Inside the Labyrinth: Connecting Innovators to Risk Capital

The Conference Board of Canada, July 18, 2017
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The objective of this report is to improve the efficiency of the innovative start-up fund raising process by educating investors and investees about the process. It also suggests ways that the Conference Board’s Centre for Business Innovation (CBI) could improve innovation finance through the development of tools and templates for entrepreneurs.

Document Highlights

Connecting Innovators to Risk Capital analyzes the process of funding innovators through risk capital, and provides guidance to innovators on the best way to access funding. The report also suggests ways in which the Centre for Business Innovation (CBI) of The Conference Board of Canada could improve innovation finance through the development of tools and templates for entrepreneurs.
The objectives of this report are to:

  • inform innovators about the nature of risk capital funding;
  • provide guidance to innovators on the best way to access funding;
  • illuminate the investment criteria used by risk capital providers;
  • provide concrete examples of the risk capital funding process;
  • walk innovators through the process of due diligence and deal closing;
  • suggest how the Centre for Business Innovation could help improve the process through tools and templates.

The report mentions that the next phase of CBI’s future work plan (CBI 2.0) will seek to improve innovation policies and practices through a direct engagement strategy.

Table of Contents

EXECUTIVE SUMMARY

Chapter 1–Introduction

  • Method
  • Guide to the Report

Chapter 2–The Risk Capital Landscape

  • The Risk Capital Landscape
  • Why External Funding?
  • Funding Options
  • Angels and Venture Capital: Key Differences
  • The Process
  • Conclusion

Chapter 3–The Capital Perspective

  • The Risk Capital Landscape
  • Why External Funding?
  • Funding Options
  • Angels and Venture Capital: Key Differences
  • The Process
  • Conclusion

Chapter 4–The Investee Perspective

  • When to Seek External Funds
  • Advantages and Disadvantages
  • Going Through the Process
  • Overcoming Challenges
  • Conclusion

Chapter 5–Implications

  • Initial Vetting
  • Pitching
  • Due Diligence
  • Term Sheets
  • Closing Expertise
  • Conclusion

Appendix A–Bibliography

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