Gaming companies getting started in Canada have a new option to help them through the rough early stages of founding a company.
Canadian game incubator Execution Labs (XL) announced Monday that it has teamed up with BDC Venture Capital to offer $150,000 in convertible notes to firms that graduate from the labs’ incubator program.
Montreal-based Execution Labs, which announced its own funding last fall, will help accelerate the growth of independent mobile-game studios by providing the financial support to early-stage companies.
The funding has a structure like a loan at the time of the investment. Its intention is to help new studios weather a period that is possibly very tough for them financially, as they continue working toward generating revenues and positioning themselves to successfully raise subsequent rounds of funding.
Senia Rapisarda, vice president of strategic investments and initiatives at BDC Venture Capital, said in a statement, “Game development has for years been an important part of Canada’s technology ecosystem. We are excited to partner with Execution Labs and look forward to helping the best studios coming out of XL fulfill their potential to power our games economy.”
Jason Della Rocca, co-founder of Execution Labs, said in a statement, “The capital we provide during the course of the program is really designed to fund the teams’ game development and initial go-to-market efforts. The BDC Venture Capital convertible-note program now gives our graduating studios time to continue running their games as a service and ramp their revenues after they leave XL.”
He added, “In addition to giving our teams more time to get traction, having a note in place from a reputable investor like BDC Venture Capital makes it easier for them to attract additional financing to expand their studios and release more games.”
The teams that are currently in the incubator program will become eligible, as will future participants. The convertible notes will eventually become equity when the new studios raise their first equity financing.
Other tech incubators such as Y Combinator, Tech Stars, and FounderFuel offer resources for their participating startups, but indie game studios haven’t had access to a convertible-funding program in the same depth that Execution Labs intends to provide, the company said. Since Execution Labs already delivers some seed funding to its teams, the total financial package available to those who enter the program will now reach hundreds of thousands of dollars. The incubator will start accepting applications for its second class this fall.