Five lessons from Innovate Financial Health’s inaugural accelerator
A reflection on Canada’s first accelerator for startups helping Canadians build financial resilience
Two years ago, I decided to leave my management consulting career to pursue an idea for a non-profit accelerator called Innovate Financial Health.
The goal was to improve the financial lives of Canadians by supporting innovative ideas focused on financial health and resilience. We saw similar programs around the world like the Financial Solutions Lab, Blue Ridge Labs, and Village Capital: Finance Forward already produce some incredible mission-driven fintechs like Propel, Dave, Edquity, and more. We wanted to do the same here in Canada.
You can read more about Why Innovate Financial Health in this blog post and about our learnings from interviewing Canadian fintechs and global accelerators in this report.
Two years later and we’re happy to announce that in July, Innovate Financial Health graduated our first cohort of four incredible startups (altruWisdom, PolicyMe, QUBER, and ZayZoon).
These four startups are helping Canadians make better financial decisions, access affordable life insurance, build emergency funds, and reduce the need for payday lending. And since January, Innovate Financial Health startups have collectively raised over $6.8 million in financing, added over 20 jobs, and most importantly helped thousands of Canadians improve their financial health and resilience.
Since January, Innovate Financial Health startups have collectively raised $6.8 million in financing, added over 15 jobs, and helped thousands of Canadians improve their financial health and resilience.
Some highlights include:
- QUBER partnering with local community organizations like Momentum in Calgary and WoodGreen in Toronto to facilitate matched-based savings programs for low-income Canadians, helping participants take the first steps to build their emergency funds.
- PolicyMe raising $3.3 million in financing and experiencing 37% month over month growth as more Canadians recognize the importance of life insurance and securing their family’s futures.
- altruWisdom partnering with Canadian mental-health startup OpenDialogue to launch MoneyDialogue, a free AI-powered money journalling program that helps Canadians rework their relationship with money.
- ZayZoon offering their service for free to essential workers during the pandemic, raising $3.5 million, and adding Marcos Lopez, Managing Director and Head of Shareworks by Morgan Stanley, and Ryan King, Co-Founder and CTO of Chime to its Board of Directors.
Despite a global pandemic happening in the middle of our first cohort, our inaugural cohort has gone even better than we could have expected. Below are five of our lessons from the journey so far.
Lesson #1: To recruit high-quality startups, build for inclusion.
Given Innovate Financial Health’s mandate, we had two non-negotiable criteria for startups applying to our program: 1) the startups had to focus on improving the financial lives of Canadians and 2) they had to have a product in the market already.
Because of these criteria, we knew we already had a relatively narrow pipeline of potential applicants. Our job was to make the rest of the program as accessible as possible so that we could select the highest quality cohort.
Some key pillars that we developed were:
- Guaranteed Funding: Each startup in our program received $25,000 in grant funding. This is rare in the Canadian startup ecosystem but we felt it was important to make sure money wasn’t a potential barrier for any startups wanting to participate in our program — something that only seemed right when we’re all about financial health.
- Equity-Free: By not taking equity in the startup, companies of all stages and founders of all mindsets can apply. Early-stage companies don’t have to worry about giving away equity too early. Later-stage companies don’t need to justify the program to existing investors. Non-profits and founders that have no intention of ever building venture capital-backed businesses could also apply.
- Hybrid In-Person and Virtual Model: Instead of requiring startups to move to Toronto for the duration of the accelerator, we had the startups come to Toronto for multi-day in-person sessions. This model makes it easier for founders that have caretaking duties to participate as well as startups with established home offices.
- Diverse Mentor Base: We’ve seen plenty of accelerator programs that have a mentor base that is primarily white and male. While these mentors can be more than qualified, it’s also a signal to potential applicants about “who” the accelerator is looking for. Over 40% of the mentors and facilitators that participated in the program were women and over 45% were people of colour.
Ultimately, this design resulted in 40+ applications from across Canada, allowing us to select a high-quality and diverse cohort. Three of the four startups are not from traditional Canadian fintech hubs. All have female founders or a female on their executive team and three have people of colour as a founder or on their executive team. Half have active participants that were also parents.
Despite having these design principles in place, we also recognize that these are not always enough to address systemic barriers and biases. Simply putting out a call for diverse applicants won’t work if those applicants don’t have access to traditional networks and avenues where our program is advertised.
There are still many ways for our next cohort to be more inclusive including:
- Recruitment: Almost 70% of our 40+ program applicants came from Ontario and the majority heard about IFH from us directly or from our immediate network. How can we access applicants in less represented parts of Canada (e.g., the North, Atlantic Canada) that may not be tapped into the traditional technology ecosystem?
- Application Process: Our application questions were fairly typical of a standard accelerator. Are there any barriers in how we’ve set up our application criteria and if so, how can we reduce these barriers? For example, SheEO has simplified its application to 10 questions, no pitch decks, no attachments, and no jargon.
- Selection: How can we incorporate a more diverse group of opinions in our selection process to ensure that we’re not biasing against certain populations or solutions?
- Lived Experiences: How can we incorporate more “lived-experiences” of financial vulnerability throughout the design and execution of the program?
Addressing diversity and inclusion in program design isn’t easy and there’s always more that can be done. But if we care about both doing the right thing and finding the best ideas serving real Canadians, it will be important for us to remain focused on inclusion as we continue on our journey.
Lesson #2: Hybrid models are the way to go
In the past several months, the pandemic has forced accelerators, including our own, to move to a virtual model. This experience has reaffirmed our belief in a hybrid in-person and virtual approach.
The virtual element improves access and flexibility while the in-person model creates deeper relationships between peers, mentors, and the broader community.
Specifically, the virtual element:
- Improves flexibility for founders (e.g., those with caretaking responsibilities)
- Expands the mentor and investor network to across North America
- Opens up the program to non-leadership team members
- Redirects funds to what matters most — delivering value for entrepreneurs
Read more on how virtual accelerators are good for inclusive entprenreuership support in this blog by our friends at Village Capital.
On the other hand, the in-person element of an accelerator:
- Establishes a stronger peer network via day-to-day interactions
- Builds cohort buy-in by establishing a safe space for the cohort to be vulnerable with each other
- Increases the likelihood of organic partnership opportunities
Back in January, we launched our accelerator with a kickoff event for our startups and 150 of our friends, mentors, and partners in the fintech and social impact communities. That event alone resulted in several partnership meetings and mentor relationships. There’s simply value in gathering together a ton of people that are all passionate about the same issue.
While our virtual Fintech for Good Showcase was similarly well attended, it was difficult to replicate the organic relationships that developed from the Kickoff event.
Moving forward, we strongly believe that hybrid is the way to go for Innovate Financial Health where content can be delivered virtually while in-person sessions are focused on fostering deeper relationships.
Lesson #3: Be strict on forcing mentor-startup interactions
For our program, we had recruited 80+ rockstar mentors from financial institutions (e.g., Interac, CIBC, Meridian), fintechs (e.g., Borrowell, Drop, Willful), venture capital firms (e.g., Luge Capital, Ferst Capital Partners), impact investing firms (e.g., Good & Well, Marigold), and more.
Instead of mentor matching, we created an “opt-in” mentorship model where mentors sign up to support startups across several formats including:
- Rapid mentor speed-dating events
- Focused one-on-one mentor meetings
- Panel discussions with other mentors
- Fireside chats
- Virtual introductions upon request from the startups
The mentors were sent periodic emails of requests from the startups that the mentors could then decide to respond to or not. At the same time, we relied on the startups to also “opt-in” by telling us specifically which mentors they were interested in meeting.
While our startups benefited incredibly from all the mentors that they did get the chance to meet, one of the faults of this “opt-in” method is that we were not able to effectively use almost a third of the mentors that had signed up for the program.
Even though mentors signed up and wanted to support, it was difficult to match specific opportunities with mentors. And without pre-agreed upon dates and a minimum level of commitment, it was easy for our emails to get lost in our mentors’ busy inboxes.
Similarly, we thought that startups would jump at the opportunity to meet as many mentors as possible. From the list of 80+ mentors, however, the startups on average made less than 10 specific introduction requests throughout the program. As a startup, it’s hard to know who could be valuable to you in the future simply by their title and background.
With the “opt-in” model we created, we were not able to effectively use almost a third of the mentors that had signed up to support the program.
As I reflect, I think a big reason we created this “opt-in” model was because of fear — fear that as a new program, we would be wasting the time of either our mentors or startups through unfruitful introductions.
Instead of minimizing the likelihood of unfruitful introductions, however, we should have been focused on maximizing the likelihood of fruitful ones. This means forcing mentor-startup interactions to happen and equipping the startups with the tools to benefit from any conversation.
Lesson #4: There’s value in going back to basics
When we started Innovate Financial Health, our intention was not to replicate the Entrepreneurship-101 type support that already exists in the Canadian ecosystem but to focus on the unique challenges that financial health fintechs face — challenges like establishing financial institution partnerships and navigating regulation.
We were surprised then, by how much our cohort actually enjoyed and valued sessions that focused on “Entrepreneurship-101” type concepts. Two of their favourite sessions were on value proposition with Joe Wilson and user testing with Alison Le Saux.
These concepts weren’t necessarily new to the startups. It is, however, easy to get lost in the day to day when running a startup. Sessions that go back to basics forced the cohort to revisit their assumptions to see if what they thought was true before still held true.
Our session with Alison Le Saux had our startups testing each other’s products in four rapid 15-minute sprints. Just by dedicating time for the founder to watch how someone interacts with their product can reveal underlying design flaws that may be causing confusion and drop-off. All of our startups knew that there were elements of their products that they could improve but it wasn’t until this session that they created a list of actionable changes.
Moving forward in our next cohort, we will continue to add sessions focused on the core aspects of building a business and a product. No matter the stage, it is always useful for a startup to take a step back and see whether their assumptions still hold.
Lesson #5: Get feedback early and often
Our most important realization is that every cohort will be different.
There is no such thing as a perfect design for an accelerator because the needs of each startup and cohort will vary. Every cohort will have different areas of expertise, internal dynamics, and needs.
Everything that we learnt above was because we asked our startups what they needed. By asking for feedback, we modified the program as we wen doing everything from changing the format of our mentor speed-dating sessions to removing all panel to creating the user testing session that we talked about in Lesson #4 and more.
At the end of the day, we won’t know what the next cohort will look like and what their needs are. We can make educated guesses based on this past year but we also have to build in room for feedback and change as we go.
As we tell our startups, “Talk to your customers. Get feedback early and often.”
Any comments or questions? Feel free to reach out at info@innovatefh.com or on LinkedIn.
This article was written in collaboration with Molly Willats, Research & Operations Associate at Innovate Financial Health.
