Research and Development Funding - Barriers
Research and Development funding is typically the most difficult kind of financing to raise. The most brilliant innovator may be the least interested in communicating effectively with outsiders. Non-experts in the field may find the concepts difficult to evaluate with respect to the technological barriers that must be overcome and the resources and time likely to be consumed in the process of reaching a proof of concept. Even if that is conquered, then the “less difficult” stage of reaching a practical, marketable result may still remain and require new product development funding. Timeframes may be long, and parallel developments by others may overtake before completion and delivery to market. Any flaw in a stage along the way can derail an otherwise viable concept and/or product.

Business Development Strategy: Industry Alliances
In addition to the financing options of angel investing, self funding, raising capital privately / publicly, and government / foundation grants, risk- and capital-sharing arrangements between companies may also be viable alternatives. These share the common thread of joining forces and pooling resources (financial or other), whether from suppliers, complementary industries, and/or other companies in your own industry. Familiar examples include joint ventures, informal partnerships, and licensing arrangements. Some of these might entail relinquishing some control and / or ownership of your Intellectual Property, but the benefits may well compensate. TSGI can assist with structuring these arrangements to minimize the impact on your SR&ED claim.

Industrial Development Finance
In the world of industrial development finance, there are relatively few options, and that is especially so in Canada where financial market size is already limited both in size and scope. Research and Development funding critically depends on the availability of the SR&ED program because of its neutral, rules-based nature, subject to meeting the program’s criteria.

Beyond the R & D Labs
The funding gap is especially severe during the core industrial development and pre-commercialization phases where the magnitude of funds needed is generally highest. While projects carried out in R & D labs tend to receive well-defined (although some would justifiably argue insufficient) funding, new product development funding is usually tougher to source. When a product is commercialized and stable, traditional funding sources are more likely to find the risk quotient acceptable, yet ironically the need for funding is often less critical than during the research and development funding phase. TSGI may be able to assist your company with ideas for your new product’s funding requirements that are compatible with SR&ED and IRAP funding