Our Managing Partner, Eva Lau was recently named CDL Montreal’s Associate of the year. Eva has been participating in CDL’s supply chain, blockchain, AI, health, and prime streams across 3 locations: Montreal, Toronto, and Atlantic. Since 2016, Eva has been able to mentor and support entrepreneurs from across the country who are revolutionizing and reimagining the way we socialize, commute, work, play, and live. Many of our portfolio companies including Benchsci, Ada, Sheertex, and Pngme are CDL alumni. This certainly attests to the calibre of talent in the startup pipeline at CDL. From its highly curated group of mentors and associates that are massively successful in their respective fields, to the motivated founders who apply to the coveted program streams, CDL is a great example of how powerful the incubator/accelerator model can be when executed well.
Many early-stage founders often consider applying to incubators or accelerators (hereby referred to as IAs) but find it difficult to decide which one to approach or whether to approach one at all. It’s important to remember that not all incubators and accelerators are made equal. It’s important to do your research and ask yourself where you are in your journey as a founder, and what kind of value can you drive from these models.
We’ve distilled some of the key factors you should consider below:
What stage of the startup life cycle are you on?
It’s important to understand where you are on your entrepreneurial journey before considering applying to an IA. Many of these organizations vary in terms of the type of startup they cater to. Some focus on offering support to super early stage founders, some are made for later stage companies, and others focus on everywhere in between. As a founder, do you need support understanding the very early stages of running a company? Do you need help with incorporation, finding a co-founder, and learning about venture funding? Then an incubator or accelerator that is focused on early stage companies will be important. If you have a team, an MVP (minimal viable product), some preliminary traction, then you can consider applying to the vast majority of incubators/accelerators. Knowing where you are will be part of learning where you need to be and finding an incubator or accelerator that aligns with your growth phase will be crucial. Generally, university-based programs will focus on early stage incubation and offer early entrepreneurs basic education on the journey ahead. Programs that focus on later stage companies on the other hand, tend to prioritize growth objectives, investment exposure, and networking opportunities.
Understand the cost of participating
Not all IAs are free. Whilst CDL is both free and not equity based, other prominent programs such as Y Combinator take up to 7% of your company upon investment. It’s important to research the real cost of participating in these organizations and gauge whether it will be worth it for you and your company. Some IAs will invest in your company in exchange for some equity. It’s important to keep that in mind as you begin on your funding journey as dilution can become quite an issue later on if you do not make wise earlier decisions. You should also understand the breadth and depth of the work that is involved in going through a program. Meeting with mentors on a regular basis and achieving goals in a relatively short period of time, for example. Understand what it means to truly participate and commit to a program.
What type of support and mentorship do you require?
Depending on the nature of your startup, you may need access to specialized facilities or equipment. Whilst the vast majority of IAs lack these, some are more niche and offer participants access to on site labs and machines. For example, Velocity offers startups access to $2 million worth of specialized equipment as part of its PerkinElmer Lab. It’s important that the IA you choose aligns with your product and platform.
IAs are an invaluable asset to the Canadian innovation ecosystem. The quality and calibre of support, resources, and mentorship is next to none. Incubators and accelerators can catalyze crucial milestones for budding entrepreneurs and veteran founders alike. It’s important to understand the value of these organizations as they pertain to your unique business model and life-stage. Whilst participating in these programs is not a sure fire win, many founders benefit from immersing themselves in these innovation hubs.
We’ve curated a list of IAs and tech hubs that we have collaborated with before or ones that we believe produce a strong roster of startup alumni:
- Ryerson DMZ
- Ryerson Legal Tech Zone
- NEXT Canada, NEXT AI
- 500 Startups
- Propel ICT
- Holt Xchange
- Entrepreneur First (EF)
- Schulich Startups at York University
- The Entrepreneurship Hatchery at U of T Engineering
- Planet Hatch in Fredericton
- Liftoff Capital in Moncton
- Founders Boost
- Highline Beta
- Technology Management & Entrepreneurship at The University of New Brunswick
- Plug and play tech center
- Banff Spark Accelerator for Women in the Business of Media
- New chip
Suggested further reading:
Is Joining a Business Incubator or Accelerator Always a Good Thing?
Incubators vs Accelerators: How to choose the right one
150 incubators and accelerators in Canada