Year: 2008

StandoutJobs raises $2m from iNovia Capital

The news is finally public that StandoutJobs, a Montreal, Quebec company who we mentioned in our earlier post about DEMO08, has raised $2million from iNovia Capital.

With this announcement and their launch at DEMO, StandoutJobs is taking back the veil on their business model. When we first saw them almost a year ago, StandoutJobs looked like a recruiting company that did videos, and we didn’t find it very compelling. I got to hear more a few months ago however over supper with Ben Yoskovitz, and it started to make a lot more sense. StandoutJobs will be providing a SaaS solution to companies that essentially lets them build a complete hiring page that is much more rich and user-focused than the normal “email [email protected]”. The pages are fully customizable and seem to be focused on helping the company display much more current and directly useful information to the potential hires. For a more detailed overview, check out this post on Mashable.

iNovia Capital bills itself as a “seed and early-stage venture capital fund” with offices in Alberta (Edmonton and Calgary) as well as Montreal. They seem to be increasingly active with their investments and I am impressed that they took the entire $2million round to themselves, which likely speaks to the solid team that StandoutJobs has in place as well as iNovia’s willingness to get out there and shoulder some risk.

In case you think you are being hit with a case of Deja Vu, you are right: StandoutJobs did previously announce that they had raised funding from Garage Ventures Canada, but this seems to have fallen apart. On the StandoutJobs blog:

“As well, it?s time to announce a bit of news with respect to our financing. Although we announced some time ago that we raised money with Garage Technology Ventures Canada, that did not in fact come to pass. As we got deeper into the process with Garage, it was clear that it was not the best fit for us. We wish Garage the best of luck.”

It seems that whatever came to pass with Garage did not take away from the credibility of StandoutJobs or the team there, as iNovia seems to have quickly seen the opportunity.

Congratulations to everyone at iNovia and StandoutJobs.

January 28, 2008
Canadian Companies at DEMO08
There are 5+1 Canadian companies on the slate at DEMO08 today and for the next 2 days.
- Standout Jobs, Inc., Montreal, QC
- Cozimo (some of the team is in Montreal, QC)
- HealthPricer Interactive, Ltd., Vancouver, BC
- Rove Mobile, Inc., Ottawa, ON
- SceneCaster, Richmond Hill, ON
- xtranormal, Inc., Montreal, QC
DEMO is a sort of launch pad for companies who want to make a big splash with a launch or an announcement. It boils down to 2 days of pitches.

Up front, DEMO has never made a lot of sense to me. You pay ~$18,000 just to get up on stage, and spend at least another $10,000 getting yourself ready. So, $20,000 to get up and pitch to a room full of people there to see a few dozen other presentations as well, all from difference industries and disciplines. The place probably isn’t crawling with customers, and my guess is that most of the presenting companies are funded already to some degree.

That said, have spoken to a few people who have presented, or will be presenting this week, it is more obvious what DEMO is selling.

Polish – To demo at DEMO, you have to have a polished and perfected pitch. You have 6 minutes to make a huge auditorium more excited about YOUR launch than all the others who will take the same stage.

Exposure – Everything at DEMO is recorded and available on the web. I can personally admit to watching almost ALL the DEMO pitches every year. Some of them are just incredibly terrible while others inspire and impress.

A Deadline – Once you launch at DEMO, you are going to get enough exposure that you have to have something for the public that is worth talking about. It is better to release early, and DEMO seems to drive a lot of startups to do that.

Good luck to all the Canadian startups. I will post links to their presentations here when they are online.
January 28, 2008
It's a wrap – Founders and Funders Toronto

The inaugural Founders & Funders went off without a hitch. It was a fantastic evening. It wouldn’t have been possible without our sponsors, thank you very much Microsoft and JLA Ventures, the event wouldn’t have happened without their support.

Jess and Chris from Istoica snapped a fantastic pictures of the event and the attendees. The gallery from Founders & Funders event is available. Maybe we should do a set of hockey cards of Founders & Funders. On the back of each card it could have stats like amount raised, fund size, number of deals, etc. Until then, check out the pictures from Istoica.

The goal of Founders & Funders is to create a social environment where the people who fund companies and the people who start companies can begin conversations outside of the pitch. As an attendee, I’ll extend an invitation to connect you with any other attendee you might have missed.

Thank you for making the inaugural Toronto Founders & Funders a success. We look forward to hosting another event later in 2008.

Cheers,
David & Jevon

January 25, 2008
Game On Finance – Browser going to wallop Super Mario

Last week we got our finance on at Game On, a top notch event by Interactive Ontario that brought together thought leaders from the games business. Right from the start it was apparent the games industry is incredibly diverse.

Over half the attendees were in the console game business, by and large a mature industry. More than a few people didn?t appreciate their industry being called mature? but what else can you call it when $15 million is required to create a new console title and there is virtually no way to get a project financed without the backing of an established publisher like Ubisoft or EA. “The large investments required rule out venture capital interest” noted Randy Thompson of Argon Venture Partners, so financing a title more closely resembles feature film (without the promise of Hollywood glamour). Eric Zimmerman, Co-Founder of Gamelab, made a particularly incisive point by posing the question ?do ever more realistic lumbering 3d giants really drive greater entertainment value??

Also in attendance were developers of mobile games. The mobile games business is currently controlled by carriers who use their decks (the preset homepage and application managers) to strong arm developers, control billing, limit distribution, and take a hefty cut. The challenges of mobile game developers are many, perhaps the most significant being porting (ensuring a game will work on the 1,500+ mobile phones on the market). Phil Giroux of Magmic Games, one of the most successful mobile game companies out there, noted Magmic spends significantly more time porting than creating new titles. There are definitely some opportunities in the mobile space for startups, but my guess is that they involve less game development and more figuring out how to ensure games work across devices. How many of you have tried entering the mobile application space? Have any of you succeeded?

By far the most exciting space at least as far as startups are concerned is internet gaming. The flash enabled browser represents a distribution channel larger than xbox, playstation, and wii combined. There are of course challenges, internet users have grown accustomed to free. John Walsh, CEO of Groove Media, really blew the crowd away with their plan to monetize free games with in-game advertising and upgrades. Others must also be impressed, the Toronto based Groove Media has already raised $30 million, talk about taking it to the next level!

We met a great group of Canadian entrepreneurs at Game On Finance. Vikas Gupta of Transgaming Technologies, John Walsh of Groove Media, and Nathan Gunn of BitCasters. We?ll be following up with profiles of each over the next few weeks, cause one thing is for sure, Canadian entrepreneurs will be behind the next revolution in gaming.

January 25, 2008
smartpatterns.com – Create your own Knitting Pattern

I wasn’t exactly sure what to think when I first took a look at smartpatterns.com, a Waterloo, On startup that has 2 employees and has been in development since 2003. Smartpatterns is a windows application, not a web application, that lets you create knitting patterns using a drag-and-drop interface.

Once you have created an image of the sweater you want, and have added the proper measurements as well, the software will produce a standard knitting pattern that will let even an amateur create a complex piece, such as a sweater.

Etsy.com is a great example of how a company can build and leverage an Arts and Crafts community in order to build a healthy market. I think SmartPatterns, with their knitting-specific tools, has a huge opportunity to create a market for custom-made knitted items. This might sound crazy to some, but there might be a market for it: On-Demand custom knitted sweaters, scarfs, afghans and more.

One thing I loved about Indochino was their on-demand access to production labour that allows them to create tailored suits on demand. In that case, Indochino outsources to specific tailors in China.

I don’t know a lot of knitters, but the ones I do know all love to create things for their friends and family. I can imagine that they might enjoy getting paid to knit just as much. A sort of return to a more primitive economy, but with all the efficiencies and possibilities of a piece of custom-design software like SmartPatterns.

The opportunity for SmartPatterns is to provide their software so people can design the perfect item and then SmartPatterns provides the knitting pattern to the knitter, who will produce the item and then ship it to the buyer directly.

Is there are market for custom-made knitted goods? I am not sure, but I am convinced that it is far more scalable and profitable to become a platform for a market than it is to simply be selling software to a small community of users. That said, SmartPatterns seems to have a solid tool that produces solid results for their users. That can’t be underestimated.

Since their launch in December, SmartPatterns has brought in over 1000 paying customers and they have sold their first pattern to a yarn manufacturer (which I understand gets included in the yarn as a perk). That shows me that there is a huge need for their core product and that their opportunities to generate more profit, such as the way I suggest, could be something they experiment with as they grow their core market.

SmartPatterns is Angel funded, but is currently seeking a new round of funding.

January 23, 2008
See you tomorrow night – StartupCamp Montreal
Wow, we are just coming off a great night last night at Founders and Funders and tomorrow we are hopping on the train and making our way to Montreal for StartupCamp Montreal.

The final lineup for the pitches are
1. Cozimo
2. Tungle
3. Streametrics
4. iGotcha Media
5. YourTeleDoctor
I am still trying to get over how much interest there has been in Montreal for StartupCamp. Kudos to Philippe for putting things together so quickly and so well. I will cover the night live on the StartupNorth Twitter page. Tune in!

Now, lets see how well the iPartee widget works:
January 22, 2008
Canada Needs to Realize The Technology Business is a Race

Canada’s pace in the technology industry is too slow. Commercializing innovation and business are a tough race. Only the swift and the lucky survive. I’m starting to believe the heart of the problem lies in our attitude. We plod along and make excuses as others pass us.

When you meet technology people from Silicon Valley, you’ll notice that they are in a race. They’re in a race to get to work, to get food and get back to work, and to do whatever they need to do to be productive as much as possible. They’re in a race to raise more money than their competitors, grab talent from anywhere they can, sign deals and build big companies. They’re in a race to thrive.

When you meet technology people from Africa, you’ll notice that they are in a different kind of race. They’re in a race to adopt mobile technology, to communicate easily where in recent memory it was quite difficult. They’re in a race to stop infectious disease, ease the burden of massive migrations of refugees, and stop the famine and drought that threaten so many. They’re in a race to survive.

When you meet technology people from Canada, we’re not in a race. We’re watching the race from the sideline. We act like technology entrepreneurship is closer to farming than shark hunting, as if risky business isn’t necessary to make the next Google or Microsoft. We putter around as if slow and steady actually wins races to innovate and grow technology businesses. We fail to light a fire under young entrepreneurs, like the ones that started every major tech company you can think of, and our best venture capitalists are putting their ships on “coast”. In a world of accelerating change, those are very dangerous habits. We need to lose our current attitude quickly.

If you have any illusions that our major media and technology conglomerates are going to take care of this job for us, please give up your fantasy now. Dinosaurs don’t know how to innovate. Our mobile data rates are worse than third world countries and they’re spending money to slow down your internet connection. That isn’t innovation, that’s strangling the golden goose before it can lay eggs. Startups are starving while they get fat on high prices for mediocre services.

My friends in the Canadian tech community are doing a lot to try and help technology startups. David Crow, Boris Mann, and Jevon MacDonald are all collaborating with multiple parties to improve the situation. I wholeheartedly support them in their efforts. But I think we have an entrenched culture of mediocrity that needs to be surgically removed.

The biggest change has to be in our attitude. We need to become bold, we need to embrace risk, we need to aim for the stars. We need to take big chances, learn the lessons from failures, and have some great successes. The only thing holding us back is the size of our own dreams, and our determination to see them fulfilled.

Will Pate is a street smart web geek, Community Evangelist at ConceptShare and co-host of commandN. This is his first post on StartupNorth.

January 21, 2008
Founders and Funders Toronto Kick Off Questions
The Founders and Funders dinner takes place tonight in Toronto. We really wish we could have invited everyone who asked for a ticket, but we have been sold out for a while now.

I really don’t want to miss out on hearing from all of you, even if you can’t make it to Toronto for the dinner tonight, so I thought I would post the questions we will post tonight at the dinner. Please comment below with your thoughts on the state of funding in Canada. Answering these questions isn’t a requirement at the dinner, but we wanted to set the tone of the discussion to focus as much as possible about what we can do to change things in Canada.
- Do Angel Investors and Venture Capitalists get enough recognition for the deals they do in Canada?
- Do Canadian universities inspire and support entrepreneurship? Could a “Startup Co-Op” program help?
- What is the minimum amount of funding a startup should be able to deliver a product with?
- Is the Dragon’s Den the most visible face of Canadian Entrepreneurship right now? What is wrong with that?
Some of these questions may change by tonight depending on the answers we get. As you can see, the Dragon’s Den question tends to invite some good responses!
January 21, 2008
BrightSpark: Venture Capital is not what it used to be, we are changing

A lot of us like to speculate on the state of Venture Capital in Canada; we all have a vested interest in the existence of a healthy and competitive market. For BrightSpark, the truth has been much more obvious.

BrightSpark, with over $100 million under management, raised its first fund in 1999 and its second fund in 2004. Co-Founded by Tony Davis and Mark Skapinker, the fund positioned itself as a “seed and early-stage software venture fund” for the Canadian market with offices in Montreal and Toronto. They have been active even recently with great deals like NowPublic, b5Media and MobiVox, 9 recent investments, and a few more to make in their second fund.

The BrightSpark team, a bunch of experienced entrepreneurs, was (and is) perfectly suited for the job we have been asking VCs to take on here in Canada: early stage financing with heavy duty support capabilities. It should have been a perfect combination, and one would hope that they could have done quite well in the last few years with the resurgent tech bubble.

I wanted to know what was next for BrightSpark, as I had heard a lot of divergent rumors recently: some said BrightSpark was raising a new fund, others said they were going to close up shop. Earlier this week I had a chance to speak with Mark Skapinker about Brightspark, the Canadian Venture Capital market, and what he might do to fix it all if he could.

Mark came right out and said that the Canadian Venture Capital market is changing and that BrightSpark has been watching this change closely for some time. He believes that a lot of funds are going to face some troubled waters ahead and that BrightSpark is one of the few well positioned funds to survive in this new environment. It was clear from our conversation that BrightSpark believes Venture Capital in Canada absolutely has to change, and soon.

Mark and the team at BrightSpark feel that there, quite simply, just isn?t enough early stage deal flow right now to sustain large funds. They also have the sense that there just aren?t enough repeat entrepreneurs in Canada right now who have the experience to create great startups.

I asked Mark what he would do to improve the financing environment in Canada which led us to a discussion about BrightSpark 3.0, Inc.

BrightSpark 3.0 is a company (not a fund) that will exist to Create, Build and Operate internet businesses. The company will be focused on creating new Internet and cash generative Web-2.0 style startups and is fundraising now.

So what does this mean? For the time being, BrightSpark will focus on supporting the growth of companies already in the portfolio. Over the next year, BrightSpark will make a decision about raising a third fund, which would be in the $50 – $75 million range.

From our vantage point this story is both a bit sad and a bit hopeful. Some of the the top entrepreneurs in the country went out in 1999 and raised a Venture Capital fund so they could change the industry; here we are, almost 10 years later with a market still in dire need of change. The BrightSpark team now has a chance to go back to their roots and build their own startups; hopefully we will see funds stepping up to fill the funding gap left behind.

If we needed a reason to get the discussion about how Venture Capital needs to change in Canada kick-started, this is it. We have a top fund feeling the model is so broken, that they need to fundamentally change the way they operate. What does this mean for other VCs in Canada? What does it mean for the budding and growing startup community?

January 16, 2008
AnnesDiary.com – Anne of Green Gables gets Fingerprinted

AnnesDiary.com, run by Toronto based LogicaHoldings, is taking a Webkinz style approach to the children’s online entertainment market. Their twist? A fingerprint scanner!

To sign up a child for Anne’s Diary a parent must fill out an application and provide contact information for a sponsor who can attest to the child’s gender (female) and age (6-14). A sponsor must meet several requirements, the most curious being that he or she must be a recognized professional from a list of 46 including: Funeral Director, Christian Science Practitioner, and Member of Parliament.

2-3 weeks later two packages will arrive: a welcome kit (which includes a fingerprint scanner and a copy of the book Anne of Green Gables) at the parents home and a password card at the sponsors home. The sponsor then must call the parents to reveal the password. And that is just the sponsorship piece.

You’ll also have to install the fingerprint scanner and scan a few of your child’s fingerprints (in case the child looses or injures one finger)! All this adds up to a few things not the least of which is a barrier to adoption.

A subscription to Anne’s Diary costs $119.99 a year. For comparisons sake, Club Penguin costs $60 a year and Webkinz $15. The games on Club Penguin are actually pretty fun and you get to play with other penguins! With Webkinz, you get a physical stuffed animal even before you register!

With Anne’s Diary, you get an online journal (more fun than MS Word) and every Christmas a print out of all the journal entries (sweater alert). There are some more features: a few solo games, a birthday calendar, an amazon affiliate site, and a basic instant messenger.

So what does being “the first biometrically-secured social networking site for children in the world” mean in terms of security? We’re not exactly sure… The issue is content not authentication. What’s to stop Uncle Lester from using a logged in but unattended computer?

Monitoring the chat, blocking certain words, and regularly booting bullies should be enough, which is by the way what they do on Club Penguin (now a Walt Disney Company). Anne’s Diary claims to block out dirty words, but using their demo account I was able to draft my own version of The Aristocrats.

Club Penguin and others have proven that there is a huge market in this demographic and that parents absolutely will pay for security and a solid product. The Anne of Green Gables brand license is certainly valuable, time will tell if Logica Holdings is in this for the long haul. Losing the sponsor process and fingerprint scanner would be a good start.

“Marilla, isn’t it nice to think that tomorrow is a new day with no mistakes in it yet?” – Anne Shirley

January 16, 2008