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Top Investors And Accelerators For Canadian Startup Owners

Updated: Dec 1, 2022


Top Accelerators & Investors for Canadian Startups and Small Business

Investments in technological innovation have changed how businesses operate as well as how people live. The emergence of new disruptive technologies — AI, machine learning, automation, blockchain — is forcing savvy Canadian business owners to seize a narrow window of opportunity to capitalize on the latest digital revolution and harness it for their ventures to thrive.


As modern businesses adapt to industry trends, and gradually become more dependent on technology, the demand for business accelerators and investors continues to climb. This trend shows no sign of slowing down, with one in three small to medium-sized enterprises (SMEs) planning to invest in software over the next 12 months. With a positive outlook in Canada’s technology sector (despite the downturn), and an expected 22.4% growth rate in the 2021 to 2024 period for investments in tech, it is vital for business owners seeking to accelerate their venture to be well-informed of the resources available to support them. Embarking in a new venture inevitably brings along new challenges, which is why founders seek external support from experts who already have the previous industry knowledge and experience to help new startups reach their fullest potential.


Upon reading this guide, you will be well informed on the startup ecosystem, and the necessary steps to grow your startup, taking a unique idea, along with the support from industry and innovation experts to a fully operational and lucrative company. There is no golden ticket to success when navigating the entrepreneurial journey. However, the sky’s the limit, and with the right mindset, resources, and support this is just the start to creating a meaningful impact on the world.




Table of Contents

Summary of Accelerators and Investors

Accelerator Programs

Investors




The differences between Investors and Accelerators

Although both accelerators and investors play a vital role in the development of a startup in Canada, especially in its early stages, there are key differences between the two. Imagine the incubation stage as a school where founders learn about building a company, before entering the real world where the company is on the market.



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What Accelerators Do For Canadian Startups & Small Businesses

Accelerators are programs that support developing companies/startups by providing them with a network of investors, access to government support, mentorship, and other guidance needed. Accelerator programs generally range from three to twelve months and are guided by industry professionals throughout the process. Companies entering accelerator programs are established, and have completed the incubation stage — building a minimum viable product (MVP). Accelerator programs focus on growth and expansion and tackle challenges in organizational structure, operations, financials, and business strategy. Essentially, accelerators provide advisory services for startups. Lastly, following completion, the company is pitched to an audience of Venture Capitalists (VCs) and investors to raise capital.


Some of the most highly regarded Accelerators that you may be familiar with include Y Combinator (YC), Techstars and 500 Startups. Although based in the United States, these accelerators regularly work with foreign-based companies and are available to Canadian businesses. Many top Accelerators back unicorns and successful companies such as Coinbase (YC), Airbnb (YC), Canva (500 Startups), Reddit (500 Startups), and Zipline (Techstars).




How Investors Help Businesses

Following the establishment of this method involves investors purchasing the company’s shares at a fixed price. Priced Equity investments are intangible assets, or securities, similar to investing in a government-issued bond or a tesla stock. Additionally, Priced Equity Round investments typically are made to later-stage startups (Series A+), which we will cover later. Startup founders seek advice from seasoned entrepreneurs and industry professionals through accelerators. Accelerators provide advisory services, but do not provide the necessary capital needed to execute the strategies for growth — which is where investors come in.



Typically, there are 3 popular methods of raising investment for startups:


1. Priced Equity Round

Price Equity round fundraising is the most common method of investment involving investors purchasing the company’s shares at a fixed price. Priced Equity investments are intangible assets, or securities, similar to investing in a government-issued bond or a tesla stock. Investors will determine a startup’s valuation — how much investors think a company is worth, then offer an investment — capital in exchange for shares in the company. The price per share is calculated on behalf of the valuation of the company. Priced Equity Round investments typically are made to later-stage startups (Series A+).


2. Convertible Debt

Convertible debt can later be converted from one asset type to another. For example, the initial investment amount may be converted into stock options, equity, or cash as time goes on. In this method of investment, an investment in a form of a loan is given to the start-up. Upon reaching the maturity date or end of term, the debt can be repaid in cash or stock options — shares of the company. Investors specializing in earlier phases, such as the seed stage, often invest using convertible debt as the startup’s financial performance continues to change.


3. Simple Agreement for Future Equity (SAFE)

The SAFE was first introduced by the revolutionary technology accelerator and investor Y Combinator (YC) in late 2013. Since then, the SAFE has become a popular new choice for investors for early stage fundraising, offering two essential features important to startups — high-resolution fundraising and flexible one-document security.


A) High-resolution fundraising

Investors and founders are more transparent with what each side gives and receives in a transaction. This way, founders and single investors can close a deal as soon as both parties are ready to sign a formal agreement, instead of having to organize a simultaneous close with all investors.


B) Flexible one-document security

The SAFE does not have a set maturity date, eliminating the need to negotiate multiple terms such as interest rate and maturity date revisions. A SAFE can save founders and investors significant legal fees and reduces the time spent negotiating the terms of an investment. Time is money — literally. This way, the single term that requires negotiation is the valuation cap — the price ceiling imposed on the SAFE when it converts to stock ownership in the future.




Company Funding Stages

A Canadian startup’s funding stages include pre-seed, seed, series A, and series B, followed by the end goal of an initial public offering (IPO). Using the analogy of a seed, which will eventually grow into a tree, companies begin from an idea, or “seed” and strive to grow into a “tree”, representing a fully operational company.


Pre-Seed

Commonly referred to as the “bootstrapping stage," companies in the Pre-seed stage use their existing network, connections, and resources to begin operations. In this stage, pre-seed companies are conducting market research, developing marketing timelines for a product launch, and continuing to look at the feasibility of their product or service. Since the pre-seed stage is so early in the process, it is generally excluded from rounds of funding.


Potential investors in this stage include: family, close-friends, supporters, the entrepreneurs themselves and potential early-stage angel investors.


Seed

In the Seed stage, the startup begins its first official round of equity funding. During this stage, the startup receives funding that is allocated towards market research, product development and recruiting — initial steps of the company. Upon receiving seed funding, the startup is now able to finalize its target market, and determine its final product line-ups. The median seed round investment was $1 million in 2020. However, seed funding can vary significantly, ranging from $10,000 to up to $10 million for a startup.


Potential investors in this stage include: founders, friends, family, accelerators, Angel Investors, and (VCs) Venture Capitalists. Angel Investors are a main player in the seed stage, by expecting an equity stake in the startup in exchange for investment, or funding. Generally, Angel Investors lean towards funding startups that carry higher risks to succeed, hence their haloed-guardian classification in their name.


Series A

Upon reaching the Series A stage, the startup has completed product development and will now offer a preferred stock to potential investors. In the Series A stage, the startup receives mainly Venture Capital (VC) financing. Companies entering Series A fundings are expected to have a well-organized business model, long-term revenue streams, and strong strategies for growth. Series A rounds raise approximately $2 million to $100 million, with a median of $10 million especially for startups in the high tech space.


Potential Investors in this stage include: Traditional Venture Capital (VC) firms and Angel Investors. US-based firms include Sequoia Capital, Bain Capital Ventures and GV (Google Ventures). Canada-based firms include BDC Venture Capital, Omers Capital, and Timia Capital. Angel Investors may also invest in the Series A stage, but will have less influence compared to earlier stages as the startup is supported by more firms and investors. Typically there will first be an anchor investor, who will then help bring in additional investors.


An easy to understand Series A funding round is to imagine the startup cycle as a seed prospering into a tree. After the seed round, when the seed is planted in soil, the plant begins sprouting as it receives more water, sunlight and nutrients — Venture Capital funding needed to grow and develop the startup.


Series B+

Startups at the Series B+ stage have completed the product development stage, and are now looking to expand their market reach. Having already completed the Series A stage, Series B+ startups have successfully established a large user base, proving to investors that they have the capability to grow and meet increasing demand. Series B+ companies have high valuations ranging from $30 to $250 million, proving to investors that they are ready to reach the next level.


Types of potential Investors in the Series A stage remain in the Series B+ stage, since both stages engage in the same investment process. However, the difference between the two is that a new cohort of firms and investors will come in at the Series B stage, who are more specialized in later-stage investments.


Finally, in the Series C stage and later stages, the former startup, now a well-established company, looks for additional investments to help with research and development, expanding into new markets and acquiring other companies. The purpose of Series C stage funding is to scale the company quickly and efficiently, allowing it to reach new heights and hopefully IPO shortly after that.




Top Canadian Accelerator Programs:


The Founder Institute (Vancouver, Montreal, Toronto)

Founded in 2009, The Founder Institute is the world’s most proven network to turn ideas into fundable startups, and startups into global businesses. To date, the FI has helped launch over 6,000 companies across 200+ cities and six continents — with three locations in major Canadian cities. The FI’s accelerator program helps pre-seed entrepreneurs gain traction and funding by establishing a critical support network of local industry experts that are invested in their success, and by providing a structured and challenging business-building process that has helped FI alumni raise over $1.75 billion.

Stage: Pre-Seed

Industries: Technology - Various Applications


Creative Destruction Lab (CDL) (Vancouver, Montreal, Toronto)

With 12 locations globally and 3 locations in major Canadian cities, Creative Destruction Lab (CDL) is a nonprofit organization that delivers an objectives-based program for massively scalable, seed-stage, science- and technology-based companies. With a portfolio of startups covering a diverse range of industries, CDL operates 20 streams — AG (Agricultural Tech), AI, Blockchain, Climate, Commerce, Computing, Digital Society, Energy, FinTech, Health, Manufacturing, Matter, Oceans, Prime, Risk Management, Space, Supply Chain, and Web3.

Stage: Seed Stage

Industries: Technology - Various Applications


Expa (Vancouver, San Francisco, New York, Los Angeles, London)

Providing more than just capital, Expa backed startups access a global community of founders, startup resources, funding, and personalized support from Expa network of operators, passionate founders will receive the necessary resources to build revolutionary, tech-enabled companies. Besides Expa Venture, Expa studio, a founding partner, works with visionary founders by providing additional hands-on guidance with branding and positioning, product design and development, and fundraising for future rounds.

Stage: Pre-Seed, Seed Stage

Industries: Technology - Various Applications


Next Canada (Nationwide)

Next Canada is Canada’s strongest and most committed entrepreneurial network made up of 500+ top Canadian academics, industry experts, investors and founders. As a not-for-profit organization, Next Canada provides access to this powerful network at almost no cost to the entrepreneurs. Relying on the generous support of donors, corporate partners and government funding, Next Canada provides access and accelerates the next generation of entrepreneurs. With three programs — Next AI, Next 36 and Next Founders, Next Canada provides support to startups in various industries, with a focus in technology.

Stage: Pre-Seed, Seed Stage

Industries: Technology - Various Applications


TechStars - Canadian Regional Locations (Toronto, Montreal)

With regional locations in Canada, TechStars is a global firm that provides investment opportunities and accelerator programs for founders with great ideas. Since its launch in 2006, TechStars has invested in 3,000+ startups, and selects 500+ early stage startups annually. TechStars mission is to make innovation accessible to everyone and everywhere, by connecting startups, investors, corporations and cities to create a more sustainable world.

Stage: Pre-Seed, Seed Stage

Industries: Technology - Various Applications




Top Quebec Accelerator Programs:


adMare BioInnovations

As Canada’s leading life sciences innovation center, adMare BioInnovations uses its scientific and commercial expertise, specialized R&D infrastructure, and seed capital to build strong life sciences companies, robust ecosystems, and industry-ready talent. Focusing on long-term sustainability, AdMare BioInnovations re-invests its returns back into Canadian industries.

Stage: Pre-Seed, Seed Stage

Industries: BioTech, Life Sciences


CEIM

The Center d'entreprises et d'innovation de Montréal (CEIM) is a major entrepreneurial ecosystem that has contributed to the development of more than 425 companies. Focusing on innovative technology, CEIM supports entrepreneurs pursuing innovative projects by providing them with a wide range of adapted services so that they can get started in the best conditions and ensure the viability of their projects over the long term.

Stage: Pre-Seed, Seed Stage

Industries: Manufacturing Technologies, CleanTech, New media, Life Sciences


Centech

Centech is a world-class business incubator and accelerator based in Montreal, specializing in deeptech & MedTech companies with high growth potential. Since 2018, Centech has had its open innovation lab, Collision Lab, where large corporations are supported to integrate technology projects thanks to the agility of startups and the entrepreneurial ecosystem.

Stage: Pre-Seed, Seed Stage

Industries: Deeptech, medtech, manufacturing, telecoms and microelectronics


CEuMontreal

The Entrepreneurship Center of the University of Montreal (CEuMontreal) is a non-profit organization whose mission is to develop an entrepreneurial culture and innovation at the University of Montreal while providing concrete support to entrepreneurs. CEuMontreal opens its doors to students, graduates, employees, and researchers interested in the creation of science and technology enterprises.

Stage: Pre-Seed, Seed Stage

Industries: Science and Technology


Campus des Technologies de la Santé (CTS)

Based in Montreal, Campus des Technologies de la Sante (CTS) is a growth accelerator specializing in innovative healthcare technologies and digital health. Responding to the particular challenges and individual needs, CTS-backed startups receive strategic coaching to secure financing, effective commercialization tools that will help them succeed across Canada and internationally, and an introduction to their dynamic ecosystem of key medical and business players.

Stage: Pre-Seed, Seed Stage

Industries: Healthcare/HealthTech


Cycle Momentum

Cycle Momentum offers accelerator and open innovation programs bringing together an international community of entrepreneurs, investors and innovations. With 75+ accelerated companies to date and a mission to enable entrepreneurs, investors, and companies to find innovative solutions to humanity’s major ecological challenges, Cycle Momentum specializes in startups in cleantech and sustainability.

Stage: Pre-Seed, Seed Stage

Industries: Clean Energy, CleanTech, Urban Tech, Water Technology, Green Chemistry, Agricultural Tech


Defi Montreal

Defi Montreal is Quebec’s largest community for accelerating high-growth innovative companies with 750 graduates since 2008 and more than 75 companies supported each year. Companies backed by Défi Montréal benefit from support from a large network of successful entrepreneurs, experts and investors who share their experience to transmit the skills and tools essential to financing, business development and growth.

Stage: Pre-Seed, Seed Stage

Industries: Technology - Various Applications


District 3

Based at Concordia University in Montreal, District 3 fosters and develops multidisciplinary startup teams that use emerging tech to create businesses with global impact by focusing on four core streams — bio, healthcare, high tech and social innovation. Harnessing The Power of 3: Innovation, Collaboration, Entrepreneurship, District 3 offers the most rigorous training, bridging the knowledge, skills, and resource gap between building a product and building a company.

Stage: Pre-seed, Seed Stage

Industries: Biotech, Agricultural Tech, MedTech, HealthTech, HighTech and Disruptive Technologies, Social Impact - Education, Environment, Health, Arts and Culture


Startup en Residence by Desjardins

Designed to guide early-stage, growth-driven companies, Desjardin’s startup en residence accelerator program invests and provides support for startups that have a positive socio-economic impact within Canada. By viewing disruptors as potential partners instead of competitors, Desjardins strives to bring capital, experience, and reach to take the best innovations and mainstream them faster. For its 2022 cohort, Desjardins is focusing on companies applying technology to financial, insurance, real estate, cybersecurity, data science and AI, healthcare, and risk management industries.

Stage: Pre-Seed, Seed

Industries: Fintech, Real Estate Technology, Data Science and AI, Insurance Technology, Cybersecurity, Risk Management Technology


La base entrepreneuriale at HEC Montréal

Affiliated with HEC Montreal, La base entrepreneuriale offers two incubation programs, EntrePrism and Parcours Rémi-Marcoux, as well as an acceleration program, the National Bank Accelerator. As HEC Montréal's digital innovation hub, La base entrepreneuriale takes an inclusive approach to help entrepreneurs develop their full potential as business leaders. To date, La base entrepreneuriale has supported 350+ startups of various industries and backgrounds.

Stage: Pre-seed, Seed

Industries: Various


Esplanade

Based in Montreal, Esplanade supports entrepreneurs who focus on innovations creating social and environmental impact in our world. Esplanade values the impact of entrepreneurs, who seek to scale through their entrepreneurial motivations tackling the world’s pressing issues as a solution for accelerating the socio-ecological transition. Ventures backed by Esplanade are placed in one of the following three streams — Food Systems, Environment and Climate Change and Community Health.

Stage: Pre-Seed, Seed Stage

Industries: Social Impact and the Environment Food Systems, Environment and Climate Change, Community Health


Tandem Launch

From 2010,