Archive for June, 2010

By Bryan Watson

The Minnesota high-tech (medical devices, ICT, nanotechnology and cleantech) and the angel investment communities have lobbied the state government since 2001 for this tax credit as they have been proven effective in stimulating the start-up of new high-tech companies and job growth in other states.

Wisconsin and Ohio, in particular, have been successful in luring Minnesota-based entrepreneurs to their states to take advantage of investment stimulated by successful angel tax credit programs (as much as a 54% increase in angel investment in WI, as reported by panelist John Alexander, Chairman, Twin Cities Angels).

Key features of the Minnesota Angel Tax Credit include:

  • A 25 percent tax credit for investments in small, emerging businesses.
  • A maximum credit of $125,000 per person per year ($250,000 if married filing jointly).
  • Program funding of $11 million in credits in 2010 and $12 million in credits annually from 2011 through 2014.
  • A state refund if credits exceed the investor’s tax liability.

Investors, funds and businesses must be certified by the Minnesota Department of Employment and Economic Development (DEED) in order to participate in the program. The minimum qualifying investment is $10,000 (investors) and $30,000 (funds), and the maximum credit per business is $1 million.

Businesses Qualifying for Eligible Investments must be headquartered in Minnesota, with:

  • A minimum 51 percent of employees and 51 percent of payroll in Minnesota;
  • Fewer than 25 employees;
  • Employees’ wages at least 175 percent of the poverty level (currently $18.55 per hour – does not apply to business’ executives, officers, board members, 20 percent-plus owners);
  • An existence of less than 10 years;
  • Proprietary technology being used to add value to a product, process or service in a qualified high-technology field;
  • Research or development of a proprietary product, process, or service in a qualified high-technology field;
  • Research, development, or production of a new proprietary technology for use in the fields of: agriculture, tourism, forestry, mining, manufacturing, or transportation.

Certification applications will be available on the DEED Web site in August 2010. More details about the program, including progress on implementation, are available at: www.PositivelyMinnesota.com/angelcredit

Implications for Canada: If the Minnesota angel tax credit has the intended result, there will be reinvigoration in start-up company financing in the state, particularly in high-tech industries such as medical devices and ICT, where Minnesota has traditional strength, as well as in emerging clean technologies and bio-industries.

Minnesota’s geography, diversified economy, highly educated workforce and self-perceived risk-adverse business culture share a lot in common with many parts of Canada and could offer a case study for Canadian regions seeking to accelerate entrepreneurial activity in innovation-intensive industries at home.  A reinvigorated Minnesota start-up ecosystem may also provide new licensing and technology development partners for Canadian companies and research institutions that is more accessible than other high-tech regions in the United States.

While the refundable nature of the tax credit could attract Canadian angel capital away from Canada, the more likely scenario would be a limited increase in strategic cross-border investments.  Increased angel activity in Minnesota should also increase the importance and profile of angel investor organizations like Twin Cities Angels and RAIN Source Capital as front doors for entrepreneurs seeking financing and sources of mentorship for new investors seeking to take advantage of the tax credit.  In time, this could enhance the visibility and accessibility of the Minnesota angel community and create more opportunities for Canadian angel groups and start-ups to find Minnesota-based co-investors.

Reposted from National Angel Capital Organization

Throughout his career, both in Canada and the UK, Bryan J. Watson has been a champion of entrepreneurship as a vector for the commercialization of advanced technologies. Upon his return to Canada in 2004, Bryan established his venture development consulting practice to help emerging-growth companies overcome the barriers to success they face in the Canadian commercialization ecosystem.  Visit Bryan’s blog and the National Angel Capital Organization.

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Sridaya Srivatsan, a Grade 11 student from St. Francis Xavier Secondary in Mississauga, has been accepted for a prestigious summer research program at  Deep River Science Academy (DRSA) near Ottawa. RIC Centre, Mississauga put forward Ms Srivatson’s name as a candidate and Sheridan College has provided sponsorship.

This unique and innovative science research summer academy selects only 18 students across Canada.

The program provides a six week work experience in a leading research laboratory under the guidance of a professional scientist or engineer and a university science student hired full-time to supervise and guide their research.  The research projects range from chemistry, physics, biology and life sciences and incorporate aspects of engineering and technology.

DRSA is a private school and is authorized by the Ontario Ministry of Education to issue academic credits. Students must write a research paper and give an overview of their research to their peers and interested scientists before graduating with 2 credits.

Pictured Sridaya Srivatsan was selected to participate in the Deep River Science Academy. Her application is supported the RIC Centre and  Sheridan College. Photo l to r: Jeff Zabudsky, President Sheridan College;  Sridaya Srivatsan and  Bill Matthews,  Chair RIC Centre & VP Marketing Magellan Aerospace.

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By Sarah O’Neill

The Natural Sciences and Engineering Research Council (NSERC) Engage Program is a big hit with researchers and their business partners. Aimed at igniting new research partnerships, Engage is fulfilling its mission, and quickly. The program, launched late last year, has helped cement scores of new R&D relationships in a diverse array of sectors across Canada.

As of mid June, Ontario became the first region in Canada to award over $1 million dollars through Engage funding. Both the first Engage project awarded in the region, and the project which put funding over the million dollar milestone were awarded to researchers at the University of Guelph.

Paul McNicholas received the first Ontario Engage grant. Together with AQL Management Consulting Inc., McNicholas and his team are working on a statistical methodology concerning the early detection of important animal health events.  Robert Dony’s project in partnership with NIMTech Incorporated tipped the Ontario investments over the million dollar mark. Dony’s project focuses on examining a real-time measurement of product and process characteristics system.

The quick decision process is one of the reasons why the program is proving to be so popular. Industrial partners are enthusiastic that they were able to proceed with projects shortly after they were proposed.

“We were truly amazed at the speedy turnaround on our joint funding submission with McMaster University,” said Gerard Campeau, President of Thermal Electronics Corporation in Aurora, Ontario.

The good news continues, as NSERC’s Strategy for Partnerships and Innovation (SPI) received an important endorsement in this year’s federal Budget that will help create and sustain even more partnerships between higher education researchers and Canadian businesses. The Budget assigned $5 million annually in new funding to support building bridges between businesses and researchers through SPI.

Subscribe to NSERC’s free bi-monthly In Partnership e-bulletin to receive news, success stories, tips and topics relevant to businesses and industries who are looking to increase their R&D advantage.

Sarah O’Neill is the Communications and Promotions Officer at the Natural Sciences and Engineering Research Council’s Ontario regional office.  Sarah can connect you with the information you need to know regarding NSERC’s partnership opportunities.

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By David Crow

Our friends at C100 and Bootup are bringing Dealmaker Media to Vancouver for a great event in August. If you don’t know Dealmaker, you should. It’s run by a Canadian, Debbie Landa. They produce 2 of the most valuable events for startups in Silicon Valley and Los Angeles – check out Under the Radar for a list of events and companies.

They are producing an event, Grow 2010, in Vancouver on August 19-21, 2010.

The event is a 3 day event with an invite-only Day 1 to connect Canadian founders with the best and brightest from Silicon Valley and across CAnada. Days 2 & 3 feature great speakers and the opportunity to build unique lasting relationships.

If you’re an entrepreneur and you missed MeshU in Toronto (and it’s really too bad, this was one of my favourite events of the past 2 years), you should attend Grow 2010. Buy your ticket today and it’s $185, if you miss the super early bird (or as I like to call it the just getting in from a late night), you can grab an early bird ticket for only $230. This is unbelievable! Add in an approximately $700 flight it’s possible to do this for less than $1500. It’s worth the opportunity to meet the companies, build the connections, and help grow your company.

We’ll be coordinating shared hotel rooms for entrepreneurs from Toronto, Montreal, Waterloo, Ottawa, Halifax and anywhere. If you’re not local to Vancouver we’ll help you find a shared room to manage your costs. Add a comment if you are attending and we’ll try to help you find a roommate.

Reposted from StartUp North

David Crow is an emerging technology and start-up advocate/evangelist. At Microsoft Canada, he is responsible for helping Canadian start-ups gain access to software, support and visibility in the Microsoft ecosystem through programs like BizSpark (details at microsoft.com/bizspark). David blogs at http://davidcrow.ca/ and http://startupnorth.ca/ or follow him on Twitter @davidcrow

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By Dev Basu

Now in its 3rd year, David Mihm’s Local Search Ranking Factors study continues to provide definitive insights into the world of Local Search (Google Maps, Location Based Services, You name it’s covered). This year Powered by Search made it as the only other company in North America to have two panelists (@Shagun Vatsa and your’s truly) featured in the study, and the only Canadian company to have the same honour (see how that’s spelled honour and not honor).

For those of you eager to know the top 10 factors affecting your map rankings in the 1, 3 or 7 pack, here they are:

  1. Claiming your Google Place Page/Local Listing
  2. Have a Business Address in the City That is Being Searched
  3. Associate Your Google Place Page with the Proper Categories
  4. Put Your Product/Service Keyword in Your Place Page Business Title
  5. Proximity of Your Address to the Searched City’s Centroid
  6. Product/Service Keywords in your Google Place Pages Description
  7. Associating Photos with your Google Place Page
  8. Associating Local Area Code with your Primary Place Page Phone Number
  9. Associating Place Page with Marginally Related Categories
  10. Location Keyword in Place Pages Business Title

Local SEO is only going to get tougher this year as there is more saturation and competition in every industry vertical under the sun, but we’re well equipped to react proactively rather than reactively to such changes.

Original Source: Local Search Ranking Factors 2010

Dev Basu is a Toronto based Search Engine Optimization, Local Search, Internet Marketing, and Social Media Expert. Dev is the founder and CEO of Powered by Search, an internet marketing agency based in Toronto. He blogs on the topic of Local Search and Small business marketing at his personal blog, Search Marketing Insights.

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By Stephen Rhodes

I often ask clients about their secret sauce – what makes them different from their competitor.

Many service-based companies say good customer service, or even excellent customer service is their competitive advantage. It’s their secret sauce.

I tend to give it more credence when they express excellent customer service from the clients point of view. Afterall, doesn’t every business say they have good customer service.

So what is good customer service? Unless you talk on a regular basis to your customers, you probably don’t know. It’s like branding. A brand is not what you think it is, it’s what your customer says it is.

So, if you want to be excellent at customer service, ask your customers what that means to them. And then market your “excellent customer service” as an expression of what it means to your customers.

Reposted from The Marketing Pad

Stephen Rhodes is President of The Marketing PAD, a full-service strategic communications and marketing company. Read Blogpad or visit  The Marketing Pad online.

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By Fred Hausmann

Many businesses – in particular, small and mid-sized businesses – make the same mistake year after year – and lose substantial amounts of money as a result.

Are you one of them?

To find out, start by asking yourself the question: Did you keep track of your R&D projects in the past year?

If your answer is no, then there is a chance you are. In our experience, smaller enterprises in Canada are vastly underutilizing the federal government’s $4 billion SR&ED tax credit program.

There are a couple of reasons for this. The first is that company owners often fail to appreciate that they could qualify to apply to the SR&ED program. This is due to the erroneous but widely held notion that qualifying R&D work must be carried out as a formal activity. In many people’s minds, the program is thus biased towards large firms with dedicated research practices.

Nothing could be further from the truth. Indeed, the Canadian Revenue Agency addresses this point explicitly on its website with the statement that the program is targeted at “Canadian businesses of all sizes.” Based on our many years practice, we can confirm that smaller businesses are just as likely to receive SR&ED tax credits for their R&D work as larger companies – as long as the work qualifies. That’s the determining point!

The second reason smaller companies often fail to take advantage of the SR&ED program is that they don’t realize how broad the CRA’s definition of R&D really is.

Simply put, qualifying work is not limited to basic research conducted in a lab. While such work certainly may meet the eligibility requirements, the CRA clearly stipulates that applied research, experimental development and supporting activities can also be claimed against the SR&ED tax credit.

If your company has done any of the following in the past year, it could be eligible for a refund:

  • Developed a new product or made iterative innovative improvements to an existing product
  • Designed and tested a new product, a prototype or a process
  • Responded to a technological uncertainty by modifying a product or process
  • Responded to the need for increased productivity or quality by modifying equipment or processes
  • Developed a new application for an existing technology
  • Developed computer programs or software for use in-house to meet an industry specific need

The only sure way to find out if you qualify is to submit a claim. You have 18 months to file following the end of your fiscal year.

A basic requirement for eligibility is that the claimed work must have been performed in Canada. Canadian companies that qualify may receive funding to cover up to 68% of their expenditures, including your time, employee labour, materials and equipment.

With the money you receive, you can invest in sales and marketing, buy new equipment or launch a new product – the options are endless because the refund comes with no strings attached.

Now wouldn’t you agree that it’s worth finding out if you quality for a SR&ED tax credit?

To learn more about how you can put your SR&ED claim to work for you, visit Funding Research and Experimental Development Group Inc. (FRED Group for short) at fredgroup.ca.

Fred Hausmann is the founder and senior managing director of Funding Research and Experimental Development Group Inc., a business development and specialty tax service. FRED helps companies obtain the full amount of government funds and rebates, including SR&ED tax credits, they have coming to them. And then it helps them grow.

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