The rumors are true, The Toronto Venture Group is no more.
The TVG, like the Toronto Angel Group (which is probably dead too, more on this soon), is one of the many often-flirted with, rarely treaded on groups that court Canadian Startups to get on stage, or to send their business plans around. The effect on the startup was feeling more like they were being asked to take their pants off in the waiting room before going in to the Doctor’s office. More often than not, it was some sort of witch doctor behind the door anyway, and you would have kept your pants on if only you had known.
That leaves us with a slew of angel groups who are all still asking Startups to take their pants off well in advance of a typical show-all timeframe for a real relationship.
Do these groups actually work? One telling aspect is that many of them claim to model themselves after Silicon Valley groups. The problem is, there is no evidence (and conversations tell me otherwise) that these groups actually do many deals themselves. The world of Angel, Venture or other investment is about relationships. When you, as a startup, start to meet Angels and VCs, your focus should be completely on building a relationship with them, the deal can flow from that.
There are always exceptions to the rule, I know that b5media was funded out of a TVG event in Toronto pretty quickly. I don’t know of any others though.
Like I do our friends in the Den, I tend to question the value of these groups, especially the ones that charge upwards of 3000$ to the entrepreneur for participation (like First Angel Network), but it’s also important to recognize that the members of these groups can been keen, hungry and able investors. The trick is to pick them out of the pack and focus on dealing with the individual directly. Your $250,000 deal doesn’t need 4 weeks worth of legals holding it up when a simple note and issuance of shares could do the trick.
The obituary after the jump. Who wants to sing the requiem?
Effective May 18th, 2007 the Toronto Venture Group has ceased operations. As of the same day a proposal has been filed and all suppliers, sponsors, annual subscribers, members and angels will be receiving a communication package outlining the process that is underway.
The Board of Directors would like to acknowledge the support we have enjoyed over the years from our corporate sponsors, subscribers, members and those who have given so generously of their time as speakers, volunteers and board members. We are proud of our 17 years of service to the industry and we wish all investors, entrepreneurs, business founders and service providers a healthy future of continuous success.
It looks like TVG has a little bit of debt, on the order of $200,000, but has enough money to pay most of that debt.
- Mars: $17,1712
- Toscano Consulting: $18,311
- Brandhealth Communications: $48,844
- Marriot: $74,179
The group has about $17,000 in secured and $236,513 in unsecured debt. It looks like repayments will be on the order of 60cents on the dollar.
There is a note in the package: “Reduced revenue streams and increasing expenses have resulted in overhead costs exceeding reveneue earned and accordingly Venutre is unable to pay its debts in full as they become due.“
The official reason, sent along with a bankruptcy package to stakeholders, was a slightly obfuscated way of saying that the TVG became irrelevant.
The TVG couldn’t build enough goodwill, with their investors or a community of entrepreneurs, to support even marginal operating costs.
That isn’t a criticism of their work, or the very real effort that was put in to building the TVG and it’s worthwhile goals, but it is a reflection on the sheer amount of ambition and effort it takes. It might just be that creating a community of investors AND entrepreneurs is just plain impossible.
The entrepreneurial support industry has experienced changes in the recent past.
Nationally and within the GTA, there have been extensive competitive opportunities for both business founders and business funding organizations.
The industry reality, coupled with a slowing of funding due to legislative changes within Canada has redirected and refocused the venture capital industry.
Sponsorships have been redirected to targeted areas of focus for funds as opposed to general networking.
Therefore, the market is no longer sufficiently supporting the efforts of the organization.