Laurent’s blog

Have government programs work for you early on [startuping]

Lets start by a few facts. At the very beginning of a startup, when it’s still called a project, there is only a few ways to finance it: your pocket, your friends & family’s pocket or business angels. That should hopefully get you the minimum to get going.

Now that you have some money on the side, you already have quite a number of plans to put it to work. It will allow to hold for a few weeks or a few months, hire some help, finance yourself, mature the technology, do some marketing. But before starting to spend it, lets do what every single one of your finance buddies will tell you to do (yes, sometimes we need to listen to them). That is leverage what you have raised. Not with your bank as what you do is likely too risky for them anyway, but with your government. There are a ridiculous number of programs that our governments put in place for starting companies, big or small.

As some of you may know, Silentale is not my first startup, but it’s the first time I actually change country for doing this. And it has allowed me to asses the value and the quality of the help available. It has also helped me compare some of the programs.

One of the big drawback of those programs is that you need to 1) know about them in the first place, 2) engage in discussion to understand them, 3) deal with representatives that are there for you, but doing everything their way and 4) write an enormous amount of documents, reports and financial plans. And of course, each program has it’s own way of doing it. And realistically, do we have time to learn a new process? write all those documents? build the required relationships? That would certainly be time invested wisely as we’re getting something substantial in return but its time we just don’t have.

And that’s exactly why there is a certain number of people specializing in helping us do just that. Their day-to-day task is to understand the extend of the programs available, build relationship with representative, know the deadlines, know the status of the funds, know the fiscal impacts and more. They can pretend to such degree of knowledge because they do it on a daily basis, for more than a couple of companies and have seen quite a bit along the years. These people are NOT expensive consulting firms or companies trying to take over your business. They are often entrepreneurs themselves or ex-government employees that enjoy the dynamism of innovation. And, most importantly, they get paid through fixed rate or success fees. As a founder, can you afford not to take some extra man power?

To come back to our goal to leverage the small amounts you stashed away, with such programs, you often can double what you have, if not more. In the form of dept (for the company, guaranteed by the government) but also in the form of subsidies or tax credit (that’s can be a check when you don’t have to pay taxes).

Michel Ethier, Nexplan Expert, is an ex investor in Montreal, who has been helping me for 8 years now. Doing a tedious but essential job. A work that startups can’t afford internally, either being by lack of time or money.

As for now, Adrien Geille, Enki Consulting, has taken on the responsibility of programs’ management at Silentale to cover French and European programs. The great news for us was that programs in France and Europe are as great as the ones in Canada.