Innovation Demonstration Fund (IDF) Business Plan Guide

The Innovation Demonstration Fund (IDF) is a funding program administered by the Ministry of Economic Development and Innovation that focuses on the initial pilot demonstration of innovative technologies, processes and/or products that will lead to commercialization in Ontario.

To be considered for financing, applicants must submit a completed application form and business plan.

The following guidelines suggest the types of information that should be included in the required business plan to allow for the evaluation of your financing request. Information provided should be sufficiently detailed to allow analysts to make firm conclusions. Not all of the information listed below may be applicable to a proposal. At the same time, additional information may be required depending on the specifics of the application.

Your plan should address, where applicable, the Selection Criteria as outlined in the “How are Projects Assessed?” section of the Program Guidelines.

BUSINESS PLAN FORMAT

• Provide one signed completed original outlining the sections described in the Business Plan Guidelines below.
• Provide a completed electronic copy on memory stick, in Word and Excel for any associated spreadsheets and Adobe Acrobat for financial statements.
• Proposal format – include a Table of Contents and a Bibliography. Please ensure that all pages are numbered, and have a minimum 1” margin and 11 point Arial font. The business plan should not exceed 40 pages in length. Additional technical or other details should be placed in appendices.
• Please ensure that the business plan format provided below is followed. Proposals not submitted in this format will not be considered for review.

EXECUTIVE SUMMARY

The executive summary should not be more than 2 pages in length and should include the following:

• Project Name and Location of the Pilot Demonstration;
• Proponent Company and Location;
• Description of:
• The project;
• Description of the goals of the project and why your organization is well suited to meet it;
• The cost of the project, including the IDF request;
• The technology; and
• Why this project is considered innovative and unique, relative to the current marketplace and existing technologies.
• Key points of the project plan and identified opportunities for success;
• Key benefits to Ontario, including economic, environmental and technical impacts.

PROJECT

This section should include details regarding the project, including the factors that the Province should be aware of in assessing the benefits of the proposal. This information should include, but is not limited to:

Technology

• Description of the project and technology innovation, goals and anticipated outcomes and why the project is proposed at this time; and
• What is the current state of the technology in the industry and how will it change with this project.
• The project and technology should be clearly and fully described, including:
  • Uniqueness of the product and/or process, as compared to existing products and/or processes;
  • State of project technology, including proof of validation (usually by a third party);
  • Work completed to date, confirming the feasibility of the technology;
  • Technical and non-technical (including operational) risks which are to be addressed through the project, as well as mitigating strategies to minimize these identified risks; and
  • Complexity of scale-up, which includes a description of what a commercial-ready product and/or process would look like.

Impacts

• How the project aligns with one or more of the IDF technology focus areas – Environmental Technologies, Alternative Energy, Bioproducts, or Hydrogen;
• Impact on societal needs and/or challenges;
• Potential Economic Benefits, including job creation targets, both with the pilot demonstration project as well as the projected commercialization;
• Resulting global or North American competitive advantage in Ontario;
• Description of the return on investment in capital and people;
• Likelihood of the project to generate local economic activities in Ontario; and
• Description of at least three measurable indicators of project success.

Plan

• Comprehensive pilot demonstration project plan detailing activities, project phases, schedules and milestones for completion of the project;
• Details of the project costs by component (wages, engineering, design, machinery, equipment, working capital, etc.) and milestones;
• Description and mitigation plan for technical and non-technical (including operational) project risks;
• How the intellectual property will be protected (e.g. patents, copyrights, trade secrets, know-how, etc). Details should be provided regarding existing or prospective licenses, patents, etc; and
• Commercialization plan for the product, such as a commercialization partner with a strong existing relevant marketing position who is committed to participating in the scale up of the project and growing the company.

MARKET

The business plan should contain information pertaining to the market and marketing activities of the business, such as but not limited to:

Market Analysis

• What are the potential size, structure and trends of the industry?
• What is the target market and what is the product’s market potential in Ontario, Canada and exports?
• What is the company’s share of the market (existing and proposed)?
• What are the demographics of the existing and proposed market?
• Who are the customers and what are the needs that the existing and proposed product/services fill?
• What leads the applicant to believe that the market requires this product and/or process?
• What are the anticipated market access and distribution channel strategies?
• What is the proposed marketing strategy?
• Summarize the results of any market studies conducted and please provide the sources of analysis.

Competition

• Who are the competitors of the company’s existing and proposed products and/or services?
• How intense is the competition?
• What is their share of the market?
• What are the competitive advantages of the company’s existing and proposed products and/or services (e.g. onsite location, speed of delivery, collaborative relationship, quality, prices, etc.)?
• Are there any barriers to market entry?
• What is the company’s competitive advantage in terms of costs compared to the competition?
• What makes the company’s existing and proposed products and/or services unique and superior to those of the competitors?

COMPANY BACKGROUND AND CAPACITY

Your business plan should describe your business and include information regarding the history of an established business or details for a new business venture. This information should include, but is not limited to:

• Brief description of organization’s history;
• Any change(s) of ownership throughout the company’s history and details regarding other companies owned by or related to the applicant or its principals;
• Overall business objectives, business model and strategy;
• Previous major projects or business expansions that have been undertaken;
• Location and description of existing facilities and current products and/or services;
• Provide details on existing operations such as facilities, staff, skill levels, product capacity, quality standards (ISO), supply chain and distribution channels;
• Does the company have the internal and organizational capacity (e.g. working capital, utilities, staff, etc.) to deliver the proposed project?
• Appropriate supporting documentation confirming the establishment of the business (i.e. Articles of Incorporation, Amendments, Partnership Agreements, etc.); and
• Copy of Director’s Resolution of the company showing Approval of the project by the Company’s board.

MANAGEMENT

The business plan should include details regarding key management personnel including, but not limited to:

• Organizational chart of the key management roles identifying individuals who fill those roles and description of program management methodology;
• Internal control (financial and process) procedures in place to manage the project. Summary or copy of any internal compliance programs and any compliance risk assessments performed by the Company;
• Supporting resumes of each principal and each key member of the management team to demonstrate capacity to complete pilot project and commercialization. The resume should include their title, academic/technical training, business/technical experience, accomplishments, duties and functions/duties performed in the company and length of time with the company;
• List of the Board of Directors, business affiliation and board position, a brief statement outlining the expertise each member brings to the board and their overall relationship to the organization;
• Technical credentials and capacity of the project team; and
• Availability of trained workers, recruitment and retention strategy.

FINANCIAL

This section should detail the financial status of the company as well as the project sources and uses of funds.

• Details of the project financing (new equity, internal cash, loans, other government programs such as municipal, provincial and/or federal). Identify sources and terms of financing;
• Detailed five-year forecasts - Income Statements, Cash Flows, and Balance Sheets, including measures of project viability (IRR, NPV, etc);
• Annual Audited or reviewed Financial Statements for the past five years. If audited statements are not available, please explain why;
• Most recent internal interim Financial Statements;
• Details of existing debt (lender, payments, interest, security);
• List the capital equipment and properties currently owned by the organization and detail how they are being paid for (historical balance sheets if available). Legal descriptions and appraisals of equipment and properties, may be requested; and
• Disclosure on related parties, commitments and contingencies including:
• Related party transactions.
• Schedule of threatened or pending litigation, claims and proceedings, and all related pleadings and correspondence and Notices of breach or default under any material agreement.
• Any known or pending Environmental issues including pending investigations and governmental proceedings.
• Pension plans and employee benefit plans.
• Union contract details i.e. when do contacts expire, term, etc.

The information presented must be reasonable in relation to the other sections of the business plan. Underlying assumptions are to be disclosed along with the basis for those assumptions.

SERVICE STANDARD

Applicants will be notified of a decision within 60 business days of submitting a complete application.

Applications must fulfill all requirements as listed in the application instructions/procedures. In the event that program staff deems an application to be incomplete and require additional information/follow-up from the applicant, the timeline standard may not be met.

CONFIDENTIALITY

Please note that the Ministry of Economic Development and Innovation is subject to the Freedom of Information and Protection of Privacy Act. Any information submitted in confidence should be clearly marked. Third party information that meets the test set out in Section 17 of the Act will not be disclosed without notice to you. The following excerpt outlines the requirements:

Third party information - Section 17.1:

A head shall refuse to disclose a record that reveals a trade secret or scientific, technical, commercial, financial or labour relations information, supplied in confidence implicitly or explicitly, where the disclosure could reasonably be expected to,

• prejudice significantly the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization;
• result in similar information no longer being supplied to the institution where it is in the public interest that similar information continue to be so supplied;
• result in undue loss or gain to any person, group, committee or financial institution or agency; or
• reveal information supplied to or the report of a conciliation officer, mediator, labour relations officer or other person appointed to resolve a labour relations dispute. R.S.O. 1990, c. F.31, s. 17 (1); 2002, c. 18, Sched. K, s. 6.

For further assistance regarding the Innovation Demonstration Fund (IDF), please contact the Ministry of Economic Development and Innovation.

CONTACT

Innovation Demonstration Fund (IDF)
Commercialization Branch
Ministry of Economic Development and Innovation
11th Floor, 56 Wellesley Street West
Toronto, ON M7A 2E7
Tel: (416) 326-8458 Fax: (416) 314-0680
Email: idf@ontario.ca