In April, the Alberta government announced a 30 per cent investor tax credit to venture capitalists who invest in IT companies based in the province. This is good news for Alberta, which continually struggles to gain the interest of venture capitalists in small business due to the province’s large scale oil and gas industry. This new initiative, which launches in January, could have many positive repercussions for the Albertan economy. Venture capitalists can help support small businesses get off the ground and perform in ways that they wouldn’t be able to without external financial investment. This tax credit will be extended to investors putting capital into the following industries:
- IT
- Clean tech
- Health tech
- Interactive digital media and game products
- Post-production
- Visual effects and digital animation
If your Alberta-based company is involved in any of these areas, you’re much more likely to generate interest from investors come January. Here are just a few of the ways you can prepare your company for a meeting with potential investors.
What Are Venture Capitalists Looking For?
Unlike traditional investors, venture capitalists put their money into businesses that haven’t yet had the opportunity to generate a regular profit. These investments, while sometimes risky, can have great results. Venture capitalists are looking for executives and management with proven experience creating businesses that generate a high return on investment. A lack of high-quality expert management is likely to turn off these investors.
Another thing venture capitalists will be looking for is market size. They want to ensure that there is a big enough demand for your product to generate profit—in order to demonstrate that your market is a worthwhile investment, you’ll need to be able to show that your industry can generate at least one billion dollars in revenue. Your pitch to investors needs to include a comprehensive market size analysis with third-party research and statistics, information about your company’s competitive edge, and long-term risk management strategies.
The new investor tax credit announced by the Albertan government is likely to help a lot of small businesses throughout the province. Don’t miss your opportunity to find an investor that can elevate your company to the next level of success. Paladin CMS has years of experience helping businesses strategize and prepare for a meeting with investors. Contact us today for more information about how to make your business as financially appealing to investors as possible.
