Phase I-Tough Capital, Networks and Angels
The first two phases are the proving for the venture. During this period the entrepreneur has only an idea or concept that must be established by the market. In the first place the funding for the company comes from what Raymond Kao refers to as “sweet capital, personal funds and love money.” The latter term refers to family funding from members who, perhaps not having the faith in the venture the entrepreneur does, make their commitment on the strength of family relationships.
In this period the entrepreneur has access to a number of systems that can add to the company’ s capital stock. The federal and provincial government have a number of developmental programs to assist the new venture. The National Research Council’ s Industrial Research Assistance Program (IRAP) provides 75 percent funding support for developing new or improved technologies. Provincial governments often assist in partial financing of market studies. In British Columbia the Science Council of British Columbia provides up to 75 percent funding for market research.