How Our Product-Based Start-Up Raised Over $100,000 In Seed Capital Without VCs

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Intro

Back when I started Oneiric in 2011, I had no idea how to raise money to bring life to an idea; how was I to transform a sketch scribbled on a piece of paper into a real, tangible product? I knew I’d need a patent or some sort of IP protection. I also have zero experience in product design and can’t sew to save my life. With these doubts clouding my thoughts, I knew that this endeavor would not be the inexpensive venture I had hoped for.

For the first four years, I bootstrapped to the best of my ability and worked on Oneiric while still maintaininga full-time job. The start-up was mostly self-funded,with some additional help from friends and family that would invest a few hundred dollars here and there.

It wasn’t until we had to raise $60,000 for our first order of inventory that I realized we desperately needed help. I was able to secure a few thousand from preferred investors, but needed to put a 50% deposit down in July in order to get inventory in time for the season – otherwise, we would have to wait a whole other year before launching. After scraping together most of the deposit, taking out a personal loan, and finding a last minute investor (who is a dear friend of mine), we had enough to put the deposit down. I had no idea how I was going to raise the other $30k for the second deposit, but that was a later problem.

Oneiric is a product-based business. I’m not going to sugarcoat it and call us “hardware” or say we have any technology whatsoever. We develop innovative and patented hockey base layer products that are technically designed and solve a real need. Given that we’re product-based (not a technology company, if I haven’t already made that clear) with two female founders, the chances of raising capital through angels and VC’s were definitely not in our favour.

It wasn’t until I was in a desperate position, scouring the internet for ideas on how to raise start-up capital, that I stumbled across some incredible resources that weren’t your traditional route of finding investors and securing a bank loan (where I had no collateral and was still paying off student loans.) Here’s a list of some amazing funding resources that are available to help your business. For us, we were able to use these resources to commercialize and finally, after 5 years from the idea’s inception, bring Oneiric to market. For those starting your own business, I hope you can find this list helpful.

Disclaimer: These resources are available for Ontario small businesses and start-ups only.

Pitch Competitions

Pitch competitions are well known in the start-up world now, but if you haven’t considered them, you definitely should – especially in the early stages. When we were first starting out, we won a lot. Then our curve declined pretty steeply as we gained more traction in the market. Most of the competitions I’m about to list are focused on early stage start-ups with a really great idea and some traction. The goal of these programs are to support entrepreneurs that have a difficult time accessing capital to start and launch their business.

Warning: These pitch competitions are A TON of work, so in my opinion, they are better suited for start-ups in the earlier stages. There does, however, come a point in time when you should be focusing on building your business rather than entering as many competitions as humanly possible. I get it, the allure of free money for any start-up is attractive, but it’s challenging to whole-heartedly work on the business while competing in pitches all the time. We learned the hard way and saw important business activities suffer while we were participating in pitch practice, workshops, and other activities deemed necessary by the pitch organizers. That’s when we knew it was time to cut back or stop altogether.

Here’s a list of the competitions we placed in:

Ignite Capital (Toronto)

Ignite Capital is a Toronto-based not-for-profit that gives aspiring Ontario entrepreneurs, who have limited access to capital, the opportunity to compete for funding and business support. Specifically, they have categories for youth, women, immigrants, and a new category, start me up (applicants with credit score less than 650).

Every year, the award gives out a total of $140,000 for all 4 categories in grants and micro loans.

This was an especially memorable competition because it was our first one!
We won the 2015 Ignite Capital award in the youth category. I love everything about this competition; you need to submit a comprehensive business plan, which forces you to flush out your ideas and make sure your business is viable, and if chosen, you have an opportunity to pitch for a grant and loan. We won a $10,000 grant, $20,000 loan, plus the validation that we really did have a good business idea and product that was worth continuing to pursue. The competition was very well organized and we were able to get two incredible investors on board later down the road who saw us compete that day.

Lion’s Lair (Hamilton)

Lion’s Lair tries to mimic the Dragons’ Den (or Shark Tank) version of the show for local start-ups in and around the Hamilton area and GTA. After applying online, 15 start-ups got chosen to attend a series of workshops over the course of a few months where 8 finalists were chosen to pitch to the Lions.

This competition was very well organized and I was really impressed by the whole experience. Although this competition was a lot of work, the prize package was incredible! We came in second place and won $15,000 cash, plus $10,000 in business coaching, $10,000 in website design and development, and $10,000 in marketing services.  Highly recommended!

GTAN | Start (Waterloo)

I don’t think this competition exists anymore. This competition is hosted by the GTAN Angel group in Waterloo and a majority of the audience are angel investors. We had to submit a short application online, and then pitch in front of a panel. The finalists were then chosen to compete at a final event to win 3 prizes of $10k, $5k. and $2k.

The whole process wasn’t too long, and we ended up winning first place ($10,000). We were also invited to pitch to some of the members who were interested in investing after they saw our pitch. However, to put it bluntly, it ended up going nowhere and was a waste of time.

Fierce Founders Bootcamp (Kitchener)

Disclaimer: this competition is for females only.

The Fierce Founders Bootcamp was an intensive two-week workshop for founders. One week in July then another week in August and between the two workshops, a ton of “”homework” needs to completed. In the last week, 8 founders were chosen to compete for the grand prize of $100,000 split by whomever the judges deemed deserving. To apply, you need to complete an online application, a video interview, and if you get accepted, then you get the opportunity to participate in the boot camp.

This competition is really time-consuming and a ton of work. There were some really incredible speakers and coaches during the sessions, and if you’re still in the early stages, there’s probably a lot you can take away from this. I wouldn’t recommend entering just to try to win the $100k because you will be unpleasantly surprised with the workload. However, we tied for second place and won a huge $30,000 (the most we’ve ever won in any competition). Was it worth our while? Yes, yes it was.

UYBI (Unlock Your Big Idea)– Mississauga

The Unlock Your Big Idea Pitch Competition is hosted by the RIC Centre/Sheridan College and similar to Ignite, they have 3 categories to compete in. The categories were different when we competed, but the new ones are social enterprise, technology startup, and creative industry startup. To apply, there’s an online application and a small entry fee of $25. The application process was easy and the finalists aren’t required to attend multiple workshops. There also isn’t many rounds of pitching – just the online application then the finalists are selected and notified by email. We won in the Best Innovation for Small Business category and were awardedwith $10,000.

Government Grants

This form of free money is much more difficult to find, but with the right attitude and scouring Google search, government grants are in fact out there. Sometimes I feel like they’re hidden purposely, but that’s just my own conspiracy that’s predicated upon the fact that I spent countless hours trying to find them.

CDMN Soft-Landing Program – $4,000

The Canadian Digital Media Network grant is $4,000 and allows companies to travel outside of Canada to close business opportunities or investment. The application process is quite simple; you just need to submit an application online and the team at CDMN will notify you ofyour acceptance into the program. The program runs quarterly and the staff at CDMN is always happy to give you feedback on your application before submission.

We’ve been awarded the CDMN grant two years in a row and used the grant money to travel to the US (Texas andBoston) to meet with some big retailers, and recently to Europe to meet with our distributor and some big dealers in Finland, Sweden, and Switzerland. It’s an incredible grant, is well organized, and every start-up that could benefit from business-related travel abroad should apply.

GlobalStart (OCE) – $8,000

The GlobalStart program is a highly competitive travel grant initiative to help youth-based start-ups travel globally to close sales, investment, or form strategic partnerships. You have to be part of a campus-linked accelerator (explained more below) and get a referral from a mentor. You can then open an application and begin the process.

I’ll start by saying that the GlobalStart is A LOT of work. You also have to match the funds OCE disburses 1:1. You can apply for a maximum of $30,000 ($15,000 needs to be covered by you). We had several reiterations of the application and worked with our rep at OCE, who helped us include important information that the judging panel was looking for. We had to break down very specific travel expenses for 1-2 months of travel in Europe, which took me an entire day to do. We ended up applying for $16,000 ($8,000 covered by us), but didn’t end up using the grant money because the timing wasn’t right.

Accelerators/Incubators

AC Jumpstart Program (Accelerator Centre) – Waterloo

To be eligible for the Accelerator’s AC Jumpstart program, you must be a graduate from University of Waterloo, Laurier, or Conestoga College. We were accepted into the program when we were in the very early stages of our business and it was an incredible experience. If accepted, you receive $30,000 in seed funding, incredible mentorship, introductions/connections, and other invaluable resources.

The cash was great, but the mentorship was even better. The Accelerator Centre fosters a warm, supportive environment and everyone working there genuinely wants to see you succeed. If you’re start-up is eligible, applying to his program is a no-brainer.

Starter Company Plus – Toronto

Every start-up in Toronto should apply to this program. If eligible, you receive $5,000 cash, mentorship (from an assigned mentor), and a series of weekly business workshops. I’m not sure if it’s changed, but in order to receive the full grant, we were required to complete a business plan and 1 year of milestones that we had to complete in order to receive the entirety of the funds.

Starter Company works with BizLaunch who “trains, advises and mentors entrepreneurs.” The owner, Andrew Patricio leads the sessions. Not going to lie, we were a bit apprehensive at first, but his advice is super pragmatic and he’s very inspiring. We got a lot out of his sessions and always looked forward to the following week. Andrew is very supportive; I’ve had a few phone and coffee meetings with him after the program was over. He genuinely cares about entrepreneurs and wants to see them succeed.

Fierce Founders Accelerator (Communitech) – Kitchener

After we placed in the Fierce Founders Bootcamp pitch competition, we automatically secured a spot in Canada’s first female-only accelerator. If accepted, you receive $30,000 in funding, but only if you haven’t already received funding from OCE’s StartSmart Seed Fund, AC Jumpstart or any other form of FedDev funding. We sadly didn’t get the cash for this one, but the mentorship was fantastic. Another perk (if you’re a Kitchener-Waterloo based start-up) is free desk space at Communitech.

This accelerator is again, for female founders only. Since we’re based out of Toronto, we needed to commute to and from Kitchener a few days a week for the duration of the program (they want you to fill their desk space). The organizers also sometimes expected us to participate in a workshop where we would have to drag ourselves from Toronto to do a 1-hour session then head all the way back to Toronto. This was honestly exhausting. When it came to participating in the accelerator remotely, Fierce Founders certainly wasn’t as flexible as the Accelerator Centre. For the last few months, however we plead our case about how the long commute started effecting business activity and they therefore allowed us to move several in-person mentor meetings to phone calls instead.

Conclusion

The chosen path of entrepreneurship is indeed precarious, and finding start-up funding can be extremely difficult and daunting, especially for a product-based business. It’s important to be resourceful and creative when trying to find funding opportunities, especially when the odds aren’t in your favor. There’s an abundance of other competitions, accelerators, and grants that weren’t mentioned in this article, but these were the ones that we were able to secure. Best of luck in your new venture endeavor – it’s going to be a long road, but certainly worth it.

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