Ag-West Bio | Ag-West Bio funding for startups

Ag-West Bio’s Technology Commercialization Fund

The Ag-West Technology Commercialization Fund (or ‘Tech Comm’ Fund) provides high-impact risk capital to innovative early-stage agri-food companies that have the potential to yield strong tangible benefits to the province of Saskatchewan (jobs, taxes, etc.) through the commercialization of new technology. The fund is self-replenishing and has been active since 1989!

Examples of prior investments:

Prairie Plant Systems
Performance Plants
Saskatoon Colostrum
Titan Clean Energy Projects
Open Mind Developments (Pela Case)

Investment fund details

Investments are repayable loans (not grants) to a maximum of $300,000.
Loans can be structured as either debt, equity, or a combination of both, tailored to each specific investment.
Funding is often released in portions (tranches) based on predetermined milestones.
Selection is highly competitive; only a small number of companies receive investment.
Ag-West Bio’s approval process is rigorous and time consuming, often taking several months. Once an investment is approved internally, it must be reviewed by a third-party advisory panel, and finally, by Ag-West Bio’s board of directors, who meet quarterly. The benefit of this in-depth process is that if approved, an Ag-West Bio investment can often be used to leverage other investment capital. Companies are encouraged to reach out early to ensure there is sufficient time to build a strong application, adjust the business plan if necessary, and avoid rushing.

Guiding Principles

Ag-West Bio’s Tech Comm Fund embraces the following principles:

Patient: We understand the timelines involved in commercializing new technology (especially in agriculture). We accept that repayment is usually in the seven- to 10-year range.

Collaborative: We collaborate, rather than compete, with other funding agencies.

Non-predatory: We expect a fair return for the risk we take but will never be predatory. For the level of risk we take, our investment terms are favourable.

Flexible: We structure investments to satisfy both Ag-West Bio and the entrepreneur, using debt, equity, or both. Most funding agencies are not able to structure investments as flexibly as we do. We also understand that there will always be challenges/unforeseen circumstances in a company’s commercialization journey.

Accountable: Our investments are not grants and we hold founders accountable for repayment. We also stay accountable to our investees, as the non-financial support we can provide is often as important as the capital investment.

Why does it exist?

The Tech Comm Fund assists innovative early-stage agri-food companies in their commercialization journey when risk is too great for traditional capital sources.

Specifically, the fund:

Fills a funding gap that exists at the post proof of concept/pre-market entry stage, commonly referred to as “The Valley of Death” which many startups do not survive, usually due to a lack of capital.
The agri-food sector is typically capital intensive with demanding regulatory requirements, resulting in a longer, riskier path to market when compared to other industries. This is at odds with the risk-averse private sector seeking large returns in the most expedient manner.
There are grants available at this stage (pre-revenue), but most require a portion of funding to be non-grant/government sourced (following the ‘stacking rule’). The Tech Comm Fund is not government capital.
The success rate in Canada of commercializing innovation in the agricultural biotechnology sector is 0.3% (Graff et al. 2009).

Eligibility

To be eligible for Ag-West Bio’s Tech Comm funding, companies must:

be a for-profit, incorporated and located in Saskatchewan (or federally registered with Saskatchewan operations).
have an innovative product, service, or technology that is beyond the proof-of-concept stage (Technology Readiness Level (TRL) of at least 3).
have a quality business plan or project proposal (detail to be commensurate with the level of financing requested).
have identified an addressable market, with a clear path to commercial sales.
have a capable team with a focus on revenue and commercialization.
not present a conflict of interest or perceived conflict of interest with current or past staff or board members

*Software businesses without a hardware/biological component are not eligible.

Ag-West Bio’s mission statement:

“Accelerating innovation and enabling companies to commercialize research in agricultural and food biosciences.”

Success for our investees means success for us.