If you are a founder or CFO, you’ve probably heard it: “You’re leaving money on the table.”
When you are running a startup, the pressure is on, and every dollar counts. So you can’t help but wonder what support is out there that you are missing.
Maybe someone on a founder panel told you to “just file for SR&ED.” No explanation. No next steps. Or you saw a peer on LinkedIn celebrating $500K+ in government funding for their pilot. Same stage. Similar project. Big smiles, big cheque. And no idea how they found it, let alone won it.
So, you are probably wondering: What do they have that I don’t? How do they even know how to do this? And how can I navigate this world?
Let me introduce you to the world of non-dilutive funding (NDF): money that helps you build and grow without giving up equity. Today we will chat about two of the most common forms: SR&ED and grants.
SR&ED (Scientific Research and Experimental Development) is a federal tax incentive that gives you back a portion of what you spend on eligible R&D work. Grants are funding from government and agencies to support projects you are planning, and they can exist in many forms, such as non-repayable contributions, cost-sharing programs, 0% interest loans, and vouchers. Both of these put money back into your business, but they work in completely different ways, and mixing them up costs companies money and time (more money).
I’ve worked on both sides, first in grants and now in SR&ED, and I’ve seen founders chase the wrong one for the wrong project at the wrong time.
What’s the difference? In my opinion, it comes down to three things:
- Retrospective vs. prospective
- Technical vs. commercial
- Eligibility vs. competition
1. Retrospective vs. Prospective
The first big difference is timing: both when you go for it and when the money shows up.
Here’s something that surprises a lot of founders: both SR&ED and most grants are reimbursement-based. You spend the money first and get it back later. The real difference is when you ask.
- SR&ED looks back. You do the technical work, then claim it after your fiscal year ends, with up to 18 months after year-end to file and no pre-approval needed. If the work meets the eligibility criteria and it’s well documented, you get a portion of your costs back.
- Grants look ahead. You apply before the work starts, often within specific intake windows. Once you are approved, you do the work, pay the expenses, report on your progress, and then get reimbursed. Funders are betting on where you are going, not rewarding where you’ve been.
This is where I often see founders get caught. A client comes to us excited about a project kicking off next month and asks, “Is there a grant for this?” Maybe, but finding the right program, applying, waiting for review, and signing an agreement can easily take six months or more, and most programs won’t cover costs incurred before approval. By the time you are approved, the project is already done.
The takeaway: SR&ED rewards work you’ve done. Grants reward planning. If you are in the middle of a project, consider SR&ED; if you want grant funding next year, the time to start is now.
2. Technical vs. Commercial
The second big difference is what each one looks for in your projects, and it changes how you tell your story.
- SR&ED is about the technology. The CRA wants to know why you did the work (to advance scientific or technological knowledge) and how you did it (through a systematic, hypothesis-driven process). What was uncertain? What did you try? What went wrong, and what did you learn? Your claim is built on the technical challenges, not on how big your market is.
- Grants are about impact. I like to think of a grant as a funding agency or government body buying in to your company. They are investing in you, so they want to see a return: jobs created, revenue growth, strong IP, and real economic benefit to the province or country.
This is where the same project can look completely different depending on who’s reading it. Some grants are R&D-focused and overlap with SR&ED, but many aren’t. A grant might cover only travel, capital equipment, or one specific hire. Pitching a project in the wrong way (too technical for a grant, too commercial for SR&ED) can sink an otherwise strong application.
Working in grants taught me to focus on impact and where the work is going commercially. Working in SR&ED taught me to truly understand a technology and what makes it different. You need both lenses to see the full funding picture.
The takeaway: SR&ED wants the technical details. Grants want the business case. The strongest advisors know how to tell both.
3. Eligibility vs. Competition
The third difference is whether you are competing for the money, or simply qualifying for it.
- SR&ED is eligibility-based. If your work qualifies and you document it properly, you get the credit. You are not up against anyone else’s claim. In fact, last year Canadian companies claimed $4.9 billion in SR&ED credits, and 90% of claims were accepted as filed. And as of 2026, the program is more generous than ever: Canadian-controlled private corporations can now earn the enhanced 35% refundable credit on up to $6 million of qualifying spending each year, double the old $3 million limit.
- Grants are competitive. You are fundamentally submitting an investment bid. Success rates vary a lot depending on how much funding a program has, how many companies apply, and even which province you are in. Ontario programs, for example, can be far more competitive than Alberta programs.
This is where qualifying isn’t enough. A grant application can check every box and still lose to a stronger one. In my experience, what wins comes down to:
- Relationships and networking, so program officers know who you are before your application lands, but also understand what they are really looking to invest in.
- Timing: the right intake, the right project, the right stage.
- Proof of commercial traction, like customers, revenue, or pilots that show the investment will pay off.
- The right partners and letters of support.
- A clear return for the province or country: hiring potential, strong IP, and real economic impact.
The takeaway: SR&ED is a rebate on work you’ve done. Grants are an investment bid you must win. Qualifying gets you in the door, but strategy is what gets you funded.
So, Which One Is Right for You?
Usually, both. SR&ED recovers what you’ve already invested in R&D, and grants fund where you are going next. But there’s a catch: they don’t sit in separate boxes. When a grant covers expenses, you are also claiming for SR&ED, that assistance reduces your SR&ED claim. You can’t get paid twice for the same dollar. Using both well takes a plan: which project goes where, which costs each program covers, and when to apply for what.
That’s where having one team that understands both makes the difference. At Copoint, our team of scientists, engineers, and CPAs brings extensive experience in navigating the world of NDF.
So, are you leaving money on the table? Maybe. Let’s find out. Reach out anytime. I’m always happy to chat.
Aiea Mansour, MSc, is an Innovation Funding Advisor at Copoint
