Toronto’s MaRS Discovery District is hoping to help up to 30 startups expand their business by bringing-in an outside executive.
The innovation centre’s Embedded Executive Program, which is currently accepting applications, gives small companies up to $50,000 to fund the salary of a new “C-level or other senior-level executive” for six months. Now in its third year, this year’s program will be the biggest, with enough funding to be almost as big as the past two years put together.
“We developed the program and launched a pilot of it in 2009 with limited funds, supporting 12 ventures that we funded for a period in 2010,” says Amie Sergas, the director of MaRS' Business Acceleration Program Network. “We ran the program again in 2011-12 with a slightly larger budget and funded 21 ventures that year, bringing the total number of companies to 33 so far.”
The program, which is funded by the government of Ontario, is only open to companies from that province.
“Our program focus has always been on high-potential life sciences and healthcare, cleantech, and ICT companies,” says Sergas.
The goal of the program is “encourage new growth opportunities,” for the companies participating, “rather than support existing resources in the venture,” according to the program information, meaning that the new executive should come from outside the company and work to develop and achieve specific short-term goals.
In addition to being based in Ontario, participants must have had less than $1 million dollars in revenue last year or be pre-revenue, have at least one paid employee, have raised less than $2 million (with some exceptions) and can’t have been in business for more than eight years. The program, which is only open to technology companies with must have “a clear, sustainable technological advantage.”
Companies receiving funding through the program have to put up 30 percent of the their new hire’s salary, up to $15,000 and find the new executive on their own.
While program only funds the executive’s salary for six months, according to Sergas, “we have a number of cases where the embedded executives are still working successfully within the ventures a few years later.”
While a confidentiality agreement covers companies participating in the MaRS program, the Ontario Centres of Excellence, a non-profit that supports innovation in Ontario and often works with MaRS used to run a similar program.
The OCE program supported the hiring of an executive through a convertible debenture—unlike the MaRS program, which is grant-based.
That program did have some big success stories though, Ottawa-based 360pi, the developer of a cloud-based business intelligence program and one of the fastest growing startups in the country used that program to hire a CEO to find new uses for the company’s technology and search for additional funding.
While Toronto-based Nulogy, developers of a cloud-based tool for large companies to manage third-party manufacturers, used the OCE program to hire a “seasoned sales executive…during a crucial time.”