foremost, you need to be the right business to get this type of funding. In order to be considered for possible IRAP funding, the basic eligibility criteria are:
• a small and medium-sized enterprise in Canada, incorporated and profit-oriented;
• have 500 or fewer full-time equivalent employees; and
• have the objective to grow and commercially generate innovative, technology-driven or new products, services, or processes in Canada.
The next step is to contact the local Industry Technology Advisor.
You can also use The potential client must contact one of our ITAs who will assist with their projects toll free at 1-877-994-4727. There you will find, among others. Do you qualify for support?
First of all, pay attention to:
• the business and management capabilities of the firm and the company’s potential to achieve the expected results and outcomes associated with the proposed project;
• the financial capabilities of the firm and its plan to commercialize the developed technologies; and
• the technical aspects of the project and its potential impact on the firm.
Applications are generally not time-limited, so just contact the appropriate office. Remember, though, that you must do this before starting your startup.
You can also use our help to get financial support for your startup (as well as the actual development of the software). To do this, contact us or arrange a short, no-obligation Skype conversation.