When it comes to funding, things are looking up says Abdullah Snobar, executive director of Ryerson University tech incubator the DMZ and the CEO of DMZ Ventures, the incubator’s for-profit investment arm. “We’re beginning to see a major bounce back from the pandemic,” he says. “So far this year, Canadian startups have already raised more than two times their 2020 totals. And Toronto tech set a new record for venture funding in the second quarter of 2021 — companies in the city have raised $1.46 billion through 68 deals.”

But, despite the recent eye-popping deals, access to capital is still one of the biggest barriers for underrepresented entrepreneurs, he says. In an April 2021 study of 700 Black female entrepreneurs in Canada, 78.5 percent said they have trouble securing financing, and when they do, the cost of borrowing is too high. Worse, last year, there was a substantial drop in venture capital for women-led startups, which Snobar finds shocking. “The best startups — and this is factual — are actually women-led startups,” he says. It’s true: a 2018 study by BCG and MassChallenge found women-led businesses generate 12 per cent higher annual revenues.

Clearly, post-pandemic recovery needs to be inclusive. To ensure that happens, it’s important to have resources specifically for marginalized groups, says Snobar, whether that’s investors who prioritize underrepresented founders or government grants earmarked for these groups. But entrepreneurs from all backgrounds need to understand what their options are — and that they’ll likely fund their companies through a variety of sources. Here’s what you need to know.


Most of Canada’s major banks offer loans aimed at small businesses. Unlike an angel investment or venture capital financing, this type of funding allows business owners to hold onto their equity. And, Snobar points out, as you generate revenue and repay the loan, you’re building your company’s credit. Founders should be prepared to satisfy the five Cs of credit:

Character: In this context, do you know what you’re doing when it comes to managing a business? They’ll want to see your business plan. Make sure you’ve done your research on your sector, particularly its opportunities and challenges.

Capacity: Lenders will want to evaluate your credit history, but they’re also looking at your willingness to invest your own funds and your company’s anticipated cash flow.

Capital: This is your company’s liquidity, growth and profitability.

Conditions: The terms and conditions lenders require to mitigate their risk.

Collateral: The assets you’re willing to use to guarantee the loan.

Best For: “Usually, bank loans are a great option for startups that require a large initial investment,” Snobar says. This money could go toward inventory, equipment or other one-time expenditures, or it could be an injection of capital for growth.

Take Note: As with personal loans, the bank can request the company repay their small business loan with limited notice, which can complicate a company’s cash flow. There’s likely not going to be much flexibility when it comes to making payments. Interest rates can be high and having to guarantee the loan could put founders in a tough spot, Snobar says. But the hardest part of securing a business loan is actually, well, securing the loan. “They’re hard to qualify for,” he says. “For racialized founders, it’s not as easy to receive a loan.” If the big banks aren’t biting, consider applying for a loan from a credit union or through organizations like Futurpreneur, Shopify Capital or Access Community Capital Fund.


In Canada, all three levels of government tend to offer grants for small business owners, particularly for underrepresented founders. Grants don’t need to be repaid, which takes the pressure off a founder, and they can confer credibility on a company. While there are lots of subscription-only grant directories, these can be hard to navigate. Instead, start with the Government of Canada’s Business Benefits Finder, which recommends government grants based your particular circumstances. Then, research grants based your location, identity or industry to find funding from private or non-profit sources.

Best For: Just about everyone! Whether your business is pre-revenue, generating revenue or read to scale, there are grants for every stage and focus.

Take Note: Grant applications can be time-consuming, and grants themselves are highly competitive. But the rules are always clearly laid out, says Baba Ajayi, CEO of virtual concierge service Andie. “In life, it’s hard to separate people from their money; you might not have a clear path to doing that,” he says. “Whereas with grants, it is always very clear — here’s the application form, here’s the information that’s required, here’s how it should be filled out.” There may even be past examples of successful applications, so founders can understand what the grant officer might be looking for.

Angel Investors

When we talk about access to capital, we often mean access to investors. Angel investors are high net-worth individuals who invest in early-stage companies in exchange for an ownership stake. They’re often successful entrepreneurs themselves, so they don’t tend to invest only money — they also share their time, experience and expertise. There’s also another benefit: “If you’re trying to eventually raise some VC funding, it’s good to build a track record through angel investment,” Snobar says.

Best For: “Angel investors are more likely to provide capital for an idea, rather than needing a full proof of concept, so if you’re really early stage and you think you need a smaller amount of money to get the idea off the ground, this is probably the direction you want to take,” Snobar says.

Take Note: It is much harder to find an angel investor than other types of investors; some founders may already have angels in their networks, but that’s generally not the case for underrepresented founders. Accelerator programs are good ways to connect with Angels; Ryerson DMZ cultivates relationships with these investors through its Angel Investor Program, while Schulich School of Business Office of Innovation & Entrepreneurship also counts Angels among its community. Groups like Angel One Network accept applications from growth-stage companies who hope to pitch its network of Angels at monthly investment meetings.

Venture Capital Funding

Venture capital funds are specifically intended for investment in startups, early stage or emerging businesses in exchange for an ownership stake in the company. Most companies raise funds in rounds, called Series A, B or C, with each round corresponding to a different stage of the company’s development. There are plenty of benefits to VC funding beyond financing; ideally, you’ll also get guidance, mentorship and potentially even a reputational boost. “We operate in a legacy industry and as a relatively new incumbent, funding gave us credibility,” says David Whyte, CEO and co-founder of investor relations software company Irwin, which received seed funding from the MaRS Investment Accelerator Fund as well as Series A financing through a growth equity partnership with K1 Investment Management. “As a first-time founder, this is a benefit I didn’t expect. Financing announcements hold weight with employees, customers, prospects and potential partners. People want to know that you have the balance sheet to remain in business.” Whyte says the value of these investments go beyond money to include expertise and advice.

Best For: Startups that are further along in their growth. “VCs often need to see traction, and they have to have a proof of concept in hand,” Snobar says. “It's probably best for companies looking to grow highly-scalable, global businesses that serve large markets.”

Take Note: “VCs tend to take a greater stake in a company, meaning that they’ll probably have a larger voice in a startup’s direction,” Snobar says. However, that can have clear benefits. Whyte says he feels lucky that he has been able to partner with people and organizations who are aligned with his business goals and have helped move his company forward. “This boils down to choosing your partners wisely. From day one, we have built Irwin’s product and business exactly how we wanted with the support of our investors,” he says.

Looking for support to build your business? Find connections with funders, mentors and advisors here.