Modern Matchmaker - Financial Post Article on Fundica (Views: 6567)
Wed, 06 Jul 2011
Tell us about yourself. Where are you from? What do you do? What are your ambitions? Just answer a couple dozen questions and we'll find you a match.
Fundica, a sort of eHarmony of the funding world, promises to match small-and medium-sized businesses up with all manner of funding opportunities from government grants to loans from traditional financial institutions to venture capital investments.
The Montreal-based startup launched its proprietary Web service that connects business owners and investors at the beginning of the year.
Companies looking for funding create a profile based on 20 to 30 criteria and are "matched up" with the opportunities they qualify for.
Louis Cleroux, the 25 year-old founder of gaming startup Cravio Games, used Fundica to access $25,000 in grants and $150,000 in loans between January and May and says the financial assistance he secured was crucial in allowing him to incorporate and move ahead with his company.
"The project would not have been born if we didn't have the funding," he says, adding that he would not have found the six total opportunities -ranging from a grant for $1,000 to a government-backed loan for $80,000 -without Fundica's help.
Mr. Cleroux recently returned from the E3 video game conference in Los Angeles where he pitched the mobile game he plans to release in October to several international publishers. He hopes to reach a deal with one of them to promote his game abroad soon, he says.
Cravio Games -an entrepreneurial business in its early stages -is exactly the kind of company Fundica targets.
"It's businesses that are really looking to grow and do new things," Mike Lee, founder of Fundica, says. "Nobody funds you just for being the way you are in the private sector."
But organizations of this scale may find the prospect of securing funding confusing and difficult to manage. "Finding and tracking these initiatives can be mysterious and costly for busy entrepreneurs," Mr. Lee says. "And high advertising and administration costs can make programs/ products completely ineffective for governments."
After a decade working as consultants helping companies connect with research and development tax credits and other incentives, Mr. Lee and his business partners decided to take a more systematic approach to the task and developed the matching software.
"It was always a question of getting asked -and we started out with spreadsheets and then databases and even that was not enough to manage it properly," he says. "We decided we needed a full online web server that funding providers can come in and help us update and we can maintain in a much more dynamic way."
The system they developed systematically combs for funding opportunities using an algorithm as well as manual updates, and it allows funding providers to update their own information. It covers Ontario and Quebec and plans to expand to the rest of Canada starting with Alberta and British Columbia in the near future.
Users can do a basic search for free to evaluate the number and size of potentially applicable programs. For a monthly fee of $40, they get details of the opportunities, continuing notifications of other programs and an hour of consulting from Fundica.
Some, like Mr. Cleroux, choose Fundica's help to complete the funding applications for a fee.
Mr. Lee won't say how many clients the company has attracted since its January launch, but says the numbers are growing. "We've mostly been working on generating traffic," he says, adding he hopes to attract interest from technology-related startups.
"Our market will probably come down to the number of small-and medium-sized businesses across Canada and how many of them are related to tech in a very broad sense," he says.
Interestingly, Fundica also fits that bill. "Prior to doing this, we never actually got any funding. We built the product and decided to test it out and very quickly realized there's programs here for ourselves," Mr. Lee says.
Like their clients, he says, they just didn't think of it or were too busy to do anything about it.
"We realized there's programs that fit exactly what we're doing. Now obviously, we're pretty aware and we follow this much closer."
cdobby@nationalpost.com
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