Funding Options for Ontario Startups

Every source has a price. Some take repayment, some take equity, some take rights in what you build, and some only take the time of the person who could have been selling.

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Grants & ContributionsAdvisor-LedTax IncentivesLoans & Equity

Non-dilutive does not mean free. Contribution funding is usually reimbursed after you spend, often restricts what you may claim, and may attach terms about who owns what the money helped create.

Who does this work. Lexaltico LLP’s government funding and grants service is led by Mitch Parmasar, who is not a lawyer and does not provide legal advice. Where a matter calls for legal advice — a funding agreement, a governance question, a repayment demand — it is handled by a lawyer at Lexaltico LLP. The firm is responsible for all of the work described on this page.

Quick Answer

What funding is available to startups in Ontario?

Five categories, with genuinely different costs. Grants and contributions, which are competitive, deadline-driven, and usually reimburse costs after you incur them. Advisor-led innovation funding, principally NRC IRAP, which has no deadline and is entered through an assigned advisor. Tax incentives, claimed through a tax filing rather than applied for. Loans, repayable regardless of how the business does. And equity, which costs ownership. Most startups are candidates for some and not others, and the useful question is which are realistic now.

Ontario law · Lexaltico LLP, Toronto · introductory call

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THE CATEGORIES

Five Sources, Five Different Prices

A grant is not repaid if conditions are met. A contribution reimburses a share of eligible costs after you incur them. Advisor-led funding such as NRC IRAP has no intake or deadline; the route in is an Industrial Technology Advisor, reachable on 1-877-994-4727. A tax incentive is claimed in a tax filing, is not competitive, and generally involves an accountant. Loans and equity are the priced options: one takes repayment, the other ownership.

Founders often pursue the first category exclusively because it sounds free. It is the most competitive, the slowest and the most administratively demanding of the five, and for a company with no trading history it is frequently the least available.

THE HONEST PART

Non-Dilutive Money Still Costs Something

Contribution funding is usually reimbursement, so the company funds the activity and recovers a share later, which is a cash-flow cost. Eligible-cost categories are narrower than founders expect and commonly exclude internal time, equipment and anything spent before approval. The agreement brings reporting, record-keeping and audit obligations.

And the largest hidden cost is founder time. Preparing applications, assembling claims and reporting takes weeks of the person whose attention the company most needs elsewhere. That is a real price and it belongs in the decision.

WHAT IS REALISTIC EARLY

Very Little Depends on Having No History

Most business programmes ask for incorporation, a place of business here, and often a filing or revenue history. A company formed last year cannot supply the last of those, and no explanation substitutes for statements.

What does not depend on history: advisor-led funding, which assesses the project and the team; municipal, regional and accelerator support; and tax incentives, which turn on what work was actually done rather than on how long the company has existed. That is the realistic early list, and it is shorter than the internet suggests.

THE IP QUESTION

The Clause That Can Cost More Than the Money

For a company whose value is its technology, the intellectual property terms in a funding agreement can matter more than the amount. Terms range from silence, through a licence back to the funder, to publication requirements or restrictions on assigning the technology — which surface again during due diligence on a sale.

Read that clause before signing. A contribution of a few tens of thousands taken on terms that give somebody rights in the core asset is the most expensive money a startup can accept, and it is usually negotiable before signature and never after.

SEQUENCING

Some Choices Close Others

Order matters. A publication requirement can foreclose a patent. An agreement restricting assignment can complicate an acquisition. Grant funding used to build something the company does not clearly own — because contractors never assigned their copyright — becomes a diligence problem at the next raise.

None of that is a reason to avoid non-dilutive funding. It is a reason to know what each source constrains before taking it, because the constraints outlast the money.

WHAT TO DO FIRST

Get the Company in Order

The work that makes every option easier is the same work: proper incorporation, a clear share structure, a bank account in the company’s name, filings on time, written assignments from everyone who built anything, and records of what was done and when.

That is unglamorous and it is the difference between a company that can take an opportunity when it appears and one that spends the window fixing paperwork.

HOW WE WORK

What Lexaltico Does for a Startup

The useful first conversation is which of the five categories the company is actually a candidate for now, what each would cost in cash flow, administration and rights, and what to put in place so more becomes available.

Programme fit and applications are led by Mitch Parmasar, who is not a lawyer. Incorporation, the share structure, contractor assignments, the funding agreement and its intellectual property terms are handled by a lawyer at Lexaltico LLP. We are not financial advisors and do not advise on whether to raise equity. Fees are quoted and agreed in writing before work begins.

Common Questions

Frequently Asked Questions

What funding is available to startups in Ontario?

Grants and contributions, advisor-led innovation funding such as NRC IRAP, tax incentives, loans, and equity. They have genuinely different costs and eligibility.

Is non-dilutive funding free?

No. Contribution funding is usually reimbursed after you spend, restricts what you may claim, brings reporting and audit obligations, and consumes founder time.

Can a company with no revenue get funding?

Some. Advisor-led innovation funding assesses the project and team rather than statements, and tax incentives turn on the work done. Most contribution programmes want a filing history.

What is the difference between a grant and a loan?

A grant is not repaid if conditions are met; a loan is repaid regardless of how the business performs.

Does taking a grant affect a future funding round?

It can, if the agreement restricts assignment or the company cannot clearly show it owns what the money built. Both are diligence issues worth avoiding in advance.

Who owns what we build with the funding?

It depends on the agreement, and for a technology startup this can matter more than the amount. Read the intellectual property clause before signing.

Should we hire a grant consultant?

Sometimes. Ask exactly what will be done and what it costs, in writing. Nobody can promise funding, and there is no inside track to a government programme.

What should we do before chasing funding?

Proper incorporation, a clear share structure, a company bank account, filings on time, written IP assignments, and records. That is what makes every option easier.

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Our lawyers offer an introductory call for most matters. Call, email, or book online. Do not sign anything before speaking with us.

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A few questions about your government funding & grants matter optional

None of these are required and your enquiry sends without them. They let the lawyer read your situation before the call rather than during it.

What kind of organisation is it? optional

Where are you with it? optional

Is there an application or response deadline? optionalMost funding programmes close on a fixed date and do not reopen, so tell us any date you have.

Which programme, if you know it? optionalFor example SR&ED, IRAP, CSJ, or an Ontario or municipal grant.

Please do not send confidential documents or details through this form. We will ask for what we need once we have spoken and confirmed we can act for you.

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