How it Works

A. How it Works
B. Market Readiness Customer Creation Program (MRCC)
C. Market Readiness Company Building Program (MRCB)
D. Eligibility Criteria
E. Eligible Use of Funds
F. Timelines and Decision-Making Process
G. Flow of Funds
H. Progress Reporting Requirements
I. How to Apply

J. Downloads

Update: Market Readiness Customer Creation (MRCC) and Market Readiness Company Building (MRCB), effective April 2, 2016

  • The allowable in-kind contribution amount for MRCC is decreasing from 50% to 0%. The company must match the OCE contribution with 100 per cent cash from a non-governmental source.
  • The MRCC equity threshold remains the same at $500K.
  • The MRCB equity threshold is increasing from $725K to $1M. Companies that have received a minimum of $250K and maximum of $1M in equity from arm’s-length, third-party, non-governmental sources are eligible to apply for MRCB.
  • The previous revenue threshold for both MRCC and MRCB is no longer applicable, as MR companies no longer have revenue thresholds. There is no limit to the amount of revenue a company may have earned prior to applying to MR programs. Only the equity thresholds apply.

A. How it Works

Through the Market Readiness Program, Ontario Centres of Excellence (OCE) invests directly in companies to further their early stage commercialization and support their growth into a scalable business. The program supports companies in both the Customer Creation and Company Building stages of the Customer Development Model, as defined by Lean Start-up principles. The OCE investment de-risks other investment opportunities and helps the company attract the private investment and other funding it needs to grow. 

The Market Readiness Program is designed for academic spin-off companies created for the purpose of commercializing IP resulting from research conducted in an Ontario-based academic institution (university, college and/or research hospital), or companies that are based at and actively engaged with, for a minimum of four months, an OCE-supported Campus-Linked Accelerator (CLA). As CLAs have been designed to help build company capacity and promote the success of youth-led entrepreneurship, companies that are eligible for the Market Readiness Program through their connection to a CLA must be founded and/or have a member of the management team who is a current student and/or recent graduate (within five years) from a post-secondary institution. 

In order to be considered for the Market Readiness Program, the company’s core product or service must be based on a technology or innovation that gives the company its competitive advantage. The company is expected to have a preliminary product whose technology and market have been initially validated, ideally with a customer.

Companies supported through the Market Readiness Program should have incorporated fewer than three years ago when applying for the Customer Creation stage, and fewer than five years ago when applying for the Company Building stage. Companies must not exceed OCE’s limits for arm’s-length third-party investment ($500,000 at the Market Readiness Customer Creation stage, and $1,000,000 at the Market Readiness Company Building stage).

The phase of the Market Readiness Program applied for relates to the company’s stage of development, not the amount of funds sought/required to advance the company to the next stage of development.

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B. Market Readiness Customer Creation Program (MRCC)

At this stage, the company has completed preliminary validation of its technology and the market, and is now dedicating resources to creating user demand and channeling it into sales. Having achieved validation with initial customer(s), the company shifts its efforts towards increasing demand and growing its customer base. At the end of the Customer Creation stage, the company should be able to demonstrate a repeatable sales process. Applications to the MRCC program should outline all activities, timelines and costs required to reach this goal, even if they extend beyond the scope of the OCE investment being requested. Companies should use MRCC funds to achieve significant milestones against this goal over a period of up to 12 months.    

OCE investments at the Customer Creation stage are $125,000. The company must match the OCE investment 1:1, with 100% of the match being cash from any non-governmental source.  

OCE will issue a convertible note for the value of its investment. Successful applicants must also execute OCE’s standard funding agreement within 30 days of notification of award. A copy of the funding agreement can be downloaded for your reference. Please do not fill out this form; a copy of the agreement will be generated through our online management system and sent to you upon approval of your project. 

Funding will be released in tranches of up to 45 per cent, with a 10 percent holdback. Progress reporting against milestones is required in order to release funds after the initial tranche.   

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C. Market Readiness Company Building Program (MRCB)

A company enters this phase once it has demonstrated a scalable, repeatable business model with a well-developed business plan and robust customer pipeline/process. At this point, the company has begun shifting from “start-up mode”, and developing the processes and management required to become a sustainable company. 

OCE’s $250,000 investment at the Company Building stage will be critical to satisfying early customer demand, scaling the business to drive new customer demand and attracting larger follow-on investment to support business sustainability (Series A, B, etc.). Applications to the MRCB program should outline all activities, timelines and costs that are required to reach this goal, even if beyond the scope of the OCE investment requested. Companies should use MRCB funds to achieve significant milestones against this goal over a period of up to 12 months. 

The company must fully match the OCE investment at a minimum rate of 1:1 in cash, from an arm’s-length third-party accredited investor(s). OCE will issue a convertible debt for the value of its investment, and has standard investment terms that must be agreed upon prior to OCE engaging in any due diligence on the opportunity. In cases where third-party investors are establishing investment terms, OCE will consider investing on the same “market” terms. The company must demonstrate that the matching cash is in-hand or secured, or have verifiable engagement with co-investors, prior to project approval.  

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D. Eligibility Criteria

  • The company’s core product or service must be a technology or innovation that gives the company’s its competitive advantage. (Please note: Due to this program requirement, not all companies that have been eligible for other OCE programs, including the SmartStart Seed Fund, will be eligible for OCE investment through the Market Readiness Commercialization program).
  • Total market for the opportunity must be in excess of $50 million. Priority will be given to opportunities with early customer traction, demonstrated market/customer pull, fast growth, high potential revenues, global exports, sustainable ongoing revenues and profitability, potential for further innovation/diversification, and likelihood of maintaining substantial economic activity (e.g., jobs, supporting industrial infrastructure) in Ontario.
  • Companies must be either (1) an academic spin-off created for the purpose of commercializing IP resulting from research conducted in an Ontario-based academic institution (university, college and/or research hospital), or (2) based at and actively engaged with, for a minimum of four months, an OCE-supported Campus-Linked Accelerator (CLA).
    • For the purpose of the Market Readiness program, “actively engaged with an OCE-supported CLA” means that the company is actively utilizing the services and resources of the CLA, such as mentorship, training etc. OCE will validate the relationship with the CLA prior to moving any application to External Review Panel (ERP) review.
    • For companies whose eligibility for the Market Readiness Program is contingent on being based at and actively engaged with a CLA, the company must be founded and/or have a member of the management team who is a current student and/or recent graduates (within 5 years) of a post-secondary institution.
  • Companies must have been incorporated fewer than three years ago when applying for the Customer Creation stage, or fewer than five years ago when applying for the Company Building stage. The company must be post-Validation stage, according to Lean Start-Up principles. Validation is defined as when the scientific, technical and commercial merit and feasibility of a product or service are determined.
  • Applicants may not have exceeded the following amounts of previous arm’s-length, third-party investment:
    • MRCC – $500,000 
    • MRCB – $1,000,000 
  • The phase of the Market Readiness Program applied for relates to the stage of development of the company and not the amount of funds requested.
    • Note: Companies do not have to have been awarded an MRCC prior to applying for MRCB
  • A company may not be awarded more than one MRCC and one MRCB investment during the lifetime of the company; recipients of an MRCB award may not subsequently apply for an MRCC award.
  • Companies that have previously received $375,000 or more in OCE Market Readiness funding are not eligible to apply to the Market Readiness Program.
    • Companies that have been previously invested in by OCE through its MR2 program are not eligible for MRCC funding.
    • Companies that have been previously invested in by OCE through its MR3 program are not eligible for MRCB funding.

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E. Eligible Use of Funds

Refer to the Eligible Expenditures document for full details. 

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F. Timelines and Decision-Making Process

Applications are accepted on a continuous basis and are typically reviewed every six to eight weeks. An OCE Business Development Manager must initiate the application process. Prior to initiating the application, the Business Development Manager will work closely with a member of OCE’s Commercialization Team to assess the company and opportunity for program eligibility and potential fit with the OCE investment portfolio. 

Only companies deemed appropriate for the program, both from the standpoint of eligibility fit with OCE portfolio, will be invited to initiate an application.    

For MRCC: This sample application template is for informational purposes only. Applications are only accepted through OCE’s online system where full application requirements are listed.  

For MRCB: Please refer to the Program Goals and Guiding Questions. Applications are only accepted through OCE’s online system where full application requirements are listed. 

All Market Readiness applications are evaluated by an External Review Panel (ERP) comprised of independent subject matter and business experts. Applicants are expected to both submit an online application and to present to the ERP during a panel review meeting. ERP makes funding recommendations to OCE based on its assessment of the application and presentation. The final funding decision rests with OCE, through its Internal Review Panel (IRP), which is comprised of senior OCE staff. 

Market Readiness Company Building applications undergo an early stage due diligence process, which must be accepted by the IRP, prior to moving to ERP review. In addition to confirming program eligibility, IRP confirms fit with the program, including suitability to OCE’s investment philosophy and current portfolio.  

Market Readiness is a discretionary, non-entitlement program with limited funding. All eligible applications are assessed on their merit and undergo a review process where the applications are assessed against program objectives and assessment criteria. Companies that have over $100,000 in active funding commitments by OCE must complete the terms of those commitments (including all final reporting) prior to OCE considering other applications for funding. This excludes TalentEdge internships and fellowships.

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G. Flow of Funds

Market Readiness Customer Creation:

  • Upon receipt of the company’s electronic fund transfer (EFT) information and completed convertible debenture, OCE will release a payment equal to 45 per cent of the OCE investment. 
  • Upon receipt and approval of the interim progress report, OCE will release the second tranche of 45 per cent of the OCE investment.
  • The holdback of 10 per cent of the OCE investment will be released upon receipt and approval of the final progress and financial reports, and attestation from the company regarding the use of funds.

Market Readiness Company Building:

  • Upon receipt of the company’s electronic fund transfer (EFT) information and completed convertible debenture, OCE will release the full amount of the OCE investment. 

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H. Progress Reporting Requirements

Interim Progress Report (only required for the Market Readiness Customer Creation Stage):

An interim report, including progress and financials, will be required at approximately the six month point. The company will receive notification and a link from OCE’s AccessOCE system to submit the report. The report must be received and approved by OCE prior to release of the second funding tranche.

Final Progress Report:

Forty-five days prior to the scheduled completion of the OCE-funded milestones and activities, the company will receive a notification from OCE’s AccessOCE system with a link to the final reporting documentation. If an extension is required, it must be requested from your OCE Business Development Manager at this time. Final reporting documentation must be received by OCE within 30 days of completing the agreed upon OCE-funded milestones and activities in order to maintain good financial standing with OCE.

Metrics Reporting:

If OCE-funded milestones and activities continue past a fiscal year end (March 31), the company will be required to complete an annual metrics survey each April, for the OCE-funded milestones and activities that have been completed since the previous March 31. This annual report is mandatory for OCE to fulfil its contract with the provincial and federal governments. Required metrics reports must be submitted in order to maintain good financial standing with OCE.

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I. How to Apply

Applications must be initiated via a Business Development Manager

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J. Downloads 

For investment-related inquiries, including assistance with application development, please contact a Business Development Manager. 

For general inquiries about the online application system and application form, please contact the Application Support Team, at 416-861-1092 ext. 2400 or application-support@oce.zendesk.com.

For inquiries specifically related to contracting and funding disbursements, please contact Sam Saad, Program Manager, at 416-861-1092 ext. 1097 or sam.saad@oce-ontario.org.