Start-ups offer many benefits that make them desirable, but are Canadians willing to do more to fund start-ups? Start Me Up: Funding Canada’s Emerging Innovators is one of several Centre for Business Innovation reports on capital markets and innovation finance. The report focuses on the unique case of financing innovative start-ups. It develops a framework for understanding the particular challenges of start-up finance. As well as considering the demand for start-up finance in Canada, the report considers strengths and weaknesses in Canada’s financial system related to funding innovative start-ups. It also makes suggestions for improving early-stage innovation finance.

The report will be of interest to four audiences: Canada’s innovative companies; the finance community; intermediaries that facilitate deals; and government policy-makers seeking to understand their role.

Executive Summary

Résumé

Chapter 1—Introduction

• About This Report

Chapter 2—Start-Up Funding Needs

• Defining a Start-Up
• Start-Ups Innovate
• Start-Ups Are Risky
• De-Risking the Business
• Use of Risk Capital
• Estimating the Number of Start-Ups and Their Capital Needs
• Picking the Right Capital Structure
• The Payoff
• Conclusion

Chapter 3—Risk Capital in Canada

• The Nature of Risk-Adjusted Returns
• The Booms and Busts of Early-Stage Finance
• Doing the Rounds
• Funding Channels
• Conclusion

Chapter 4—Improving Canada’s Risk Capital Market

• Develop Start-Up Investment Opportunities
• Draw in More Risk Capital
• Do a Better Job of Matching
• A Vibrant Finance Market
• Conclusion

Chapter 5—Implications

• Innovators: Improved Management Will Attract Risk Capital
• Financiers: Scale Up and Connect
• Intermediaries Can Help Improve the Ecosystem
• Government Can Kick-Start a Better Innovation Capital Market

Appendix A—Bibliography