Bryan Watson – a start-up “institution” joins the financial company Venbridge

Venbridge announced that Bryan Watson, a leading force in the tech startup funding community, has joined the company as senior vice president of business development.

Watson has been a passionate and tireless advocate for technology start-ups and scale-ups for nearly two decades. He has been described as an “institution”, having advised companies, investors and governments. He sits on the board of a number of start-ups and early-stage innovation companies.

He was Executive Director of the National Angel Capital Organization, CEO of Fusion, Founding Director of the Ontario Clean Technology Industry Association and, most recently, Managing Director of CleanTech North (CTN).

Watson is credited as the “chief instigator” of StartupDrinksTO, a title that suits him well. He worked passionately to advance technological innovation before many of the current support structures were in place. “I literally helped write the angel investing textbooks in Canada,” he said. “At the time, there was very little to support the ecosystem; companies or investors.

He often did the work on a voluntary basis. “Consulting for companies looking for money usually doesn’t work out very well, because guess what, they’re looking for money. They’re not looking to spend money,” he said. There were also few support structures in place when he started. His primary income came from his work as an associate at Flow Ventures, a scientific research and experimental development (SR&ED) consulting firm.

Its move to Venbridge is good news for innovative Canadian tech companies. Few people know the details of government funding programs as well as Watson, who made his living as an SR&ED consultant. This ‘day job’ funded his many voluntary activities as he started and ran a number of organisations, in his words, ‘on the side of my office’.

Watson is excited about the new role, describing it as “one new way among my plethora of ways to help businesses and build an innovation ecosystem.” Businesses across Canada will have access to his expertise and he can help them access important sources of capital.

Watson’s passion for the past few years has been clean technology and green industries. “I don’t want to sit idly by while we fry the planet and these companies are starved for capital,” he said. But it is clear that he will be interested in engaging with all companies in all sectors that qualify for SR&ED or subsidies. As he points out, “I’ve had successful claims in everything from computers to dog food!”

The funding challenge

Venbridge is one of Canada’s leading providers of corporate debt financing. Watson’s recruitment is a signal that the company is looking to grow its business.

There is a clear demand. Financing is difficult for almost every business in Canada; there is a very limited pool of angel investors or even equity investors. Even established businesses with growing sales struggle to secure bank financing, especially in times of economic uncertainty.

The only advantage Canada offers to start-up and expanding tech companies comes from government grants and tax credit programs. In technology, the largest program of its kind is the Scientific Research and Experimental Development (SR&ED) tax credit program.

SR&ED is a federal program that offers a refundable tax credit for between 15 and 35% of eligible expenditures. Provincial tax credits, ranging from 4.5% to 30%, are also available. It provides more than $3 billion in tax incentives to more than 20,000 businesses, making it the largest federal support program for business research and development in Canada. The program is administered by the Canada Revenue Agency (CRA).

The challenge for these companies is that the tax credits force the company to invest in what amounts to high-risk research and development for its entire fiscal year before it can claim the tax credit. Even after their fiscal year-end, it can take weeks or months to prepare an application, and even when it is filed, there is a delay while it is processed and possibly vetted. This is where companies like Venbridge provide bridge financing. The company often advances companies up to 80% of their expected SR&ED tax credit throughout the fiscal year, as it accrues.

Debt financing allows businesses to have immediate access to cash while waiting for government grants and tax credits. The advantage of debt financing is that it allows owners to keep their stake in their business until they have reached a certain balance sheet, and they can retain control of it, or, if they decide to sell, they do so at a much higher valuation. .

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