MaRS Discovery District has relaunched its flagship Capital Program to help keep “high-potential” startups in Canada.
The refreshed program provides selected startups with guidance from experienced venture capitalists (VCs) and founders on the fundraising process. The program prepares founders for term sheet negotiations by giving their investment documents a pass through MaRS’ in-house fractional CFO and legal teams, then connects them to a network of global investors.
“This is a program that can significantly improve the chances of companies that are trying to grow and scale staying in Canada.”
“The idea of the program is to find the top 20 to 25 seed and Series A startups from across the country, and essentially provide them a one-to-one, white-glove service through their fundraising round,” MaRS Capital program head Liam Gill told BetaKit in an interview. “[We] make sure they have a good deck, good narrative, a good strategy, and everything that would come through a [due diligence] process already, and then we actually help them with meeting investors.”
After helping the companies through their fundraising and term sheet negotiations, MaRS provides resources in the form of public relations, branding, and international expansion strategies.
Gill said he joined MaRS in July to get the program, which ended last December, back on its feet. While the old version of the program was similar, helping MaRS companies through the fundraising process, it’s now expanding across Canada and beyond MaRS’ traditional focuses on climate and healthtech.
The program, completely subsidized by federal and provincial funding, now targets companies working in artificial intelligence (AI), defence and dual-use technologies, enterprise software, edtech, and, of course, climatetech and healthtech. However, MaRS isn’t just looking for any company.
“We largely look for companies that we feel have the most likely potential of becoming an anchor company in the economy,” Gill said, referring to the unicorns with $1 billion valuations or centaurs with $100 million in revenue. The goal of the program is to help those high-potential companies stay in Canada so they don’t have to move to the United States, Gill said.
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He explained that it’s difficult to access capital in Canada, and that startups naturally reach out and potentially even relocate to the US to secure funding. The hope is that the program will instead make it easier to stay in Canada to continue working with MaRS and other local partners.
“If you’re a founder today in Toronto and you want to raise in the next three months, it’s a lot easier to focus your outreach on the [United] States than it is on Canada; that’s just the truth,” Gill said. “We can actually get you in front of a large volume of investors in Canada, and globally, which means that there is no longer that advantage of focusing on those investors in the States.”
Toronto VC firm Leaders Fund recently determined that Canada’s startup pipeline has been shrinking, with new data showing Canadian tech entrepreneurs fleeing the country at an alarming rate.
“We think that this is a program that can significantly improve the chances that companies trying to grow and scale staying in Canada,” Gill said.
MaRS is sourcing its Capital Program companies from its own portfolio, as well as from its network of VCs and government agencies, with Tydra Labs, Strello Health, and Chemshift Technologies already slated to participate in the relaunch. MaRS intends to open up Capital program applications to the general public this week.
Feature image courtesy MaRS.