CED support for incubators and accelerators 2024–2028 - Call for proposals

Application Guide

Overview

Canada Economic Development for Quebec Regions (CED) supports entrepreneurial development and the scale-up of startups that stand apart as a result of their wealth‑creating innovations and their impact on society and the environment. The innovation ecosystem in which these businesses operate influences their development and can help them reach their full potential, which is why CED supports incubators and accelerators that foster the growth of these talents and innovations.

This call for proposals aims to support, over the next four years (2024–2028), funding requests put forward by organizations whose primary mission is to provide incubation and acceleration services for tech and innovation startups, including impact businesses (see definitions in section Key definitions), which generate benefits in the various regions of Quebec.

CED will invest $16 million over 4 years (2024–2028) in organizations that meet the following criteria (see section Criteria for detailed explanations):

Level of service excellence
Partnerships and collaboration with other ecosystem players
Results achieved in recent years
Alignment with CED priorities, including sustainable development and equity, diversity and inclusion; and with sectors that have strong growth potential or are likely to have a significant impact in Quebec
Reasonableness of the costs and the relevance of the financing package
Benefits in the regions of Quebec*

*Special consideration will be given to additional benefits in the regions of Quebec – e.g., benefits such as:

improved access to the expertise of incubators and accelerators in the regions of Quebec;
a response tailored to local and regional needs or that maximizes initial sales in Quebec’s regions; or
support for local organizations that help startups by sharing tools and assisting with capacity-building.

Given the importance of this criterion, applicants will need to submit a strategy for implementation in the regions, e.g., a demonstration of existing partnerships for referral or joint support purposes, or concrete steps taken to establish such partnerships. CED will ensure optimal coverage of the various sectors and regions, as well as the complementarity of the projects receiving funding.

Incubators and accelerators that meet the eligibility criteria set out in this guide are invited to apply for funding for their projects. All applications must be received by CED by 12:00 p.m. (ET) on May 9, 2024.

Objective

CED has been funding the innovation ecosystem that supports startups for many years now. To increase the efficiency, equity and transparency of application processing, and in line with evolving regional development needs and ecosystem transformations, a call for proposals has been launched for funding applications from organizations whose primary mandate is business incubation and acceleration. Organizations that are not selected will not be eligible for CED funding for the same activities in future years.

This CED process targets incubators and accelerators whose primary mission is to provide incubation and acceleration services for tech or innovation startups with strong scale-up potential. CED also aims to ensure that the support provided by these services generates significant benefits in the various regions of Quebec, in keeping with its regional economic development mandate.

Key definitions

Startup: CED defines startups as young (generally less than five years old), innovative and often tech businesses with strong scale-up potential. They attract investor interest and transform the way things are done through their business models and the new ideas they bring to market. Startups can also include impact businesses.
Impact business: A business whose mission, business model and activities address social or environmental issues.
Incubator: Business incubators are organizations that offer long-term programs to provide young, innovative businesses demonstrating high scale-up potential (startups) with access to coaching, mentoring, investors and other forms of support, to help them get established. In addition, incubators usually provide startups, including impact businesses, with access to logistical and technical resources, training and shared office space.
Accelerator: Business accelerators are organizations that offer short-term programs that provide startups with access to intensive mentoring, investors and other forms of support to help them grow and develop their markets. Businesses that use accelerators are typically startups that have moved beyond the earliest stages of getting established; they are autonomous, but require guidance and peer support to scale up.

Eligibility

Eligible organizations

To be eligible, incubators and accelerators must:

be non-profit organizations (NPOs) that can demonstrate that they are currently operating in Quebec and that their head office is located in Quebec; and
have a primary mission of providing incubation and acceleration services for startups (tech or innovation startups, including impact businesses, with strong scale-up potential).

Eligible activities

Eligible activities are activities carried out by incubators or accelerators to foster the scale-up, innovative capacity and international competitiveness of startups. The proposals will also have to demonstrate the impact that the incubators and accelerators will have in the various regions of Quebec, e.g., easier access to their expertise and services, or a response to identified local and regional needs.

Eligible activities can include:

consulting and support services
support for the design of new products and services, or improvements to existing products and services
technology or knowledge transfer
intellectual property training, information and support
strategy development (studies, diagnoses and action plans)
networking activities and business contacts
strategic information services
managerial capacity development
support activities for prototyping, proof of concept, demonstration, commercialization and technology showcases for startups (excluding direct costs for the startups)

Other activities may be authorized on an exceptional basis if they are deemed relevant and essential to the realization of the proposal submitted and the achievement of CED’s objectives.

Eligible costs

To be eligible for funding under this initiative, costs must be directly related to the activities covered by the proposal, incurred during the course of these activities, and deemed reasonable and essential for their implementation. The main types of costs are:

Wages associated with eligible activities
Consulting fees
Travel expenses
Other costs incurred to carry out the eligible activities

The cost eligibility date in the event of a positive response from CED will be August 1, 2024. Costs incurred before this date will not be eligible for funding.

Ineligible costs:

Establishment of a fund to finance business projects
Debt refinancing
Amortization expenses
The purchase of assets at a price that exceeds fair market value
Goodwill
All non-essential costs not directly related to the proposal

Funding

The call for proposals has a budget of $16 million over four years, i.e., up to July 31, 2028.

The maximum amount of assistance per organization and per proposal is $500,000 per year, for a maximum of $2,000,000 over four years. The minimum amount of assistance is $100,000 per year. CED may provide a different amount of funding than that requested.

Assistance rate

The assistance rate may represent up to 75% of eligible costs.

The stacking of government assistance (from federal, provincial or municipal governments or government-funded organizations) cannot exceed 90%.

Evaluation process

To apply for funding, please complete the online form and attach the requested documents. It is important to demonstrate that the proposed activities and the organization meet the criteria set out in this section.

Criteria:

Level of service excellence
Partnerships and collaboration with other ecosystem players
Results achieved in recent years
Alignment with CED priorities, including sustainable development and equity, diversity and inclusion; and with sectors that have strong growth potential or are likely to have a significant impact in Quebec
Reasonableness of the costs and the relevance of the financing package
Benefits in the regions of Quebec

Level of service excellence

This call for proposals targets high-performance incubators and accelerators that demonstrate an exemplary level of excellence in their service offering. The support these organizations provide for startups must be significant in terms of time and quality, and must take place over a period of several months. In addition, the startups that receive assistance will be subject to a robust selection process.

The funding request (project plan) should present a detailed account of this service offering, taking into consideration the following elements, which will be evaluated:

The effectiveness of the organization’s business model, and the stringent selection and evaluation process to which recruited startups will be subject
The reputation and quality of the incubation and/or acceleration programs being provided to address the startups’ specific needs
The experience and competence of the organization’s full-time management team
The capacity to provide intensive coaching and mentoring for entrepreneurs, given by a qualified, experienced and agile team of specialized coaches
Access to financing for startups, with corporate partners acting as investors, sponsors or first customers
Synergies with research and innovation centres
Geographical coverage, i.e., the regions where the service is provided
Quality of the facilities/equipment (for incubators only)
The distinctive aspect of the organization and its contribution to the ecosystem enhancing the service offering

Although not all the elements listed above need to be met for an organization’s application to be considered, they will be used in the analysis and prioritization of applications received. The project plan must therefore clearly indicate how the organization and the proposed activities comply with these various elements. (Add a text box; applies to all criteria)

Partnerships and collaboration with other ecosystem players

The innovation ecosystem that supports startups has a wealth of resources, but can be complex owing to the number of players involved. Applications will be assessed based on the organizations’ capacity to demonstrate in concrete terms how they collaborate with other organizations and develop partnerships that are essential to startups. The following points will be considered:

The organization's capacity to work closely with other players in the innovation ecosystem (universities; venture capitalists; major contractors; consortiums; research, innovation and technology transfer centres, etc.)
Regional roots, i.e., ties with local and regional economic development organizations that are on the front line in the regions, to promote access to the service offering, if applicable
The number of official partnerships that have been established and are active

Results achieved in recent years

For the purpose of measuring the benefits they generate, applicant organizations are invited to submit five success stories about innovative businesses that were supported by the incubator or accelerator, and where the support provided had a major impact on the businesses’ development. Applicants must submit a detailed description of the support provided and the benefits for the businesses. CED may contact these businesses to verify the information provided.

Applicants are also invited to complete the performance grid, which allows for a comparison of applications received based on results achieved, including the:

number of businesses that received assistance;
average number of hours of coaching and mentoring per business;
number of jobs created and maintained by the businesses that received assistance;
total sales generated by the businesses that received assistance;
total funding received by the businesses that were assisted, and average per business; and the
survival rate of the businesses that received assistance.

Alignment with CED priorities

Through the funding it provides, CED is aiming for a more inclusive and sustainable economy. Besides fostering economic growth, startups are also transforming the way we do things and see the world. Applications will therefore be evaluated on the basis of the proposed activities’ contribution to these priorities within the framework of CED’s regional development mandate, and must include a description of measures taken to ensure:

support for innovative and tech businesses, with a view to promoting a greener, more inclusive economy (type of businesses supported);
support for impact businesses;
the promotion of equity, diversity and inclusion (EDI), with a view to increasing support for startups led by members of under-represented groups;
the application of sustainable development principles; and
the development of key sectors in Quebec’s regions

Reasonableness of the costs and the relevance of the financing package

The reasonableness of the costs and the relevance of the financing package will be measured through a consideration of the following aspects:

Detailed and adequate description of the expenses and revenues of the proposed activities
The organization’s financial situation and viability
Strategy to generate revenue to maintain and increase the current level of support for startups (capacity to generate funds and diversify funding sources)
Incentive nature of the assistance
Impact of the activities covered by the proposal vs. funding requested

Benefits in the regions of Quebec

The anticipated regional impact of the proposed activities, including the expected economic benefits, must be described in detail in the project plan, which must include projections regarding:

the number of businesses supported with the additional funding and the services provided (four years);
the number of jobs created and maintained by these businesses (total four years);
annual sales generated by these businesses at the date of completion of the activities covered by the proposal;
the total amount of financing received (capital raised by various sources) by these businesses at the date of completion of the activities covered by the proposal; and
any other impact that measures the tangible benefits of the organization’s activities in terms of regional development.

Geographical coverage

Particular consideration will be given to proposals that generate additional benefits in the regions, such as:

improved access to the expertise of incubators and accelerators in the regions of Quebec;
a response tailored to local and regional needs, or that maximizes first sales in the regions, contributing to the technological enhancement or innovation potential of the regions; or
support for local organizations that help startups by sharing tools and assisting with capacity-building.

Given the importance of this criterion, applicants will be required to present a concrete strategy for implementation in the regions, e.g., a demonstration of existing partnerships for referral or joint support purposes, or concrete steps taken to establish such partnerships.

Submitting a funding request

Required documents

The application form and requested documents must be submitted by 12:00 p.m. ET on May 9, 2024, via the CED Client Space. Only the authorized person can complete and submit the funding application. The authorized person:

can enter into a legally binding commitment on behalf of the client by approving official documents such as the contribution agreement, the amendment letter, the client’s declaration and the claim certificate; and
may be an administrator registered with the REQ, such as the president, vice‑president or secretary, or
any other individual within the business or organization who has been authorized to act on behalf of the client by virtue of a mandate letter, board of directors’ resolution or internal delegation of authority.

A complete file must include the following:

The application form, duly completed and submitted by the authorized person.
The organization’s financial statements and annual reports for the previous two years.
The proposal outlining the project (project plan), which should be in Word format and no longer than 10 pages, appendices not included. The proposal must demonstrate how the project meets the evaluation criteria in the call for proposals, and must include the following sections:
- Background
- About the organization
  - Positioning of the incubator or accelerator in the Quebec startup support ecosystem
  - Service offering and collaboration (see sections Level of service excellence and Partnerships and collaboration with other ecosystem players):
    - Business model; recruitment and selection processes
    - Programs offered
    - Management team and coaches
      - Include the CVs (no more than one page long each) of the members of the management team and five mentors in the organization’s network
    - Partnerships and collaboration with other ecosystem organizations (universities, major contractors, funding bodies, etc.)
    - Geographical coverage and regional roots
    - Facilities/equipment
  - Economic impact to date (see section Results achieved in recent years):
    - Five examples of incubated businesses, or businesses that have graduated
    - List of all the businesses supported over the past two years
  - Description of the proposed activities, including a detailed list of the planned activities, associated costs and the timeline for completion
  - Network, team and partners, and explanation of how they are linked to the incubator or accelerator
  - Estimated economic benefits (see section Benefits in the regions of Quebec)
  - Detailed financial package (funding sources) for the duration of the activities covered by the proposal (see section Reasonableness of the costs and the relevance of the financing package)
  - The organization’s financial forecasting for the coming year.
  - Concrete strategy for implementation in the regions (1 page long) (see section Benefits in the regions of Quebec)
  - Any other information deemed useful for the assessment of the proposal.

The performance grid.

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