It’s time for American entrepreneurs to start giving their northern neighbors some credit. Canada is serious about building out quality entrepreneurial ecosystems in its major cities, and Vancouver, Toronto, and Montreal are leading the way. As for Quebec’s largest city, FounderFuel launched its startup accelerator last year, joining Year One Labs and more in the mission to support Canadian entrepreneurship.
Created by the same team behind Montreal Start Up, FounderFuel raised $2 million from Real Ventures in June to launch its 12-week, mentor-driven startup “boot camp,” which provides its classes of 8 to 10 founding teams with $20 to $25K in seed right off the bat. In an effort to keep up with the reserves of top accelerators like TechStars and Y Combinator, FounderFuel is today announcing that it is upping the ante and putting quite a bit more capital on the table for its startups.
Showing that it is serious about financing the growth of young Canadian businesses, The Business Development Bank of Canada’s venture capital arm will be issuing up to $6M in convertible notes over two years to FounderFuel graduates. This means that as many as 40 startups will be eligible for an additional $150K note upon graduation, and is a part of the bank’s ongoing commitment to supporting business accelerators and early-stage tech companies across Canada.
Senia Rapisarda, VP of Strategic Investments and Initiatives at BDC Venture Capital explains the firm’s motivation through a national scope:
Entrepreneurship and venture capital investments are on the rebound in Canada; but there will always remain this 6 to 12-month critical period for many new companies when the startup capital from the partners themselves, their families and friends starts drying up and before financing from venture capitalists and angels can be secured. Too many promising companies have not made it to the next stage of financing for lack of operating capital … Canadian tech entrepreneurs should be confident they can compete with the best in the world, but they need a strong, supportive “ecosystem” to get the edge.
FounderFuel is one of a number of accelerators to launch in Canada over the last year and, like those of its ilk, the accelerator offers its founders access to a sizable cast of mentors (over 100 in FounderFuel’s case), capital, resources, and office space in a downtown setting. Yet, in a climate where accelerators are becoming a dime a dozen, each has to work even harder to distinguish itself from the pack. BDC Venture Capital’s $6 million in convertible notes is obviously a great way to do that, as that extra $150K can often be the difference between the deadpool and success.
Of course, not every startup is guaranteed to see that additional funding, which is why the capital isn’t offered to startups upon being accepted into its program. Instead, at the end of the 12 weeks, the accelerator and the BDC will jointly determine which startups are “venture ready,” and those that are will be given the $150K note at the accelerator’s Demo Day (which concludes the program). This will definitely make Demo Day quite a bit more fun (and stressful) for its founding teams, knowing that $150K is on the line. Not to mention the fact that a bunch of Canadian VCs will be in the audience.
As to the success of FounderFuel’s first batch of startups? The batch, which includes Playerize, OOHLALA, Wavo, and Seevibes, has collectively gone on to raise $2.5 million from a number of angel and venture investors. The accelerator’s second batch will have their Demo Day on May 23rd in Montreal, which is when FounderFuel and BDC will begin disseminating convertible notes.
FounderFuel’s third session (Fall 2012) begins August 13, and entrepreneurs have until June 15 to apply. (Find application forms here.)
For more, check out FounderFuel at home here.