StartupNorth

Mark MacLeod just wrote a post about Canadian VC that cuts to the chase

If there are any clouds on the horizon, they relate to the disappearance of the US / Canadian border when it comes to VC. When I first entered the startup World, you had no choice but to raise seed and series A in Canada. Only then could you tap the US funding markets. That’s no longer the case.

[ . . . ]

There is a perception (rightly or wrongly) that US investors are better than Canadian ones. And that given the choice, founders would raise in the US. Whether this is true or not is not the point. It’s the perception and with the borders coming down it represents a real risk to Canadian investors.

Mark did it in the nicest possible way, so a lot of people may not have noticed that he just condemned the entire Canadian VC model. It was something I didn’t even have the guts to do lately, so I was surprised to see Mark call the spade a Spade and get on with the conversation.

The border is gone and the game has changed. Mark argues that Canadian VCs need to pay up more, build their brands and build their networks. That’s a great start.

Canadian entrepreneurs have been told for years to step up and build global companies. It was hard and confusing to hear at first, but I think we’ve managed to do it. Whether it is Tobi in Ottawa, Kirk in Toronto, Ryan in Vancouver, Oleg in Toronto, Mike in Toronto, Kenshi Wilkins and Eric in Vancouver, Yona in Montreal, Temo in Montreal etc etc etc [I've missed so many here -- more to come on David's Hot Shit List] — I would argue that Canada is producing more world-class entrepreneurs more quickly than ever before.

We’ve spent the last 10 years being told we weren’t bold enough and need to think bigger. The argument has shifted and our startups now know what it means to be world class and they are doing it.

It’s time for the Canadian VCs to step up and do the same.

It doesn’t take nearly as much to get a US based VC to take a look at a Canadian deal anymore. If they have never done a deal in Canada before they usually have a friend who is just a call away who has and it can be demystified pretty quickly. The legal headaches are gone as well.

If you are a VC in Canada, focused on the Canadian market, then you have far more competition for deals now than you did even a few years ago and the job is more thankless than it has ever been.

So here’s the challenge for the the new players in Canada. Rho, Celtic, OMERS, iNovia, Relay, Golden, Klass, Wertz, Round13, etc…

Entrepreneurs are going to start telling a story about under-paying, small thinking and isolated VCs. As US VCs roll off the redeyes in to Vancouver, Edmonton, Toronto, Montreal, Halifax and elsewhere it should be you who is bringing them to town to see great deals which are priced right and which are built to succeed from right here in Canada.

The challenge is that you, like the entrepreneurs you fund, now have to be world class. That probably means being on a plane more often and pulling the trigger on deals within days, not months.

Nobody should start a VC fund in Canada today unless they want to work as hard or harder than any startup founder they will fund.  It is no longer a job for ex-bankers and management consulting dropouts. The job is hard, mostly thankless, and more competitive than ever.

That’s why I love this shakeout we have undergone and the one that is continuing today. VC in Canada had to go through the wringer so that we could end up with a handful of the best and most capable operators who can help springboard Canada further on to the world stage. We aren’t going to do it through myopic provincial funds, big corporate funds or economic development agencies.

It’s going to happen through hungry hustler GPs who have something to prove and only a little time to do it in.

Canadian VCs need to be startups themselves, because in the end only Startups can save venture capital in Canada.

Jevon MacDonald

co-founder of Startupnorth.ca

More Posts - Website

 Some rights reserved by hyfen

When Jevon and Jonas and I first met back in 2006 it was because we shared an interest in early stage, emerging technology companies. We were excited to have found other people in Toronto that were interested in the same things. Startups. Technology. Emerging business models. Funding. It was great. It was early days, it was easy to connect with others to figure out who was interested. And to move things forward. We wrote about the stuff we found interesting, hosted events that we wanted to attend (anyone remember StartupEmpire), and have tried to be tireless promoters of high potential growth technology startups in Canada. We’ve tried to connect engineers and designers. But as the community has grown we’ve done a very good job outside of repeated participation at events in connecting potential cofounders.

How do you meet a cofounder?

This is where Founder Dating comes in.

FounderDating brings together super talented entrepreneurs with different backgrounds and skill sets to start innovative new companies. All too often you know people with similar backgrounds and skills sets to your own.  We help you find co-founders with complimentary skill sets.

The thing that Founder Dating brings that are crucial:

We need to unlock Founder Dating for Toronto. Get on it!

David Crow

David Crow focused on product design, customer development and go-to-market implementation on $0. He is available as a consultant. He is a mentor at UW VeloCity, Jolt and FounderFuel. Follow him on Twitter @davidcrow or at DavidCrow.ca

More Posts - Website

What has he done for us lately?

I don’t often look to politicians to help out startups. Typically when they do, they mess it up and make it worse than it was before. And probably if I looked at Rob Ford’s track record of do-little-ness, I’d think even less of trying to push him to get involved in our just blooming, fragile startup ecosystem.

But, being here in New York the last few months, I have seen Mayor Bloomberg involved in some helpful, innovative projects. In fact, in a fascinating report about the New York startup ecosystem titled “New Tech City“, on page 24, specifically outlines the “Bloomberg Effect” and some of the tactical steps he’s taken to bolster New York’s early stage, rising tech startup community.

“New York’s tech sector has benefited greatly from an unprecedented level of support from Mayor Bloomberg and his top economic development officials.” –New Tech City Report

I’d love to hear this said about any government entity at any level in Canada.

Now I know some of you have distant (errrr… recent) memories of political thoughtfulness gone wrong (cough cough, the inadvertent disappearance of the entire angel investing class). The typical refrain I hear from folks in the tech scene is something like “Gov’t should provide money and get out of the way”. But I’ve seen the Bloomberg administration do a lot more, successfully.

For instance, here are two extremely low cost areas where city politicians can help startups – promotion and their powerful networks. I’ve been at four startup events here in New York in three months, and Mayor Bloomberg has been at two of them.

“He’s visited scores of start-ups, given major speeches at local industry events such as Tech Disrupt and the NY Tech Meetup, and last year installed a chief digital officer to help coordinate promotion efforts. As the “mayor” of City Hall on Foursquare, he’s even become an avid user himself.” — New Tech City Report

The city hosts an event called NYC Big Apps. Basically the city has been opening up up more and more data each year and runs a contest to see who can build the best mobile apps based on that dataset. The event has about $50k of awards, the grand prize winner gets $10k. The event looks to be partially covered by sponsors (BMW’s venture arm seemed to be prominent at the event). Folks from NYC’s Economic Development Council are there en masse, helping facilitate introductions between investors, well networked folks & startups. If you are a winner, you’ll get a chance to pitch to some of NYC’s best investors (many of whom support the initiative and help judge the apps themselves) – Fred Wilson et al. Not only can you see Mayor Bloomberg at events the city runs, but you can see him at other big events in the city – Disrupt, NY Tech Meetup, etc.

Wouldn’t you love to see cities get involved with key startup folks in the city (like say Howard Gwin or Boris Wertz) and run some interesting events akin to Big Apps. I’d also love to see prominent politicians supporting existing events like say Demo Day. How about hanging with Rob Ford at Startup Drinks?? Yeah, didn’t think so… but maybe a hipper, cooler city councillor?

On top of that, politicians could easily use their followership and social media outreach tools to preach and promote local startups. I’d love to see Mayor Ford tweeting about reading his Kobo, or hear Vancouver’s local government talk about their usage of HootSuite. I’d love to see some city councillors buying a new shirt using Buyosphere. Anything really to show they know entrepreneurs exist and can use every piece of help they can give.

Why Isn't Rob Ford Talking About Toronto Startups Like This?

Less talked about in the NYC Tech City report is that NYC is overhauling their own contracting/vetting procedures so smaller startups can bid and have a chance on winning meaningful business with the governments. Why shouldn’t City Hall’s use Freshbooks for instance, or FixMo? Presumably it would offer some real cost competition vs the usual city hall tech vendors.

Or better yet, how about introductions and biz dev help? New York’s Economic Development Committee actually runs events abroad (like in China), where they use their network to provide trade excursions for local New York startups. I know, because we participated in one of them (in China). We had the chance to meet lots of industry leaders in China and received meaningful business development introductions.

And then there are the “dream-big” projects. New York has created a private-public partnership, providing millions in funding to build a new engineering school with Cornell, in New York City. Or how about a high school devoted to software? I mean we have high schools for the arts littered across Canada… and I’m pretty sure that a software oriented high school might have a bit better of a business case than say… the Etobicoke School For The Arts.

Cornell's Proposed New Engineering School In NYC

So, dear Canadian politicians, I dare you to be creative and get more involved. You can actually help startups out! Talk to influential key people in your local startup scene and ask them “how can we help?”. Use stuff created by local startups, evangalize and promote the crap out of them.

And I’d love to hear more from our audience on ways that your local gov’t has helped (or has not helped) from within your own communities.

PS – A weird corollary post might be titled – “How startups should get involved in government and politics”. When are some of you going to become city councillors and mayors? :)

Dan Morel

twitter: @dpmorel, email dan dot morel at gmail Dan is CTO and co-founder of Peek (www.peek.ly). Previously, he ran around the Caribbean (from Haiti to Trinidad) launching new businesses & products for Digicel - living in Kingston, Jamaica. Before that was a very early employee at Redknee, headed product development on their path to IPO. I'm a hacker and generalist business guy with my roots from University of Waterloo, Computer Science. linkedin: http://www.linkedin.com/in/danmorel

More Posts