StartupNorth

Category: Canada

  • The best laid 15 year plans

    Southern Alberta Railroad Tracks
    Photo by ecstaticist

    OMERS and ABP announced the launch of INKEF Capital, a € 200 million venture fund that is focused on deploying € 100 million in Canada in 5 years.

    “In the first five years, € 100 million is anticipated to be invested in start-ups in each of the territories, the Netherlands and Canada. The initial portfolio will naturally be weighted towards early stage companies which will mature over the fifteen year term. Deal flow will come from various sources, including technology transfer offices of universities, informal investors, regional funds and from spin-offs of new technologies by existing companies.” 

    This is great. It’s nice to see new capital getting ready to be deployed to Canadian entrepreneurs. What’s interesting is the reason that INKEF believes it is differentiated than other capital:

    “INKEF Capital distinguishes itself from other investors by its long term investment horizon and active mentoring of the start-ups.”

    Makes me wonder what the other firms have been doing? Passive mentoring? It will be interesting to gather more details as content becomes available (Currently http://inkefcapital.com/ is not active and the WHOIS record returns a registrar and intellectual property firm in the Netherlands). This looks it is a direct investment vehicle for OMERS & ABP,  “programs for direct investment as a promising new strategic option”.  I can’t wait to hear Mark McQueen’s take on this, but given we’re in Day 9 of his hunger strike I suspect that you’re stuck with my limited insight.

  • Russia learning from Silicon Valley

    While everyone in Quebec and Ontario were doing the shake-rattle-and-roll, the Silicon Valley establishment was playing host to Russia’s  President Medvedev.

    Apparently having your economy rely solely on exporting oil and mafia dons isn’yt considered sound economic policy so Medvedev got his buddy Ivan Danko to show him around the at likes of Twitter and Cisco.

    In case you’ve been living in Siberia and haven’t heard, Russia wants to build its own Silicon Valley from scratch in a town outside of Moscow. So we guess Medvedev was asking around for the “how to” manual.

    This reminded us of a brief discussion we had over at the C100 website a few weeks back. You can check out the comments over there, but we’ve also reposted here to continue to spur a bit of debate…

    Does Canada need its own Silicon Valley?

    Tuesday, June 1, 2010 at 03:37AM

    OK, I’m going to pull the pin and lob a rhetorical grenade to get a discussion going…

    Have you head of Skolkovo, Russia? No? Apparently it is somewhere near Moscow and is the future home of Russia’s Silicon Valley. What? You don’t believe it? Well some US investors sure do, to the tune of $250 million. And this isn’t the only government backed innovation center that is being built from the ground up. There may be a Silicon Valley being built up in Russia but the Dubai has its sites firmly set to be the 21stSilicon Oasis. Century’s

    Both these locations have or are attracting talented engineers. Both of these locations have or are attracting massive amounts of capital.

    And they aren’t the only two countries that are trying to build their own flavor of Silicon Valley. There are probably a dozen similar projects in a dozen countries around the world. But one country that isn’t embarking on its own Silicon Valley master plan is Canada.

    If a US PE can come up with  250 million reasons why Russia will successfully build the next hub of innovation, surely Canada, with its improving investment climate and its refreshing lack of mafia domination could convince investors to put some green in the Great White North.

    Is Canada missing the boat? Does it need to create a chilly Silicon Valley somewhere near Alert in order to compete in the global high-tech market?

    Discuss…..

  • ScreenScape – Software for screens in public places

    I had a chance to catch up with Screenscape this week after they announced a new round of financing that came in just over $3million. The Prince Edward Island and Toronto based startup will be using the financing to expand sales capability and speed development.

    Screenscape is a web-based tool that makes it easy to create one of the information displays that you see in shopping malls, doctors offices and other public places. Through a simple drag and drop interface you can create a “screen” and add news feeds, local information, and store specific information (such as sales, announcements, etc). They call it “the Google Adsense of place-based media” — and they have some interesting IP that backs that up. The content of a screen can also be tailored based on the overall “power” of the screen. That is: how many people see it, in which demographic?

    The product has also been focused on being a “networked” tool from day 1: Venue owners can share content, advertisements and messages in a marketplace that makes it easy to cross-promote within a specific geography or with partners you select.

    Before Screenscape there were a lot of options for software that would run a single display, or through which you could push content in a pre-determined way to a certain set of screens, but Screenscape is the first tool I have seen that helps decentralize content production, which makes using a display screen a far less daunting proposition for a smaller venue.

    They also plan to add Foursquare and other integrations which could really help make things like Foursquare more accessible and useful for restaurants and retailers. Through the Foursquare API the restaurant could display things like the current mayor, current people checked-in and Foursquare-specific specials.

    Mark Hemphill, the founder of Screenscape, first introduced me to the concept several years ago, before he had the company started or even the first product built. I had some concerns about the usual things: go-to market strategy, product focus and overall product-oriented execution. I was seriously impressed when I first checked in with Screenscape about a year later. The team had grown and so had the product. Mark’s dedication to building an incredibly refined tool for display-management seems to be paying off. The team continues to grow in both Charlottetown and Toronto.

    The pricing, which starts at $10 a month, seems a bit problematic to me, but Mark tells me that they are selling more and more group licenses to brands such as Bauer which are higher volume deals.

  • Can you pitch in 6 slides?

    Can you pitch your company in six slides? I can’t believe that Fred and Brad raised the first USV fund with only six (6) slides.

    “We learned to simplify our story and we learned how to create six killer slides. And killer slides are not slides with a dozen bullets each. They are six powerful points that combine to tell the meat of the story.

    So when you sit down and build your pitch deck, think of six slides that will inspire and leave something for the imagination. The best part of six slides is that you will get through them in time to have a real substantive conversation face to face about your business. Imagine that.” – Fred Wilson

    Constraints are a great thing. They help entrepreneurs filter and focus their presentations and messages. Getting your pitch down to six slides is going to be a challenge, and challenges are fun. I’m a big fan of the sequence of slides recommended by David Rose’s, chairman of the New York Angels, but even this sequence is 15 slides.

    1. Company Title Page
      Start with the name and logo of the company, the name and title of your presenter, a one-line description or tagline about the company, and the dollar amount of the round you are raising.
    2. Business Overview
      Boil down your elevator pitch to one sentence. Tell us what you sell or do in very concrete language. This sets the context for the rest of your presentation.
    3. Management Team
      Show us your talent and experience, with one line of background (two lines max!) on each member.
    4. Market
      What’s the environment in which you operate, how big are the segments, what are the pain points?
    5. Product
      How do you solve a customer’s pain? What exactly do you do? This can be illustrated with a clear product or screen shot, or a simple process diagram, but if we don’t know what you do, we won’t know why we should fund you. (But don’t spend too much time on this, since you’re pitching the company here, not the product.)
    6. Business Model
      Who pays whom, how much, for what and from where. What does this mean for annualized revenue streams?
    7. Customers
      Who are they, how many are there, how do you distribute to them, and how are they attracted and retained?
    8. Strategic Relationships
      If you have any, make sure we know about them.
    9. Competition
      Who and how threatening are they? What are the differentiation factors? Include both direct and indirect competitors. Remember that everyone has competition, even if it is just “the old way” of doing something.
    10. Barriers to Entry
      How will other potential competitors be kept at bay?
    11. Financial Overview
      Show us your top-line revenues and expenses, and EBITDA two years back and four years out.
    12. Use of Proceeds
      Where will our money take you?
    13. Capital & Valuation
      How much have you raised previously, who are your current investors, what are you looking for in this round, and how do you come to your suggested valuation?
    14. Review
      Provide a brief summary of what you said, in this same order, narrowed to the five or six most important points.
    15. Contact Info/Next Steps
      Lead us into the next step, such as a follow-up meeting for due diligence…and include your contact info!

    I can immediately reduce this to 7 slides, it’s not 6 but it’s close. The goal here is not to provide all of the information in these slides but to boil down the critical information to the salient points. I have been using Business Model Generation and the work of Alex Osterwalder to help build a better understanding of business model, value proposition, key partners and revenue streams. This combined with the slide sequence is a really effective way to model your business, customers, partners, costs and revenues.

    Business Model Canvas Poster V.1.0

  • Cisco looking for Canadian innovation

    We understand that the good people at Cisco are poking around up North for some start-ups to play a role in the company’s expanded focus  into the datacenter, virtualization and smart grid markets.

    These are key new markets for Cisco and clearly they want to know what the most innovative start-ups are up to (isn’t the hunt for innovation why all leading companies come poking around here?)

    Cisco’s got a few criteria (big companies love their processes!) but it should be pretty easy. To summarize: :

    1)      Companies must be active in the datacenter, virtualization or smart grid markets

    2)      Must have existing VC investment

    3)      Ready/able to take their business to the next level

    4)      VC-pitch PowerPoint will be accepted only. (they can’t review websites, datasheets or whitepapers)

    The people doing the poking are Cisco’s Corporate Development team, who are responsible for investment, acquisition, strategy and partnerships for the company. So if any of these options sound appealing to you, forward your slides to Tab Borden of the Canadian Consulate < [email protected]>

  • Be the next Bumptop

    Too bad Bumptop wasn’t actually an ExtremeU company. However, the recent acquisition of Bumptop should help raise the profile of the 2010 Extreme University.

    If you’re a student, a founder or just thinking about starting something you should apply to Extreme University. This is a world-class program, from an up-and-coming venture capital firm in Canada. They have a track record of selling companies to big players (Bumptop to Google, J2Play to EA). The Extreme Ventures, XtremeLabs, and Extreme University programs are building into a fantastic training and breading ground for a new generation of mobile and Internet startups. It feels like something big is happening inside the walls of Extreme Ventures.

    Extreme University 2010

    Who?

    We are looking for four smart and fast moving teams to participate. Typically all members of the two-three person team will be deep technically, but at least one of the founders should have a technical background.

    What?

    • Get an initial $5000 + $5,000 (US) per founder in exchange for a 10% ownership stake in your company
    • Move your team to our shared ExtremeU office space at Yonge & King (downtown Toronto)
    • Have weekly mentoring sessions by industry experts in technology, funding, legal, PR, marketing and HR
    • Meet a who’s who of experts at our weekly socials and have an opportunity to practice your pitch and demo your in-progress prototype
    • Have access to local shared resources to accelerate product development (mentors, servers)

    When?

    Applications are due by June 4th, 2010. The program starts Monday June 14th, 2010 to Thursday September 10th, 2010 at the ExtremeU offices in Toronto at Yonge and King. The final demo day will be Tuesday September 16th, 2010 at DemoCamp

    How?

    It’s a great program located in downtown Toronto for early-stage entrepreneurs and founders. The Xtreme Labs has a great track record. If you’re interested, make sure you apply before the June 4, 2010 deadline.

    Alumni – The Class of 2009

    UkenUken Games
    Uken Games makes highly addictive games for social and mobile platforms.

    Uken Games was born in March of 2009 when two normal guys decided they wanted to have super powers. Given real world limitation, they turned to the virtual world to make their dreams a reality. They built Superheroes Alliance, their first game, which eventually grew to over 150,000 monthly active users. Since then, they’ve launched 2 other games: Villains and Twisted Treasure have amassed over 300,000 total users. Going forward, they are committed to building a strong community around each of their games, expanding across other both social (Facebook) and mobile (iPhone, Blackberry) platforms. Uken Games has received a follow on investment and are driving hard towards this goal.

    AssetizeAssetize
    Assetize is a Twitter ad network that enables publishers to monetize their social content. Publishers within the Assetize network range from large news and media organizations to individual users. The company has also partnered with a premiere sports agency to launch FanWaves – a Twitter monetization network exclusively for the sports world. The growing list of FanWaves publishers includes the NHL, NY Knicks, Phoenix Suns, Washington Capitals, as well as several professional athletes.

    Next, the company plans to extend their monetization solution to other social networks, as well as other links stemming from media websites and blogs. Given the nascency of this space and lack of history, one of the challenges Assetize has faced is partnering with advertisers willing to market through social channels – a difficulty that is expected to decrease as brands realize the immense potential of social networks. Following Extreme University, Assetize is generating revenue and has secured a seed round of financing. The company is also currently in the process of syndicating a larger round from local and US-based VCs.

    LocationaryLocationary
    Locationary is changing the way that data on local businesses and other places is collected and verified.

    This data is fundamental to the local search and local advertising markets which have revenues approaching $50 billion a year. Google and other local search engines currently buy the bulk of their local business data from aggregators that have employees copy the printed yellow page directories. The current process can’t scale and results in expensive, stale and outdated information typically 1 to 2 years old. Locationary has created a patent-pending, crowd-sourced solution to collect and verify this information across the globe.

    Locationary is growing quickly and now has users in over 70 countries. They’ve collected data on over 20 million places and are now updating over 100,000 places a day. In this business, the fresher the data, the more valuable it is; and that’s what makes them special. Locationary has raised a Series-A investment through the connections made at ExtremeU.

    Extreme Labs has a history of bringing great mentors and presenters to interact and engage with ExtremeU participants. In 2009, participants met some of the best lawyers, founders, VCs and others in Canada.

    Albert Lai Kontagent Startup Lifecycle
    Ali Asaria Well.ca How to get funding
    Colin Ground Cassels Brock & Blackwell Setting up a VC friendly structure
    Dan Debow Rypple Sales & Marketing
    Leila Boujnane Idee Business Development
    Mike McDerment Freshbooks Product Management
    Rick Segal JLA Why do a startup now?
    Rick Yazwinski Tucows Agile Development
    Sal Rocco Stonewood Group How to hire superstars

    The list of already confirmed speakers in 2010 is amazing:

  • dna13 acquired by CNW Group

    dna13 acquired by CNW

    This was a crazy weekend for Canadian startup acquisitions.

    First there was Bumptop announced their acquisition by Google. There is StandOutJobs.com being acquired by an unnamed company. Now Ottawa-based dna13 has been acquired by CNW Group. Read the Social Media Release for more details

    “This acquisition reinvents the newswire and we’re terribly excited about it. It’s of benefit to our clients because we’re taking dna13’s technology platform, which is best-in-class, and marrying it with CNW’s suite of offerings. For the first time we’ll be providing an end-to-end solution that will really allow communicators to manage every facet of the communications process. Everything from creating content; targeting your message; distributing your news and information; understanding how that information is being received by your audience to further refining your message and developing metrics. That will all be available to CNW clients in one, single platform.”
    – Carolyn McGill-Davidson, President and CEO, CNW Group

    This makes a lot of sense since CNW Group is a reseller of the dna13 platform under the MediaVantage brand. No details about the purchase price have been disclosed. 

    Looking at the cached Board of Directors page we find:

    We can hope that this was another 10 banger for a Canadian startup.

  • Digital Puck and Mentor Mondays

    There are bound to be more US-led foreign investment firms making their way across the border with the elimination of the long dreaded Section 116.  There have been a number of US firms that were making investment in Canada prior to the removal of this taxation law including: Rho Ventures, GrandBanks Capital and Bridgescale Partners. Bridgescale is an interesting firm. They are focused on the later stage deals but realize that these deals are part of a larger ecosystem.

    Bridgescale is led by Rob Chaplinsky. Chaplinsky is a Mechanical Engineering grad from the University of Waterloo (with an MBA from Harvard). He cut his chops as a general partner doing early-stage deals at Mohr Davidow Ventures. He’s a little old school, investor in Bluecat Networks, and a little new schook, he’s an investor in lean startup ninja Eric Reis’ IMVU.

    There is also Howard Gwin. Howard’s located in Canada. He’s on the ground helping companies, serving on boards, and generally helping companies grow. Currently he serves on the boards of Coveo, dna13, Kinaxis and others. He’s on the ground and focused on helping Canadian companies. He was on the board of Taleo which has a market cap of >$1B. Not a bad guy to have on your board.

    Digital Puck

    The interesting part is the desire to build connection and community. It’s similar to the efforts that the C100, which aim to help Canadian startups connect with senior level talent and connections in Silicon Valley. The Bridgescale team has created Digital Puck. Apparently all Canadian startup CEOs and founders are hockey fanatics (well, that’s not far off from the truth). Digital Puck is an opportunity for Canadian startup leadership teams to connect with each other and other key players. The goal is to help bootstrap the next generation of companies, and if I’m not a rocket scientist to help educate and grow companies that Bridgescale can invest in. The goal is to build the connections. It is through the connections that value is transferred. It may not always be a direct transfer, and the Bridgescale team seems to understand the need for individuals to be connected across Canada.

    Mentor Monday is a mentoring forum for private company CEOs that will take place in the afternoon of the last Monday of every month. There will be three CEOs at each event – a mix of early and later stage companies. On hand will be several very experienced Digital Puck board members – current or past CEOs, CIOs, COOs, and other VP level technology backgrounds. The CEOs will get a great forum to test your business strategy, explore growth plans, look for contacts, board members, advisory board members or just discuss things on your mind. If you are interested in attending, please RSVP on the “Events” section of DigitalPuck.

    Whether this is a Silicon Valley firm looking for better valuations on mid-to-late stage deals in Canada or a set of Canadian expatriates looking to make investments in their country of origin, it’s all good for Canadian startups. I participated in today’s inaugural Mentor Monday session that saw 3 companies present today including:

    It will be interesting to see this event evolve, but I think the session was incredibly valuable for each of the startups. It was most valuable as an participant when the founder introduced their business and then described the business problem they needed advice solving. It was very similar to a board meeting with a lot of outside connections. Where else do you get feedback from CEOs, technologists, funders, lawyers, accountants, etc. There is some evolution that needs to happen to the format, but it was a great session. Definitely a great forum for companies that are looking for go-to-market strategies, sales channel discussions, and other growth questions.

  • 48 hours in the Valley

    The C100C100 - 48 hours in the Valley

    Our friends at the C100 are hosting 20 Canadian companies on May 18-20, 2010 in Silicon Valley. Interesting tradeoff, accepted startups will need to weigh participation in the C100 with participation at OCE Discovery, MeshU and Mesh (assuming you don’t win the GOAP ticket from StartupCamp Montreal). It shouldn’t be a huge debate, because the opportunity to engage with Canadian mentors in Silicon Valley should be pretty straightforward for most startups.

    This is a variant of TechStars for Canadians. You get the chance to connect with the most connected Canadians in Silicon Valley. You can the opportunity to pitch, receive mentorship, and gain access to business development resources. This is a great opportunity for local startups to gain access to markets, companies, and decision makers in Silicon Valley.

    “These customers and markets don’t need to be located in Canada. In fact, Canada can often serve as a providing ground, an incubator, for a variety of market segments. We need to leverage the unique attributes of a diverse population of immigrants for the creative tension of differing viewpoints, and to help forge connections with remote markets.” Creating a Venture Culture, The Mark News

    It is an opportunity for a Canadian startup to build locally and market globally.

    Requirements

    To qualify, companies must:

    • Be substantially Canadian in leadership, employees or location
    • Have a product/service with users/customers
    • Be in a position to expand its business in the U.S. and internationally
    • Be willing to cover its own expenses (flights, hotel, some meals)
    • Be endorsed by a C100 Charter Member or a C100 Seed Partner
    • Apply online

  • Build Locally, Market Globally

    I read The Mark’s special on venture capital in Canada and while I agree with all of the hub-bub about a lack of early stage financing in Canada, what I want to talk about is the other side of the equation; the Canadian entrepreneur and our sense of addressable market.

    First, a bit about myself to give you a perspective on where I am coming from. I started my career in Ottawa, one of Canada’s tech capitals. My first startup had customers around the world, initially most were in Europe, over time the US represented our largest base of customers. While the Canadian government was the reference customer for my next startup, American customers soon drove over 80% of our revenues. The story is similar for every startup I have been part of.

    So, I wonder “why” when I speak with Canadian entrepreneurs and hear that they are chasing a domestic market and have no foreign competitors in their sights. Canadians are very talented, but sometimes we tend to not “think big” enough – it is an unspoken reason why our startups don’t get funded.

    One would think that Canadian entrepreneurs aspire to enter larger markets in the United States and across the pond in Europe and Asia. But what I keep hearing is “our target market is… the 5 big financial buildings in downtown Toronto, or the large insurance companies in Toronto and Montreal, or the federal government in Ottawa…”

    GlobeSure, land your first customer on home turf – Toronto, for example, is a hotbed of financial, insurance, mining, and advertising companies. Call up all of the people that you know at these Canadian institutions to get that pilot account – but as soon as you have refined the product and pitch, start looking beyond Canada’s borders for customers.

    That slide in your funding presentation with addressable market numbers for the US mean nothing if you don’t spend any marketing dollars generating leads and time on the road landing new prospects south of the 49th parallel.

    Canada represents just a small fraction of the market opportunity for your startup. Drive sales abroad, then even if Canadian investors don’t step up, with a global customer base and growing revenues, you will attract the attention of foreign investors.

    Build locally, market globally.

    This guest post was contributed by Roy Pereira. Roy is the founder of Shiny Ads, a self serve advertising platform for long-tail advertisers. You can follow Shiny Ads on Twitter: @ShinyAds