News

Hi StartupNorth, interested to know your thoughts. Reaction here to stories yesterday about recent spate of exits, including sale of BlueCat, has been overwhelmingly positive (actually, not a single dislike-y emoticon deployed on two posts I made on the subject), but in other venues (Twitter, comments under my BlueCat story at the Globe site, and some private conversations) I've seen some of the kinds of reactions we've traditionally had from some quarters in Canada - with comments like, Our tech companies sell out too soon, for too little, We'll never have a national champion in tech if this continues, We're destined to be a branch plant economy, etc etc. Seems to me there's quite a disconnect between pundits, government types, other lamenters, and people like you who actually create and build innovative companies, participate actively in the ecosystem and create wealth. I know most of you are heads down and extremely busy building your companies, but would be curious to hear what you'd say in response to those on the other side of the argument - many of whom play an active role in shaping the discussion and policy-making related to the innovation sector. ... See MoreSee Less

Ben Lucier, Lauren Crerar Linton and 22 others like this

View previous comments

April DunfordI think the tech folk who feel negatively about exits like this (and there are plenty) wouldn't post about it on Startup North.

2 days ago   ·  6
Avatar

Jesse RodgersThat is complicated. As long as you can draw lines from the exits to multiple opportunities being created for new and exciting things then it is all positive news.

2 days ago   ·  6

1 Reply

Avatar

David JanesYou don't owe anything to a concept.

2 days ago   ·  1
Avatar

Hongwei LiuSean I think it's two different contexts. On SN, no one would say to their peer "congrats on graduating UoT, but hey you should have gone for Stanford." It'd be a dick move. But the "pundits" are saying "it'd be nice if we had more Stanford grads too." edit: the former is congratulating someone on years of hard work. the latter is a more general policy discussion

2 days ago   ·  18

5 Replies

Avatar

Matthew Basil GardnerI'm with Hongwei, I think what we want to see shifting on a macro level is a discussion people would have here separately from looking on the micro level of an individual sale, financing, etc. I would never fault a Founder for taking a buyout that makes them happy (unless it really screwed others over directly) but the macro shift we need starts way earlier in a company's lifespan in my opinion. It starts with the smaller and less risky funding rounds we see here, how comfortably founders are acceptably allow to pay themselves/live before an exit, and the frequency at which offers come in here compared to in the valley (and a lot more). If we want more billion dollar exits here, IPOs, etc. the messaging and funding that early stage startups encounter here needs to change. You can't take someone who's been at it for years and change how they feel about an offer, it's a mindset that reverbs here from the moment you start your business.

2 days ago   ·  2
Avatar

John Philip GreenSean, I think Hongwei nailed it. In this forum we celebrate each other as peers, and we expect each other to operate in each own's economic self-interest. How could we not celebrate Richard and Michael for such an astounding achievement! Separately, we may feel, as Canadians and armchair policy makers, that it would be great to have more Canadian companies get big and remain independent.

2 days ago   ·  22

1 Reply

Avatar

Mike ShaverThose people shouldn't sell their companies then.

2 days ago   ·  4

1 Reply

Avatar

Varun MathurI want to help build the next tech-equivalent of Starbucks, being based here in Canada, preferably. It will happen over decades. Have patience, my anonymous troll friend in the Globe and Mail comment section. I am working hard, just for you. While I have your attention, may I point out what you have done for me ? Nothing, at all! The amount of financial support available in Canada to fledgling tech entrepreneurs lags, by a factor of 1000, to the US (private) and to China (public). So if someone here is able to have any sort of an exit - than in itself is a spectacular achievement. Good for them! Do you know by comparison how much we are spending on Canada's 150th anniversary celebrations ? $500 million! Funding tech entrepreneurs with crazy ideas is not a national priority here. Our free market doesn't have the US-like private capital; and our government does not fund this as a national priority, unlike the Chinese who are spending $338 BILLION towards high-risk early stage tech startups. Here is an idea - in the next election, why don't you vote for someone who promises to make tech entrepreneurship a national priority ? Someone who is not afraid to point out how Canada by and large missed out on the enormous creation of wealth which has happened in the past 18 years in the technology sector despite having the people talented enough. www.theglobeandmail.com/opinion/editorials/why-exactly-are-we-spending-500-million-on-an-annivers...

2 days ago

5 Replies

Avatar

David OssipSean Silcoff Daniel Debow I am more surprised that no one has commented about the rumors of the next budget increasing including rate of capital gains. Almost as is the federal govt is encouraging successful entrepreneurs to leave Canada and build elsewhere.

2 days ago   ·  6
Avatar

Michael SerbinisNot every company in every sector is meant to be a global standalone giant. You've got a responsibility to your mission and also to shareholders. I congratulate all who've sold recently - encourage them to have fun, live, enjoy and think about new projects to get involved w when they're ready to jump back in.

2 days ago   ·  33
Avatar

Julian D LegrandFrom what I see right now, and maybe I'm seeing things a bit differently, as a country we're more or less building a strong foundation and ecosystem that is feeding itself with exits from companies that aren't necessarily looking to be "global giants." At least, not yet. By having more early-stage companies that exit to larger players, we grow our community and investor attention, which I don't think is a bad thing. More people will look at Canada for investment and, at the same time, founders here will refine their own abilities to build and scale, putting them in a better position to go for big-builds in the future. I don't think strengthening foundations and using exits to learn and grow is a bad thing right now. Would love to hear your thoughts on this.

1 day ago   ·  7

1 Reply

Avatar

Mark SkapinkerSean: I think that many of the experienced folk on StartupNorth, and those responding to you here, see that the Canadian industry does not need huge companies to create huge success and an incredibly successful industry. Bluecat (and the Hyatt brothers) is a great example of the type of success that we celebrate and hope for many more of! The reality is that history has proven that you can only create Facebook, Google, Airbnb, Uber, Apple in California. Nowhere else in the world does the infrastructure of multi-stage investors, talent, customers, culture exist to be able to do that – not in a huge tech marketplace like Israel, New York, Boston nor upcoming Toronto/Waterloo. And, as we saw with Nortel, Blackberry, Nokia – sometimes big players leave havoc behind them and do not feed a growing industry. With each Delrina, Workbrain, Radian6, Bluecat that grows and gets acquired for hundreds of millions of dollars, we create an incredibly talented and motivated infrastructure that gets stronger and stronger. Israeli high-tech companies raised an all-time annual high of $4.8 billion in 2016 with $10 billion in exits without ANY huge companies. The Canadian market is finally seeing a massive growth in investor interest, and fabulous exits like Bluecat – with many more like this, its as good as it gets!!

1 day ago   ·  13
Avatar

John StokesFounders have a common goal for their startups - creating something that matters. Recognition that you have built something that matters sometimes comes through having strong revenues or a large, engaged user base, and sometimes it comes through a sale of your company. And when someone buys your company for $400M there can be no doubt that you have achieved something that matters. This community appreciates that external validation and rightly recognizes it and congratulates founders such as Richard and Michael Hyatt. Those on the other side of this argument fall into two bucket: 1) They have an innate understanding of the value of the business opportunity that has been left on the table by selling it at that time, and also have a good appreciation of the personal circumstances that might influence the sale, or 2) they have a misconception that long term ecosystem success will occur overnight and doesn't require continual recycling of experienced talent, ideas and supportive capital. I doubt that anyone posting on other news sites falls into the first bucket ....

1 day ago   ·  11
Avatar

Stuart MacDonaldSean - Haven't seen you in a while, hope you're well. Good question. As mentioned above, there are sort of macro economic policy issues (e.g. "Canada should have more global champions") and individual/team success metrics (e.g. "you sold your company - nice work!") at play, which don't necessarily jive. It's much easier for a broad readership to wag a finger because they are primarily thinking of the policy stuff - and, frankly, many can't start to grasp the incredibly complex and often very personal concepts involved with deciding to sell - or not sell - a company. Said another way, it's much easier to say "XXX shouldn't sell because there's this policy objective at stake" when you're not the one with 99% of your net worth, and that of investors, tied up in a thing.

1 day ago   ·  1
Avatar

Jeffrey DoucetI believe the sports term for this is "Arm Chair Quarterback"

1 day ago   ·  1
Avatar

Naman KumarIf founders and management team are satisfied with the outcome, no one else (not even investors, let alone policy pundits) can really argue otherwise. What you can do, however, is to make sure the successful ones to stick around so their learnings and money can enable the next generation of builders. Big congrats to the recent sales. The fact that the amounts are in 100s of millions is a mark of the high degree of success, and also a huge bonus for the Canadian community.

1 day ago   ·  2
Avatar

Rob HendersonWhile I see both sides of this argument, to me the most exciting part is that we are seeing 100m+ exits as the new the norm where previously we were celebrating much smaller exits. If this keeps up, more money will enter the system and exits will continue to increase in value...and in my view this is when we will start seeing Canadian based tech giants.

1 day ago   ·  6

1 Reply

Avatar

David OssipWe need to start celebrating these amazing successes. Michael Hyatt Richard Hyatt where and when is the epic party??

1 day ago   ·  6
Avatar

Malcolm LevyI absolutely agree with your comments here Sean. Completely on point.

1 day ago
Avatar

Chris Snoyeryou know at a poker game, when a guy gets lucky on a couple of hands and quickly cashes out with his money? That's not happening in this case. They sold a company for 100m, and stuck it right back into the startup ecosystem. Now, 400m. Keep rolling, brothers...

1 day ago   ·  2
Chris Snoyer

Ian KoGreat idea to reach out through this group Sean! While I could see and understand how some might develop that perspective, I like to believe that we can grow it in a different way from what we've seen down at Silicon Valley / the other major tech hubs (that sort of rode the wave of the DotCom boom, for which Canada wasn't relatively well positioned for at the time). Canada also has a bunch of defining traits that could shape its tech industry in a bunch of ways, like its opportunity to develop more infrastructure / industrial technologies, instead of the service-oriented focus down South. There will be a lot of buyers from emerging countries in the next decade that are just entering the fold. Pragmatically speaking, I've also noticed how many serial entrepreneurs eventually wind up as venture capitalists or startup incubator leaders. I find this proliferation of "trainers" & funders will help to surely and steadily build our industry over time. TLDR: I believe it'll take patience and good industry collaboration to grow a uniquely Canadian tech industry. BlueCat's sale was definitely a step in the right direction - dollars & data aside, it put us on the map, and that's what's important right now.

24 hours ago   ·  1
Ian Ko

John SteticLong time reader, first time commenter. As a Toronto startup founder and someone who's been through two acquisitions by US companies, and now working on a start up in San Francisco, I've become even more acutely aware of the difference between Canada and the US. 1. Silicon Valley has been building the tech startup ecosystem for over 75 years, Canada is maybe 40 to 50 years behind. 2. In the earlier stages, being able to be beside your customers is critical in many cases. We just have fewer customers in Canada and more importantly, fewer big customers who want to take a risk on a start-up. Canadians are more risk averse. 3. The network of who you know makes so much of a difference - if an entrepreneur has the right network, the funding opportunities are that much better. The networks in the US are that much stronger. Trying to compare ourselves to the US is just a fruitless exercise in many cases. So many good points in the comments above: Let's build success at a Canadian scale, let's keep investing the funds, let's work together to build a supportive ecosystem and let's keep growing and innovating. Good things come out of that.

13 hours ago   ·  4
John Stetic

Allen LauFor those who have any negative reaction towards a $100+ million exit, I would suggest them to start a company, build an amazing product, build a team of hundreds of amazing employees and then sell this company for hundreds of millions of dollars before making any comment :-) It is really really hard!!!! Mark Twain once said a man who carries a cat by the tail learns something he can learn in no other way .... However - as I mentioned here many times before - we need to have the ambition to build big, independent tech companies here that would become the next Google, the next Disney, the RBC, the next Allianz, etc. If we don't this, we will be colonized. We don't want that. But aiming high does not mean selling a company for hundreds of millions of dollars is considered as a failure. In fact, it is the exact opposite. Any exit more than $100 million is no small feat and we should celebrate. But we need a handful that will go all the way!

4 hours ago   ·  8
Allen Lau

Peter CarresciaI will reiterate Michael Serbinis point - not every company is meant to be a global standalone giant. Unless you've sat at the boardroom table or mgmt meetings, gone through uncertain sales forecasts, deeply understanding the competitive situation a company is in, and its future prospects, it is ridiculous to criticize a mgmt team and board who decides to sell.

4 hours ago   ·  3
Peter Carrescia

Comment on Facebook

David Crow shared National Angel Capital Organization's event to the group: StartupNorth.

Our friend Boris Mann is doing a super interesting project with Yuri Navarro and National Angel Capital Organization on trying to build a set of Common Docs and terms. He is looking to meet with #Montreal based founders for input and feedback.

www.facebook.com/bmann/posts/10158429487755438
... See MoreSee Less

Montreal Founder Feedback - NACO Common Docs

February 28, 2017, 2:00pm

Maison Notman House

As part of the #NACOCommonDocs project, we are holding consultations in a variety of cities. For Montreal, we're inviting founders -- both experienced and first timers -- to come and give us feedback on the docs we've created. Specifically, what questions do you have about early stage term sheets? If you are doing a founder-led term sheet, what do you pick? What information or education do you feel you're missing? We'll walk through the documents we've created so far, and have an open discussion to gather feedback on what is common and "market" for Canada. For lawyers, investors, and others that are very experienced with early stage term sheets, we have events on Monday afternoon and Tuesday morning. Please leave a comment if you would like to be invited to those consultations. For more information, read the Common Docs background: nacocanada.com/commondocs/

View on Facebook