Innovation Guelph – Fuel Injection Seed Funding Program Application Guide 2016

Introduction Bioenterprise Corporation was awarded funds in 2015 to work in partnership with Innovation Guelph to provide non-repayable seed financing, coaching and mentorship to assist start-ups and early-stage innovative businesses in the agriculture and agri-food sectors, sustainable and environmental technologies, social innovation, and manufacturing sectors. The seed fund will help high potential companies grow revenues and attract follow-on private investment over the next 4 years. Bioenterprise will serve companies in the agriculture and agri-food sector, while Innovation Guelph will serve start-ups and small- to medium-sized enterprises (SMEs) in other sectors mentioned above. Innovation Guelph’s Fuel Injection program will provide seed funding on a one-to-one matching basis up to a maximum of $30,000, and provide support services including mentoring/coaching, market and competitive analysis, financial and marketing strategy, investment preparation, and introduction to strategic partners.

Program Milestones

2015 Program Launch September 1, 2015

2015 Application Round 1 September 1 – January 11, 2016

2016-17 Application Round 2 (OPEN CALL) April 11 – June 1, 2016*

2016-17 Application Round 3 (OPEN CALL) April 1 – June 1, 2017*

2017-18 Application Round 4 (OPTIONAL) April 1 – June 1, 2018

2018-19 Program Completion December 31, 2018

* Additional open calls for proposals may occur annually, please check the website to stay abreast of program updates.

Application Process

Step 1: Open Call for Applications Innovation Guelph will post an open call for Fuel Injection applications in the spring of 2016, 2017 and 2018. All Fuel Injection prospects should watch the Innovation Guelph website (http://www.innovationguelph.ca/fuel-injection/) for program updates and due dates for applications.

Step 2: Letter of Intent All prospective applicants must submit a Letter of Intent (LOI) via an online submission link provided on the Innovation Guelph website. The LOI is intended to assist Fuel Injection prospects to determine their eligibility and provide basic project details to Innovation Guelph prior to submitting a full application. Not all businesses that submit an LOI will be invited to submit a full application. Companies that submit an LOI will be notified within the Open Call for Proposals if they have been invited to submit a full application.

Step 3: Initial Project Guidance If the business’ LOI is approved, the applicant will be invited to submit a full proposal consisting of an application intake form, application workbook and a budget template, which will be provided by Innovation Guelph. Innovation Guelph’s client services team will provide preliminary support to applicants in terms of application content, project scope and milestones. Contact: mickey.campeau@innovationguelph.ca or kevin.boon@innovationguelph.ca

Step 4: Formal Application The applicant will be responsible for completing and submitting the following documents (to be provided by Innovation Guelph):

1. Innovation Guelph Fuel Injection Application Workbook, which includes: a. Intake form b. Project Milestone Plan c. Budget

2. Proof of matching funds a. Financial statement or letter from financial institution, or investor, demonstrating funds

are available; b. Statement from the applicant business regarding committed use of matching funds for

the project; 3. Supporting documents such as business plan, executive summary, or pitch deck (optional); 4. Consultant CV* and quotes if relevant.

Step 5: Evaluation by Selection Committee Step 6: Application Response & Recommendations

* If proposing to use a pre-determined consultant, the applicant must provide the consultant’s CV as part of the application, and the consultant must be prepared for a reference check by Innovation Guelph staff.

Eligibility Criteria All applicants must meet these basic eligibility criteria:

The applicant has an ownership stake in the business;

The business is incorporated (Ontario or federal);

The applicant holds an executive or senior management level position in the company;

The company is a Canadian company located in southern Ontario; (regions are outlined in

Appendix A);

The company is a start-up with first revenue or investment achieved; OR an SME with less than

500 employees;

The company represents a high growth opportunity;

The business must be able to demonstrate matching funds up to a maximum of $30,000 in order

to receive seed funding;

There is a benefit (directly or indirectly) to the local/provincial economy through the creation of

jobs; growth of revenues; launch of products/services; attraction of investment; or cost savings

achieved through energy, water, or waste innovation(s).

The business opportunity has potential to address Canadian or global markets

Eligible Project Types Fuel Injection projects will focus on one or more of the following project areas. To be sure that a proposed project is eligible, please confirm with Innovation Guelph’s Client Services Team.

Business Management & Strategy Technical (IT, Scientific or Engineering) Talent Recruitment & Development Leadership & Management Training Branding & Marketing Process Efficiency & Optimization New Product Development & Applied R&D Prototyping & Product Piloting B2B Sales & Business Development

Eligible Project Activities and Costs

Category Eligible Activities Eligible Costs

Business and

Technical Expertise

Development

Professional services i.e. Intellectual Property review and

registration

Legal fees (up to a

maximum of $10,000);

Consulting fees;

Mentorship.

Regulatory strategy development

Establishment of business operations i.e. marketing/branding

strategy

Training

Applied research and

development

Product testing Sub-contractor fees;

Consultant fees;

Equipment assets (must

be leased and/or

retained†).

Product engineering

Regulatory focused activities

Pilot and demonstration manufacturing/processing

Technology development or optimization‡ i.e. next generation

prototype or further improvement of Intellectual Property (not

discovery)

Manufacturing and

Processing

Operations

Development of new processing techniques Sub-contractor fees;

Consulting fees;

Audits;

Service mark fees.

Packaging and/or label requirements i.e. certifications

Process and/or facility certifications

Market Development Marketing strategy development and implementation Consultant fees;

Sub-contractor fees;

Travel§ (North America)

Conference registration

& exhibition fees.

Branding

Development of marketing products i.e. promotional materials,

advertising, web design, package/label design

E-commerce strategy development and implementation

Participation in conferences and trade shows i.e. exhibit or

present**

Investment

readiness

preparation

Sales and marketing strategy development and analysis Mentorship;

Consultant fees. Financial modeling

Business planning

Development of supporting documentation i.e. pitch deck,

executive summary

† Must be written and signed off on by both parties in an addendum to the Statement of Work for successful project agreements. ‡ Must be completed by a third party. § Airfare and mileage considerations must adhere to Treasury Board of Canada policies (i.e. economy class and ¢/km) **Strategic meetings with collaborators, customers or investors must be scheduled and approved prior to conference date.

Ineligible Costs Costs of land, building or vehicle purchase

Refinancing

Costs of intangible assets such as goodwill, whether capitalized or expensed

Depreciation or amortization expenses

Interest on invested capital, bonds, debentures, or mortgages

Bond discount

Losses of investments, bad debts and any other debts

Fines or penalties

Costs related to litigation

Non-incremental wages

Fees for administrators, including payments to any member or officer of the recipient’s Board of

Directors

Opportunity costs

Food, accommodation and entertainment costs

Costs of membership in a professional body

Lobbyist fees

Cost of conference or tradeshow admission if not exhibiting or presenting

Costs associated with basic research and development activities

Application Assessment and Evaluation The Evaluation Committee†† will assess projects in two steps:

1. General Assessment Criteria – utilizes an evaluation rubric and will consider details provided in the Letter of Intent (LOI) – constitutes 75% of the total score.

2. Merit Assessment Criteria – additional points will be awarded by the Evaluation and Selection Committee based on additional details or supplementary documentation provided by the company and/or the evaluation committee – constitutes 25% of the total score.

A project must meet all the General Assessment Criteria to be considered for Merit Assessment.

General Assessment Criteria

1. Applicant has completed the application requirements in full. 2. All basic eligibility requirements have been met (outlined in Eligibility Criteria section of the

2015 Program Guide) 3. The project clearly aligns with Fuel Injection’ s Eligible Activities 4. The project description, work plan, activity budget, and milestone plan are completed and

provide sufficient details to complete a merit-based assessment. 5. Applicant has acknowledged his/her agreement with the terms and conditions of the application

form.

†† The Evaluation Committee will be an Innovation Guelph committee with participation of program partners including Bioenterprise as a committee observer. The committee will evaluate applications during a half-day session with a goal to move forward with a minimum of 8 recipients in the 2015 round. These targets will change depending on program year.

6. The application provides enough information to address all of the evaluation criteria listed below:

A. Project/Problem Description

Project purpose is clear

Problem clearly stated

Approach clearly stated

Project team identified

Resource needs are identified

Significance of project is clear B. Expected Outcomes

Outcomes are tangible

Economic impact includes any of: job creation; revenue growth; the launch of products or services; or investment secured;

Cost savings will be achieved through waste, water or energy innovation. C. Milestones & Budget

Discrete tasks identified

Tasks have tangible outcomes

Tasks are matched with budget

Costs are realistic

Use of proceeds is clear

Timeline is realistic

Recipient Agreement Process Applicants will be notified as funding decisions are reached, usually within 30 business days from the application due date. Successful applicants (“Recipient”) must enter into a Contribution Agreement with Innovation Guelph. All recipients must also register as an Innovation Guelph client and agree to the Client Services Agreement provided in the client intake process. Terms of the project work plan will be formalized by way of the development and signing of a Statement of Work which will be attached to the Contribution Agreement. Through this Agreement, the Recipient will work with Innovation Guelph’s client services team and a lead mentor to schedule monthly status meetings and regular correspondence for mentorship and coaching related to the project. Seed funding will be released to the Recipient on a milestone basis, outlined below:

50% of activity seed financing released with verification of activity initiation.

25% of activity seed financing released upon recommendation by lead mentor or analyst and completion of Interim Report.

25% of activity seed financing released upon completion of project and the reporting requirements.

The Recipient will be responsible for tracking expenses against each activity using a template provided upon approval, as well as for storing receipts/invoices for a minimum of 6 years for auditing purposes. With regards to Innovation Guelph’s reporting requirements, the Recipient will be required to complete the IG Quarterly Client Survey. Second and third seed funding installments will require the submission of an Interim Project Report and a Final Report – templates will be provided. The client surveys and reports are designed to measure achievements and outcomes from the project and provide feedback on the relevance, timeliness and accuracy of the services received through the program. Details of these requirements will be outlined in the Contribution Agreement and Statement of Work.

Appendix A Applicant Entrepreneur/Business must be located within the regions outlined below: Territory – Southern Ontario Southern Ontario includes the following 2011 Statistic Canada Census Regions:

1 Stormont, Dundas and Glengarry; 2 Prescott and Russell; 6 Ottawa; 7 Leeds and Grenville; 9 Lanark; 10 Frontenac; 11 Lennox and Addington; 12 Hastings; 13 Prince Edward; 14 Northumberland; 15 Peterborough; 16 Kawartha Lakes; 18 Durham; 19 York; 20 Toronto; 21 Peel; 22 Dufferin; 23 Wellington; 24 Halton;

25 Hamilton; 26 Niagara; 28 Haldimand-Norfolk; 29 Brant; 30 Waterloo; 31 Perth; 32 Oxford; 34 Elgin; 36 Chatham-Kent; 37 Essex; 38 Lambton; 39 Middlesex; 40 Huron; 41 Bruce; 42 Grey; 43 Simcoe; 46 Haliburton; and 47 Renfrew.

See the following maps below for visual representation: Map 1: All Regions of Southern Ontario Map 2: Western Ontario Map 3: Central and Eastern Ontario