Access to Funding Remains a Top Barrier for Entrepreneurs

Young stressed Caucasian couple facing financials troubles, sitting at kitchen table with papers, calculator and laptop computer and reading document from bank, looking frustrated and unhappy. Photo: WAYHOME studio

Canada is a nation of entrepreneurs who drive economic growth and job creation. A fulsome understanding of the state of entrepreneurship and entrepreneurship support is required to support the success and scalability of startups and small businesses across Canada.

A national census distributed to Startup Canada’s network of 150,000 entrepreneurs and enterprise influencers establishes baseline data to measure this. The following key strategic insights from this census will be leveraged by Startup Canada, members of the Private Sector Advisory Council, broader industry partners, government, and academia to improve support resources to increase entrepreneurial success.

Access to funding continues to be a top barrier for entrepreneurs, particularly for visible minorities and those residing outside of large cities.

  • Overall, only 11 percent of respondents say funding is very accessible to their company.
  • Fifty-seven percent consider funding to be somewhat accessible, and 32 percent consider it to not be accessible at all.
  • Respondents who identify as visible minorities perceive financing to be more of an obstacle than those who are not.
  • Of the respondents who indicated finding financing as a major obstacle to growth, over 80 percent reside outside of Toronto.
  • Startup Canada, industry and government partners have a significant role to play to remove demographic and geographic barriers to funding accessibility.

Entrepreneurs are early adopters of new digital technologies but are struggling to keep up with the rate of technological change and turnover.

  • Over 93 percent of respondents have an online presence.
  • Seventy percent consider themselves to adopt new technologies before the majority of society, with 24 percent considering themselves innovators in the space.
  • Forty-three percent identified costs related to training, updating and maintaining digital technology as the main barrier to technology adoption.
  • Women are 20 percent less likely to leverage digital technologies when operating their business than men.
  • Opportunities to increase digital adoption amongst entrepreneurs include virtual training available to every entrepreneur when and where they need it; incentives and grants to up-skill teams and hire new employees with in-demand digital skills; and, support for programming created by and for women.

Entrepreneurs have ambitions to scale and reach new international markets.

  • Forty percent of respondents expect their yearly average sales to grow by more than 20 percent annually.
  • Forty-three percent are selling globally, and 29 percent of those who are not selling to global markets plan to in the near future.
  • The United States (90 percent), Europe (55 percent), and Australia (33 percent) are listed among top global markets for international expansion.
  • Startup Canada, industry, and government can support high-growth and international ambitions by working together to provide entrepreneurs with access to training, funding, and connections to grow in Canada and globally.

Networks, communities and incubators/accelerators are perceived to provide the most support to startup and small businesses.

  • 95 percent of respondents would recommend Startup Canada to their fellow entrepreneurs to access support and resources.
  • The government, regardless of level, as well as universities and colleges are perceived to provide little to no support.
  • Anchor companies and industry associations have the lowest support rating amongst respondents.
  • Funding (65 percent), sales (54 percent), and exposure (51 percent) are the most significant supports required by entrepreneurs to help them grow their companies.
  • Industry, government and academic institutions are well positioned to partner with Startup Canada and leverage its extensive network to raise greater awareness of entrepreneur programs and resources.

These strategic insights provide opportunities for Startup Canada, members of the Startup Canada Private Sector Leadership Advisory Council, broader industry partners, government, and academia to improve its support and resources for entrepreneurs, and to measure the state of entrepreneurship in Canada over time using this baseline data.