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CIX – Our chance to create something great?

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Jonas Brandon

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I think a lot of people considered CIX, held in Toronto last week, to be a simple extension of the defunct Canadian Venture Forum. The Canadian Venture Forum, which was dealt a fatal blow last year with the death of the Toronto Venture Group, did look very similar in a lot of ways. A slew of companies were all hawking their wares and pitching for financing from Canada’s Venture Capitalists, and while there were at least 20 startups there vying for attention, actual VCs seemed to be hard to come by regularly.

The CIX is not perfect. The concept of pitching a room full of VCs for money has some serious flaws, not the least of which is the fact that the majority of the VCs who attended CIX in the morning did not stick around to see the pitches in the afternoon. Add on top of that the likelihood of this conference giving birth to a successful deal directly from the pitches, and you are in for a lot of disappointed attendees.

It is my hope that CIX will look a lot different next year. Normally that would be too much to ask, but in the last few months I have gotten to know Robert Montgomery, the invisible hand behind the CIX conference, and he gives me hope.

In order to remain relevant, the CIX organizers need to now connect with the community and find out what was relevant, and what wasn’t. The two communities that the CIX touches, Startup Entreprenurs and Angels/VCs, will have different needs, and the trick will be to address both.

I do not believe that what the two groups need is either pitch sessions with 10 back-to-back pitches, nor does either community want a series of panels that offer little real value. What we need are connections, rapidfire demos and a venue for the best and most aggressive Startups AND VCs to stand out.

The way I see it, Robert and his staff have a lot of work ahead of them, but they aren’t the only ones. If Robert will step up and listen, we have to be ready to pitch in and do our part.

In the next few days I will post a few of my experiences at CIX. Some were very positive and some were a lot less encouraging.

What would you change? Is this a hopeless beauty contest? Should we boycott CIX next year, or should we embrace it?

Comments

10 responses to “CIX – Our chance to create something great?”

  1. Aaron Vegh Avatar
    Aaron Vegh

    Perhaps a change in format is the answer. I’m a newcomer to this community, but here’s a format that might make sense: a trade show for VCs. So instead of a formal lineup of startups making pitches, one after the other, you’ve got a floor of booths that VCs can tour, and the startups can make their pitches as interested parties show up.

    Another alternative: streaming the pitches, so that VCs can self-select which ones to pay attention to. Perhaps a program could be prepared in advance, showing some summary info about each startup: they’ll be making their pitch in room A at 1, 3, and 5pm. Again, interested VCs show up to hear the pitch, and there’s likely a smaller crowd, so there’s a better chance for one-to-one questioning.

    Reply
  2. Aaron Vegh Avatar
    Aaron Vegh

    Perhaps a change in format is the answer. I’m a newcomer to this community, but here’s a format that might make sense: a trade show for VCs. So instead of a formal lineup of startups making pitches, one after the other, you’ve got a floor of booths that VCs can tour, and the startups can make their pitches as interested parties show up.

    Another alternative: streaming the pitches, so that VCs can self-select which ones to pay attention to. Perhaps a program could be prepared in advance, showing some summary info about each startup: they’ll be making their pitch in room A at 1, 3, and 5pm. Again, interested VCs show up to hear the pitch, and there’s likely a smaller crowd, so there’s a better chance for one-to-one questioning.

    Reply
  3. vanguyafo Avatar
    vanguyafo

    I agree with Aaron. I think his suggestion about having a floor of booth like a tradeshow format is a good one. It is less stressful for the biz owners and more cordial for VCs to browse around and find out which companies they wish to talk to more. They can then arrange privately where and when to meet up and discuss more.

    The concept of beauty pageant style pitching is outdated and ineffective.

    Reply
  4. vanguyafo Avatar
    vanguyafo

    I agree with Aaron. I think his suggestion about having a floor of booth like a tradeshow format is a good one. It is less stressful for the biz owners and more cordial for VCs to browse around and find out which companies they wish to talk to more. They can then arrange privately where and when to meet up and discuss more.

    The concept of beauty pageant style pitching is outdated and ineffective.

    Reply
  5. Alternative Avatar
    Alternative

    Is the problem the format of the lack of investment represented/deployed? If we would have had dollars committed, would this discussion be as relevant?

    I encourage the community to focus on making it easier for angels to invest. This means changing the tax treatment and pushing the government to stop giving tax credits to labour sponsored funds, and other provincial/federal programs that put money in the hands of the “VC/Managed Money” community. Angels are our backbone (or could be) and we need to champion changes in the tax policies and funding policies that allow angels to investment as competitively as those tax benefited funds.

    Reply
  6. Alternative Avatar
    Alternative

    Is the problem the format of the lack of investment represented/deployed? If we would have had dollars committed, would this discussion be as relevant?

    I encourage the community to focus on making it easier for angels to invest. This means changing the tax treatment and pushing the government to stop giving tax credits to labour sponsored funds, and other provincial/federal programs that put money in the hands of the “VC/Managed Money” community. Angels are our backbone (or could be) and we need to champion changes in the tax policies and funding policies that allow angels to investment as competitively as those tax benefited funds.

    Reply
  7. James Smith Avatar
    James Smith

    Hey Jevon, as a veteran of the venture fair scene, I am perhaps less exacting in my standards of these events, in terms of generating actual deal flow. In particular, I thought the VC introduction panels would be useful to a startup, although one could arguue that they merely put a face and contact to content that an entrepreneur could otherwise access on the firms’ websites.

    If I had two suggestions if the idea is to generate more actual dealflow from the event, they would be as follows:

    The first is an understanding that startups should probably treat the event like they would any other trade show experience, ie. the pre-event scheduling, communications and contacts that you make with your audience (in this setting, the VCs are your target customers and partners) are likely far more important than any contact you might make at the actual event. The show ‘spend’ for presenting startups should fit into some overarching sales strategy for engaging the angel or investment community – ie. it should be used (like DEMOFall or similar shows from a product perspective) as a forum to emphasizing and building momentum for your company. The ideal situation would be for startups to know next year’s VC audience by late ’08 next year, make first introductions themselves to the audience in early ’09 and define the milestones that will define the company’s success, work a bit of traffic and interest among the VC audience in early ’09 before the event, and try to make a splash by reporting progress and achievements at the show itself to generate churn and interest. CiX could possibly help with this by facilitating startups’ earlier engagement of the VC sales cycle by defining and publicizing its VC participants earlier on in this process – alternatively, it could generate e-mail updates (I wouldn’t rely on blogs for these folks, alas Jevon) regarding key milestones of presenting companies as early as late ’08. In this sense, CiX would become more of a process rather than an event, and well worth the value of the ‘spend’.

    The second and related suggestion relates to the significant role that non-founder advisors play in de-risking opportunities for startups. If such an advisor has started a company that an institutional investor has invested or otherwise has profile in the startup’s area of competency, that advisor’s role (even if fairly limited from an operational perspective) will greatly assist in accelerating the VC sales cycle. My experience is these folks can be found, and they can be had for option grants from between 0.5% and 1.5% of the equity of the company rather than cash consulting fees. Again, the CiX folks can assist with this, by actively cultivating mentor relationships for the companies that will be presenting. This might happen behind the scenes already, and if so then it may just be more effective if the process starts a little earlier in the calendar year.

    One last pitch (and I’m not a CiX sponsor) is that the CiX folks seem to have a sincere commitment to bring an increasing critical mass of VCs to the event each and every year, especially investors from new juridictions (US, Europe, Israel) that might be available to partner with one another for syndicate-building opporunties in Canada. The extra attention to our technology community is great, and I’m hopeful that the community continues to see value in and improve the event’s role in generating actual dealflow in the future, so as to justify the spend for attending/presenting.

    Reply
  8. James Smith Avatar
    James Smith

    Hey Jevon, as a veteran of the venture fair scene, I am perhaps less exacting in my standards of these events, in terms of generating actual deal flow. In particular, I thought the VC introduction panels would be useful to a startup, although one could arguue that they merely put a face and contact to content that an entrepreneur could otherwise access on the firms’ websites.

    If I had two suggestions if the idea is to generate more actual dealflow from the event, they would be as follows:

    The first is an understanding that startups should probably treat the event like they would any other trade show experience, ie. the pre-event scheduling, communications and contacts that you make with your audience (in this setting, the VCs are your target customers and partners) are likely far more important than any contact you might make at the actual event. The show ‘spend’ for presenting startups should fit into some overarching sales strategy for engaging the angel or investment community – ie. it should be used (like DEMOFall or similar shows from a product perspective) as a forum to emphasizing and building momentum for your company. The ideal situation would be for startups to know next year’s VC audience by late ’08 next year, make first introductions themselves to the audience in early ’09 and define the milestones that will define the company’s success, work a bit of traffic and interest among the VC audience in early ’09 before the event, and try to make a splash by reporting progress and achievements at the show itself to generate churn and interest. CiX could possibly help with this by facilitating startups’ earlier engagement of the VC sales cycle by defining and publicizing its VC participants earlier on in this process – alternatively, it could generate e-mail updates (I wouldn’t rely on blogs for these folks, alas Jevon) regarding key milestones of presenting companies as early as late ’08. In this sense, CiX would become more of a process rather than an event, and well worth the value of the ‘spend’.

    The second and related suggestion relates to the significant role that non-founder advisors play in de-risking opportunities for startups. If such an advisor has started a company that an institutional investor has invested or otherwise has profile in the startup’s area of competency, that advisor’s role (even if fairly limited from an operational perspective) will greatly assist in accelerating the VC sales cycle. My experience is these folks can be found, and they can be had for option grants from between 0.5% and 1.5% of the equity of the company rather than cash consulting fees. Again, the CiX folks can assist with this, by actively cultivating mentor relationships for the companies that will be presenting. This might happen behind the scenes already, and if so then it may just be more effective if the process starts a little earlier in the calendar year.

    One last pitch (and I’m not a CiX sponsor) is that the CiX folks seem to have a sincere commitment to bring an increasing critical mass of VCs to the event each and every year, especially investors from new juridictions (US, Europe, Israel) that might be available to partner with one another for syndicate-building opporunties in Canada. The extra attention to our technology community is great, and I’m hopeful that the community continues to see value in and improve the event’s role in generating actual dealflow in the future, so as to justify the spend for attending/presenting.

    Reply
  9. Canadian Startup and Tech News Speed Linking

    […] I got an email from Robert about this earlier this week.  Social networking in the enterprise, yes this has potential.  If you can combine it with really god collaboration tools, then IGLOO could really shine.  While there are free, open-source ways to do this stuff, IT likes software that you get support with. Fresh off of the recent Vancouver NetSquared event (also known as NetTuesday), I just got swamped with work and thus was pretty much unable to write a recap. However, since I have a meeting shortly and I can’t really focus much on work, I figured I might as well write a couple of comments on the meeting. Vancouver NetTuesday for May 2008 recap « Random Thoughts of a Student of the Environment I have been talking with the guys at 37signals and we have decided to open up the Lypp + Highrise Mashup contest to include all of the 37signals APIs. This means that developers can integrate Lypp with Campfire, Basecamp, Backpack, Writeboards et al! 37signals & Lypp VoIP Mashup Expanded « A blog about Telephony and Business Communications | Lypp VoIP API | Lypp.com The CIX is not perfect. The concept of pitching a room full of VCs for money has some serious flaws, not the least of which is the fact that the majority of the VCs who attended CIX in the morning did not stick around to see the pitches in the afternoon. Add on top of that the likelihood of this conference giving birth to a successful deal directly from the pitches, and you are in for a lot of disappointed attendees. It is my hope that CIX will look a lot different next year. Normally that would be too much to ask, but in the last few months I have gotten to know Robert Montgomery, the invisible hand behind the CIX conference, and he gives me hope. StartupNorth » Blog Archive » CIX – Our chance to create something great? […]

    Reply
  10. Canadian Startup and Tech News Speed Linking

    […] I got an email from Robert about this earlier this week.  Social networking in the enterprise, yes this has potential.  If you can combine it with really god collaboration tools, then IGLOO could really shine.  While there are free, open-source ways to do this stuff, IT likes software that you get support with. Fresh off of the recent Vancouver NetSquared event (also known as NetTuesday), I just got swamped with work and thus was pretty much unable to write a recap. However, since I have a meeting shortly and I can?t really focus much on work, I figured I might as well write a couple of comments on the meeting. Vancouver NetTuesday for May 2008 recap « Random Thoughts of a Student of the Environment I have been talking with the guys at 37signals and we have decided to open up the Lypp + Highrise Mashup contest to include all of the 37signals APIs. This means that developers can integrate Lypp with Campfire, Basecamp, Backpack, Writeboards et al! 37signals & Lypp VoIP Mashup Expanded « A blog about Telephony and Business Communications | Lypp VoIP API | Lypp.com The CIX is not perfect. The concept of pitching a room full of VCs for money has some serious flaws, not the least of which is the fact that the majority of the VCs who attended CIX in the morning did not stick around to see the pitches in the afternoon. Add on top of that the likelihood of this conference giving birth to a successful deal directly from the pitches, and you are in for a lot of disappointed attendees. It is my hope that CIX will look a lot different next year. Normally that would be too much to ask, but in the last few months I have gotten to know Robert Montgomery, the invisible hand behind the CIX conference, and he gives me hope. StartupNorth » Blog Archive » CIX – Our chance to create something great? […]

    Reply

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