The Velocity Fund
The Velocity Fund is an investment and grant program that provides >$390,000 in funding each year to local startups through its Velocity Fund $25K investment and Velocity Fund $5K grant programs.
Velocity is committed to providing funding in a way that is useful to startups by incorporating application, interview, and pitch experience into its funding program.
Each year Velocity hosts three pitch competitions where the Velocity Fund awards $120,000 to winners.
Velocity Fund $25K – Startup Investments
Every four months, startups can apply to compete for one of four $25,000 investments and entrance into the Velocity Garage startup incubator. The top applicants are invited to interview with a panel of Velocity leaders and alumni, and the top 10 are invited to present their pitches at the Velocity Fund Finals.
Velocity Fund $5K – Student Grants
Students with innovative ideas are invited to pitch at the Velocity Fund $5K Qualifiers, held each term. Up to 40 teams pitch over two nights to a panel of judges from the local startup community. The top 10 are invited to pitch at the Velocity Fund Finals for their chance to win one of four $5,000 grants.
The Velocity Fund was established in 2011, inspired by a donation of $1 million from Kik founder and Velocity Residence alumnus Ted Livingston, who was 23 years old at the time. In December 2013, Velocity received a donation from the founders of BufferBox, Mike McCauley, Jay Shah and Aditya Bali to encourage the creation of a hardware award given the additional costs to build successful hardware startups. In March 2014, Velocity received a donation of $1 million from renowned Waterloo Region angel investor Mike Stork. In 2019, the Velocity Fund $25K evolved into a startup investment fund, while 5K remains a student grant fund.
Velocity Fund Finals Pitch competitions
The Velocity Fund culminates with 2 pitch competition events, at which students and/or startups will receive grants and investments.
The Velocity Fund $5K occurs on the University of Waterloo campus, where 10 students who qualified at our $5K Qualifier events, pitch their ideas to hundreds of spectators for the chance to take home one of four $5,000 grant-prizes to help bring their idea to life and build a business. Event attendees can meet the competitors and see product demos. This is a great way to get a glimpse of raw entrepreneurial output from UWaterloo and get inspired by what’s being built by aspiring entrepreneurs.
At the Velocity Fund $25K event, ten scalable startups will pitch their companies for the chance to secure one of four $25,000 investments. Event attendees can meet the competitors, see product demos and schedule 1:1 meetings for further dialogue, a highly productive format for angel and pre-seed investors looking to deploy capital or seed-investors looking to build relationships with high potential early-stage startups.
Velocity Fund $5K
In order to qualify for the Velocity Fund $5K, a current University of Waterloo student from any faculty (who is a co-founder of the team) must make a 3-minute pitch in front of a panel of judges at one of two $5K Qualifiers. Only one member of the team is able to make the 3-minute pitch. These $5K Qualifiers provide an informal pitching environment complete with full stage and microphone. The top five teams from each night are selected to participate in the Velocity Fund Finals, where they can compete for one of four $5,000 prizes, which are awarded by our panel of judges.
Winners of the Velocity Fund $5K must incorporate to receive the grant funding.
- May 27, 2019 – Applications open for Velocity Fund $5K
- June 16, 2019 – Applications close for Velocity Fund $5K
- July 3, 2019 – Velocity Fund $5K Qualifier: Night 1
- July 4, 2019 – Velocity Fund $5K Qualifier: Night 2
- July 18, 2019 – Velocity Fund Finals $5K
FAQ ABOUT VELOCITY FUND $5K – STudent grants
Q: What types of companies are eligible to apply to the VF $5K competition?
A: All companies are eligible to apply to this competition. There is no general area of expertise that we require – your business can be a service or a product. In fact, you can simply pitch a great idea, without actually having the product/service finalized – it’s a great way to get feedback and experience pitching.
Velocity Fund $25K
- There are 2 initial eligibility paths; satisfying either of these ensures your eligibility.
a. Your startup has recently been part of the Velocity Garage incubator for at least 3 months OR
b. Your team has at least one co-founder who is currently, or has been, a University of Waterloo
student, who owns at least 20% of the company.
i. This individual must have been a continuing full-time student within 2 years OR
ii. completed their degree within 10 years and started their company less than two years ago.
- Products must be tech-based and core to the company’s business model, but we do not require it to be aimed at any particular sector.
- You are not eligible to apply if your startup has received more than $100,000 in external funds (convertible debt, equity, etc.), including government grants (e.g., OCE SmartStart).
- All teams will be required to sign/execute a post-money SAFE investment document and a Memorandum of Understanding (MOU) covering the basic terms associated with the funding provided by the Velocity Fund. The post-money SAFE investment document covers the terms of the investment. The MOU focuses on the mechanisms and basic company structure requisite to obtaining the investment (including incorporating, setting up IP assignments, setting up a bank account, etc.)
STAGE 1: Written Submission
You will be required to submit information before the deadline that provides a general outline of your business, including the name, product concept, market opportunity and team profile. Written submissions will be judged based on their clarity, problem statement, and size of the market opportunity.
The team profile is particularly important. It should include how well your team works together, how your skills will complement each other, and how passionate you are about the problem you’re solving.
STAGE 2: Interview
If your team is chosen based on your written submission, you will be granted an interview. All interviews are 15 minutes in length and will include two key components: a three-minute pitch and ~10 minutes of rapid-fire questions from the judges. You will be expected to answer questions from the judges about your business model, team composition, market, challenges, and ability to execute.
Your three-minute pitch should include the following elements:
- Market and size
Please come with a product demo, if possible, so that we can see how you plan on executing your vision. If your product does not have a demo, be prepared to outline exactly how you see it working.
STAGE 3: Velocity Fund Finals
If you have a successful interview, you will be asked to participate in the Velocity Fund Finals $25K in front of an intimate setting with angel investors and early-stage VCs. You will be given three minutes to pitch your business to independent judges, based on the high-level pitch provided in Stage 2.
The winners will be chosen based on how they meet the criteria during the interviews (evaluated by one set of judges) and how they meet the criteria during the pitches at the Velocity Fund Finals (evaluated by a different set of judges). The two scores, each weighted at 50%, will be used to form the final results.
Details coming soon.
FAQ about velocity fund $25k – startup investments
Q: What types of companies are eligible to apply to the VF $25K competition?
A: We are focused on scalable companies (software, hardware, science, and social impact businesses) that use technology as a core aspect of their business, such that the business is not possible without that technology. Service companies such as consulting businesses are not eligible.
Q: Why the focus on tech companies?
Growth – startups should be focused on growth as the primary objective, and it is the search for a business that can grow at astounding rates that drive startups. Read Paul Graham’s essay on growth.
Expertise – The University of Waterloo is well-known around the world for being able to build incredibly talented people with tech skills from a variety of programs. We want to leverage those skills, and a passion for solving different problems, to help those students build their own companies.
Ecosystem – the local community has cultivated an amazing ecosystem that supports tech companies, including organizations like Communitech, the Accelerator Centre, and others. Although Velocity provides a ton of great services, it is critical that we also leverage the support of other programs.
Q: Do you have to compete in the $5K Qualifier to participate in VF $25K?
A: You do NOT need to participate in the $5K Qualifier to be eligible for VF $25K.
Q: My company has previously won the VF $25K, can it reapply to future VF competitions?
A: No, companies that have previously won the Velocity Fund $25K are not eligible to reapply.
Q: Are all of the interviews on one day? What happens if we are unable to attend that day?
A: Yes, all interviews happen on the same day, with no exceptions. An in-person interview is preferable however we are able to video-conference or call people into the interview if absolutely necessary.
Q: Velocity Fund $25K was a grant before, am I correct?
A: Yes, you are. We made some changes in January 2019. You can read more about it here.
Q: Since this is an investment, can you invest more than $25K in my startup if I win?
A: Potentially. Our goal is to raise enough capital to double the funding we can provide (from $25,000 grant to $50,000 investment). However, for directional guidance to applicants, we’re advising that it will be at least the same as the current amount.
Q: What are the terms of the investment?
A: The investment will be on an MFN post-money SAFE.
Q: What if I am still interested in a grant? It’s more favourable to my startup.
A: Strictly from the startup perspective, yes, a grant is more favourable than an investment. Through the standardization of the investment terms and the terms themselves, the investment is still highly favorable and friendly to startups.
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General Velocity Fund Questions
Q: What’s the difference between the Velocity Fund $5K and $25K?
A: The $5K focuses on UWaterloo students building or aspiring to build an early-stage startup still cutting their teeth in the startup world. As an individual or as part of a small team, these students want to gain experience pitching and receive feedback from the greater startup community. Any Waterloo student from any faculty can showcase their work at the Velocity Fund $5K event, once they have qualified, by winning a finalist slot at one of our $5K Qualifiers.
The goal of Velocity Fund $25K is to provide early-stage funding to startups (no academic affiliation to UWaterloo is required) to get their product off the ground. The business must be tech-based and a working prototype is strongly encouraged, to help demonstrate your ability to execute. When a team wins they should have a fully formed, cohesive team ready to execute on the business.
Have a question about the Velocity Fund that’s not here? Email us at email@example.com.