SR&ED Funding for Startups: How to Avoid Emergency Fundraising

The startup funding landscape is brutal. But what if there was a way to extend your runway without giving up equity or begging investors for a bridge round?

The Challenge: A Familiar Startup Dilemma

Imagine this: You’re a Canadian Fintech startup with a solid team, innovative product and a clear market opportunity. You’ve successfully raised seed funding and are building toward Series A. But then reality hits, sales cycles are longer than expected, development costs are rising and your cash runway is shrinking fast.

This was exactly the situation facing one of our clients earlier this year. A Toronto-based company, developing innovative algorithmic trading solutions, found themselves stuck between funding rounds. With just a few months of payroll remaining and critical contractors to pay, the pressure was high.

But the irony is that they were sitting on over $500,000 in eligible SR&ED refunds, but lacked the time, the resources or expertise to file their claims while fighting for survival.

The Solution: Strategic SR&ED Funding

This is where the power of the Leyton x Easly partnership became game changing.

Phase 1: SR&ED claim preparation

While the startup’s team remained focused on product development and customer acquisition, Leyton’s expert consultants stepped in to:

Conduct a comprehensive review of their R&D activities
Identify and document all eligible expenses
Prepare audit-ready SR&ED claims for both current and previous tax years
Ensure maximum compliant refund amounts

Phase 2: Immediate Capital Access

Rather than waiting 12-18 months for government processing, an Easly Advance can provide:

Immediate capital against accrued SR&ED claims
Capital deployment within weeks, not months
Flexible draw-down structure allowing funds access on-demand
Competitive rates with no equity dilution

The Results: From Crisis to Competitive Advantage

The transformation was truly remarkable:

6 months of additional runway secured without raising external funding
Development team kept intact during critical product development phase
Emergency down-round avoided, preserving equity value for Series A
Strategic optionality maintained, reducing pressure on funding timeline
Competitive positioning strengthened through continued R&D investment

Why SR&ED Funding is Effective For Your Startup?

Our client’s story illustrates a fundamental shift in how innovative Canadian companies should view SR&ED Funding.

The best part? Their SR&ED claim was 100% accepted by the CRA on first submission, a testament to Leyton’s meticulous preparation and audit-ready documentation.

This success wasn’t just about paperwork. Throughout the process, Rob Senior Manager in Innovation Funding, provided invaluable guidance, ensuring every eligible expense was captured while maintaining full compliance with CRA requirements.

Rob’s expertise in navigating complex R&D activities for algorithmic trading solutions meant our client could focus entirely on their core business while we handled the intricacies of SR&ED optimization.

Rather than simply waiting for annual refunds, forward-thinking startups like this one are now leveraging these receivables.

About Easly

Easly is your partner in SR&ED financing. Easly’s mission is to provide funding that suits the needs of Canada’s innovative companies: simple, predictable, non-dilutive capital, delivered on an on-going basis.

Easly works with Canadian companies of all sizes and types, providing advances on expected Scientific Research and Experimental Development (SR&ED) refunds to fuel growth, accelerate commercialization and help innovators deliver impact.

Easly is Canada’s leading SR&ED finance provider, providing the right capital, at the right time. With their streamlined, online application process, your business could be approved for funding in as little as 2 weeks.