StartupNorth

Month: September 2010

  • Where are the Canadian super angels?

    Boris Wertz asks where are all the Canadian super angels?

    “So when I check Angellist, the most important directory of angels in North-America and Europe, I only find 3 Canadian angels (of a total of 350 registered on the site), two in Vancouver (Danny Robinson and myself) and one in Edmonton (Kevin Swan).”

    While Angellist is not the comprehensie list of global angel investors, it is the best list of Internet and mobile investors around. It has folks like:

    There are angel groups in Canada. You can see the great work that our friend Bryan Watson at the National Angel Capital Association is doing to educate and advocate for angel investments, they provide a great list of angel groups in Canada. There are the efforts of groups like Maple Leaf Angels and the work of Randall Howard with the Golden Triangel Angelnet. And you can see the work that ad-hoc events like Founders and Funders to connect angels with emerging technologies and early-stage companies and founders.

    However there are less well know angels like:

    The thing that makes Angellist so amazing is the self-service nature of first person connection. You don’t need to know the right people. It provides one click, direct access to the key players in the economy of emerging companies. It’s something that is missing from the Canadian scene. The best part of Angellist is that Nivi and Naval validate and reference check all of the angel investors, so the wannabes are edited out. This is an edited list of the best angels actively doing deals.

    Here’s hoping that more Canadian angels take the time to complete their Angellist profile.

  • How to pitch to corporate VCs

    One way to segment  the world of  VC is into two camps: (1) financial investors and  (2)  corporate investors. My guess is that a lot of the VCs lurking around here are what you would call financial investors; meaning, they take other people’s money, invest it in start-ups and try to make more money.

    But there is the other type of investor, the corporate ones. These investors tend to work for a large corporation and invest the company’s money. Their goals are also to make a lot more money off of their investments but they are also tasked with producing a strange and esoteric thing called a “strategic return”.

    In a nutshell, these investors have to invest to make money, and to make their company smarter by learning from you, the clever start-up.

    For start-ups, having a corporate VC as an investor can have many benefits if the relationship is correctly managed including credibility, access to the corporations sales and engineering teams,  access to go-to-market channels, and opportunities to conduct joint R&D.

    So it is important that start-ups realize that pitching to strategic investors is not like pitching to financial investors. So here are a few ideas to get you started on your corporate VC pitch:

    1. Prepare a pitch: Sounds obvious, right? You’d be amazed at how many start-ups show up without a pitch. I guess  they think they can come in and talk shop for 30 or 45 min and that will be enough to land a deal. It isn’t. Show up prepared and ready to go.
    2. Know the company’s investment thesis: Companies aren’t shy talking about their investments, so there should be a lot written about past deals. Don’t come in with a canned investor pitch, read up on past deals and come in with a pitch tailored to the company’s investment thesis.
    3. Tell them why you’re relevant: Corporate VCs often have to get support from a BU for a deal, so help them position your company with the BU. Figure out which part of the company will be most interested in you and explain that in your pitch.
    4. Better yet, have traction: Come in with a history of working successfully with a BU. Show how investing in you will help you scale/innovate and make the BU relationship even more successful
    5. Don’t come in as a competitor: If you’ve built a competitive product that is better than theirs (or so you think), don’t think you’ll get money from them to keep you off the market. They won’t invest in you. They’ll probably just try to crush you. It is easier.
    6. Come in as a partner: If you and the larger company are in the same space, it doesn’t mean they will necessarily be interested in you. “You do software, we do software” is not a compelling reason for a corporation to invest.  Rather, tell them how your software (product, service) will help better position their software (product, service) in the market.
    7. Finances: Oh yeah, nothing drives corporate investors battier than being treated as  dumb money. You’ll need to come in and talk strategic alignment, but very soon the conversation will turn financial. Remember, these people live and breathe your markets every day,  so they can tell if your market sizes/growth assumptions are for real

    Meeting with corporate investors can be a maddening, time consuming process. They will ask a million question not only about your business, but on how your business relates to their business. So you need to know your business cold and their business cold. But if you come prepared with insight and some existing wins under your belt, this crazy process may have a profitable outcome.

  • Toronto community mourns passing of angel investor

    Paul Maasland from CBC
    Paul Maasland source: CBC & OPP

    Local angel investor Paul Maasland was murdered, his body was found north of Toronto at a public boat launch. We extend our deepest condolences to Mr. Maasland’s family. And our sincerest concerns go out to his friends and colleagues at Maple Leaf Angels and his investments (according to Mr. Maasland’s LinkedIn profile) including:

    The conversations with his investees shed some light on Mr. Maasland as an investor. From one of the portfolio companies CEOs:

    “I’d just say he was very generous with his time and resources and provided great input into how we ran [company removed]. He always was positive and excited about the initiatives were were doing.”

    These comments were repeated throughout Mr. Maasland’s portfolio. He was a knowledgeable, generous investor that provided useful guidance and support for his companies.

    This is an unexpected situation for anyone including many startups. It opens questions for startups about succession planning for Board Directors, questions around the Shareholders Agreement and the shares of a deceased investor. Hopefully most Boards are experienced in succession planning. As the shareholders change over time with new investment, replacing board members is a fairly straightforward and common practice (albeit usually under very different circumstances). Regarding what happens to a deceased investors shares this is decided between the deceased’s estate and the shareholders agreement. If an estate needs or chooses to liquidate the investment, many shareholders agreements have a clause that allows the company or other shareholders to purchase the investment at Fair Market Value. There are tax and legal considerations, so this should not be considered tax or legal advice, please consult a professional.

    It’s unfortunate for our small close knit community to suffer such a sudden, tragic loss. We are deeply saddened to hear about the loss of a member of our community.

  • Year One Labs launches

    Year One LabsIn case you missed it on TechCrunch, Year One Labs launched today.  Year One Labs is a startup incubator/accelerator in Montreal with a great team: 

    This a team that is deeply steeped in the Montreal software/internet/infrastructure startup scene. They have a combination of deep technical chops plus the necessary hands-on operations with early stage companies looking for a scalable business model with customers.

    If this isn’t enough they’ve surrounded themselves with great advisors including Dan “I’m Everywhere Man” Martell, Rails core team member and Shopify founder Tobias Lütke and others.

    The Year One Labs Program

    It’s an interesting program that provides:

    • $50k, issued in tranches based on milestones
    • Four partners who will work alongside you and your team
    • An international network of mentors
    • Direct access to Angel investors and VCs, both 1-on-1 and during our Demo Day events
    • Free rent, Internet, coffee etc. in the Year One Labs space

    In exchange for “a minority stake in your startup, typically between 10-20% under standard Series Seed terms”.

  • DemoCamp with Fred Wilson

    Mark your calendars.

    Fred Wilson of Union Square Ventures will be keynoting DemoCamp Toronto # 27 on October 6, 2010.

    EquentiaHow did we pull this off? Well the big shout out goes to William Mougayar at Eqentia, this would not have happened without the support and efforts of William. In case you haven’t seen Eqentia, they power custom portals for media monitoring, competitive intelligence, knowledge tracking and more. They power two sites that I use daily to track the Canadian emerging technology scene: CVCA and NextMontreal news widget.  We’ll be launching a full Eqentia powered news portal in the next couple of weeks.

    The full details about DCT27 are still being locked down. The venue is still to be determined. The venue is the bulk of the ticket price. The goal with ticketing has always been cost recovery and we’ll aim to keep tickets inexpensive (current model show about $25/person less for students). Fred Wilson, Union Square Ventures

    DemoCamp Toronto 27 Details

    • Date: October 6, 2010 [Hold the Date – iCal]
    • Time: 11:30am – 3:30pm
    • Location: To be determined
    • Notify me when tickets are available

    I want to demo! Pick me, pick me!

    We’re also looking for up to 5 local demos that match the investment thesis at Union Square Ventures. If you think your company has the right stuff then you should apply to demo.


  • Startup Weekend Toronto September 24-26

    This is a guest post by Startup Weekend Toronto organizer Chris Eben.

    Let’s build some more startups in Toronto! According to StartupIndex, the GTA has 325 startups – by September 26, we might be able create 10 new startups in Toronto.

    Startup Weekend, a 54 hour event in which teams go from idea to launch to pitch in a weekend, comes to Toronto September 24-26 at Ryerson University through StartMeUp Ryerson. Check it out here and get registered while tickets are still available.

    The only way to determine whether entrepreneurship is for you is by actually going for it, and Startup Weekend gives you that opportunity. Going from idea to pitch requires working on every facet of entrepreneurship – researching a market, articulating the unique value proposition, competitive advantages, user acquisition strategy, business model, building the prototype, and more. You will work on and learn all the critical things you should be thinking about when starting a company and get practical experience.

    After the weekend, you can continue working on your project making it your path to entrepreneurship, or you can take what you learned during the weekend and apply it to your next venture. Over 36% of Startup Weekend companies are still alive after 3 months, and over 10% of companies go on to produce revenue or get seed funding.

    Startup Weekend is a great way to network with other passionate entrepreneurs and find potential co-founders. During Startup Weekend, you will not only meet some talented individuals, you will get to see how they work, helping you evaluate the potential for long term fit. Interaction and exchange of ideas between different teams is common which means your networking opportunities are not limited to your immediate team.

    Every Startup Weekend participant walks away learning a lot about startups and making some valuable connections. There is a great line up of speakers:

    • Mike McDerment, CEO of FreshBooks
    • Mark Ruddock, former CEO of Viigo (bought by RIM)
    • James Lanthier, COO of Mood Media
    • Sarah Prevette, CEO of Sprouter
    • Tim Smith, CEO of GridCentric
    • April Dunford founder of Rocket Launch Marketing
    • Leila Boujnane, founder and CEO of Idee Inc.

    They, along with a growing list of other experienced folks from the local community will be involved as mentors and judges to help teams during their weekend journey and provide constructive feedback. Attendees will take away valuable lessons to be applied to their current projects and anything they do in the future.

    While Startup Weekend is a non-profit organization, there is a cost to the event to cover expenses.  StartupNorth readers may use discount code “StartupNorthSWTO” for a significant discount.

    Follow @startupwkndTO and #swtoronto for news and updates leading up to the event.