Monday, January 2, 2012

Strategie Québecoise de l'entreprenariat: what's in it for startups

I have finally took some time to look at the details of the announcement of the November 15 2012.

If you look properly, its isn't very exiting...lot of noise for not much.
  • access to line of credit of max 30K without interest nor warranty
  • ability to delay payments of "Fond Local d'investisment"
  • Investment with Anges-Quebec which means they might take a little more risk
Lot of the new money is invested in the entrepreneur support programs and to simplify access to money to help entrepreneur buying existing corporations (the boomer generation are starting to sell but few can buy).

Conclusion, lot of new money in the system but at the end, not much for entrepreneurs. Most of it is to sustain the existing system so don't wast to much time of this and focus and launching technology and sales.

Why startups shouldn't wast time with Canadian Innovation Commercialization Program (CICP)

Canadian Innovation Commercialization Program (CICP) is an attractive program because as it is mentioned in its name, its goal is to help companies start commercialization of their innovations. The idea is interesting, if your innovation can be beneficial to the Canadian government, they might take the risk to be the first client and will pay for it. If the government is a client, your commercialization will most likely be way easier by eliminating the egg and chicken problem of getting the first real big client and real revenues faster.

Why this program?
The government is realizing that most product fail at the commercialisation phase. SR&ED is great support to develop innovations but their is little to support commercialisation (i.e: precarn program was closed).

But seriously why this program has been put in place?

There is a rumour that it is related to the Bombardier Aerospace and Embraer government subsidy controversy. Canadian was illegally subsidizing bombardier according to the WTO anti-subsidy policy.

CICP is a legal way to subsidize companies. If you look at the pre-qualified innovations of call 001, you will find bombardier and some other mature companies who might need less commercialisation help then other ones like startups as an example:

Why startups shouldn't waste their time with this program?
According to the selected companies, its seems that Startups shouldn't wast energy on this program and even less if they are from Québec and or have nothing to do with aerospace and military related projects and are startups. If they do so they will most likely be rejected by something like "The bidder’s company does not have the appropriate management team required to move the proposed innovation into commercial markets" which will bring you back the the chicken and egg problem. Freemium is definitely a way better alternative.