Category: Canada

  • J2Play Acquired by Electronic Arts

    J2PlayThat was fast! Earlier today Electronic Arts announced the acquisition of J2Play in their latest quarterly report. Congratulations to Rob and the entire J2Play team!

    Waterloo based J2Play was founded by Rob Balahura in 2006 to create the world’s first mobile multiplayer game and SDK. The product that ultimately emerged was a “social wrapper” for online games, the first incarnation, a Facebook App that enabled games to be embedded within the social network and extended with chat and leaderboards.

    While the J2Play powered games themselves garnered limited user interest, Facebook having reined in on Apps in a catastrophic way for most, the team was hard at work establishing relationships with industry leaders who wanted in on some social network pixie dust.

    extremevpJ2Play was funded by Toronto’s Extreme Venture Partners. Running with the new fund was a smart move on Balahura’s part, they were instrumental in getting the company in front of fbFund and helping secure an additional $250,000 in follow on grant funding. Worth note, ExtremeVP has also since been able to secure follow on funding for Kontagent.

    The terms of the acquisition were not released, but ExtremeVP’s LPs have to be pleased. This early exit bodes very well and has demonstrated some savvy investing by partners, Amar Varma and Sundeep Madra.

  • Because Startups Need Each Other

    “Because startup entrepreneurs need each other.”

    The Philly Startup Leaders have published a manifesto for startups. The manifesto embraces the call for community. It reminds me of the passionate call that Jevon led with "How Startups will save Venture Capital in Canada” and “I love my city, and so should you”. It is about enabling entrepreneurs! And more importantly, it is about the realization that we are a community, we need to support each other.

    Starting a company can be a long and lonely journey.

    Each milestone is a small miracle—from idea to prototype, from first employee to first customer, from first revenues to first profits and eventually to a thriving, successful business.  Most startups fail along the way.

    To survive this journey, startup entrepreneurs need many things. They need access to funding and talent.  They need support from their government and their community.  They need opportunities to educate themselves and their team.

    But more than anything else, startup entrepreneurs need each other.

    Toronto, Waterloo, Montreal, Vancouver, Ottawa, Calgary, Halifax. We’re all very lucky. We have growing, thriving communities of entrepreneurs. We’re connected to each other. It is our responsibility to help each other. To make the connections. To build the fabric. To call bullshit. To build the next great thing.

    This is beyond just casual connections. We have a lot of disparate resources and individuals. I’m not suggesting that we need “one ring to rule them all” but that we need to do a better job helping entrepreneurs connect with each other. And this will requires a personal commitment to an open, creative community and conversation. We need to build something like the PSL Values.

    Philly Startup Leaders Values

    1. We know our niche: startup entrepreneurs.
      Our focus is our advantage.
    2. We are a community.
      Starting a company alone is painful.  Along the way, our greatest need is the company and support of entrepreneurs like ourselves.
    3. Our community depends on deep, open and frequent communication.
      This kind of communication is essential for our members to get to know and trust each other.  As an organization, we earn the trust and loyalty of our members by communicating with them in the same way.
    4. We believe in lean and flexible leadership.
      Bureaucracy and hierarchy tend to stifle entrepreneurs.
    5. We don’t replicate other organizations and events in our ecosystem.
      Instead, we support other organizations by partnering.  We produce only unique and complementary content.
    6. We encourage entrepreneurship within our organization.
      Any member can champion a cause they believe in.  When they do, they have access to the same resources the leaders do.
    7. We believe that entrepreneurs of all experience levels should mentor one another.
      We have all had great teachers, and it’s our responsibility to give back to our community.  This includes our fellow entrepreneurs and those who ought to be.
    8. We love our city and our region.
      We walk the same streets as Benjamin Franklin, an entrepreneur whose inventions and institutions have survived for generations.  We are inspired by our history and proud to be writing its next chapter.

    What can I do?

    1. Participate.
      This is the very first step. Blog. Tweet. Comment on posts. Share links. Attend events. There are lot of events designed to help entrepreneurs connect with other entrepreneurs and others in the community. In Toronto, check out the YouSayYeah Community Calendar. In Vancouver, check out the Bootup Labs Events page. In Montreal, check out TechEntreprise. Use social media to connect with others. The reason we started StartupNorth was to make it easier to find out about Canadian startups.
    2. Patronage.
      It might sound a little like protectionism, but it’s about supporting your community. What was the last product or service you purchased from a startup? From a local startup? If you work for an established company, you should be looking for tools, people, companies, products that give you a competitive edge. Look for vitamins or painkillers, remember this is not a charity activity (though it often feels like it). We are all looking for competitive advantages, and there are lots of startups with new solutions to problem. Look at StartupIndex to find new startups. If you’re a startup, and you want some additional coverage, drop us a note (but check out previous stories iLoveRewards, GigPark, make it easy for us to write a story about why people care). 
    3. Provide feedback.
      When you find a startup, an entrepreneur or a product that only sort of fits what you are looking for, share the information back with the company. Help them build a better product by giving them customer or potential customer feedback. What were the key features that were missing? What was wrong with the pricing model? Why won’t it work in your corporate IT infrastructure? This is valuable information that a lot of young startups need to gather to iterate and improve their offering.
    4. Celebrate failure.
      Did you take a job working for an established company because your startup failed? Share your stories about what worked, what you did wrong, what you’d do differently if you could do it again. How? See # 1. Hire a failed entrepreneur (I know I appreciate the opportunity provided by Microsoft Canada to be startup guy in Canada running BizSpark). We’re all in this together, it feels like I’ve been working with and for startups since the beginning of time. And if I’m lucky, I’ll be doing this for many years in the future. And I know I’ll have a few great stories about what I did wrong.

    It’s up to all of us to celebrate the startup successes and failures in Canada. Personally, if you’re a startup I’d love to hear what you think StartupNorth should do to help you.  Please comments with your suggestions for stories formats, events, site improvements, etc.

  • Hustle ventures

    I’ve been thinking that we need to create a local incubator, and I’ve started to wonder where this fits in Jevon’s vision of saving VCs in Canada. And it’s an easily understood way to go about deploying small amounts of capital and managing the risks associated with the investments. There are folks beginning to do this in Vancouver, and Montreal. They provide entrepreneurs with capital, education, mentorship, promotion mechanism, market development, among other offerings. They are angels, VCs, and others hustling to find deals, to help their portfolio grow and be successful. Most of all we need to lead by example. We need to build real companies like Well.ca, FreshBooks, DayForce, Rypple, PlentyOfFish, ElasticPath, Idee, and others. The focus needs to be, not on raising money, but on finding customers and solving problems for the marketplace. There is money is available to help companies once they’ve found a customer, when they need to do marketing, additional product development, etc.

    The gap that is identified is at the very earliest stage of the investment pipeline. There are less entrepreneurs starting fundable companies. This is because there have been less successful startups that spinout human capital, culture and ideas. The lack of Fairchildren means there are less successful individuals that have earned their pedigree and training at a successful startup. Basically, there is a bunch of stuff that can be best learned by doing it for another startup (success or failure). It’s not only about technology, it’s about finding customers, raising money, building products, doing business development, developing personal and professional networks, learning how to do sales, etc.

    But we’ve had a dearth of these startups? Maybe not, but there has definitely been a dearth of Fairchildren from these companies. Definitely not enough to create a viable, self-sustaining ecosystem of entrepreneurs and angel investors in the technology space. And this has left a gap in the very early-stage entrepreneurs and funding creating early-stage technology ventures. This gap may have longer term repercussions, the most easily identifiable is in the declining number of early stage investment in Ontario.

    Who is motivated to create an environment with early stage deals, educated entrepreneurs and culture of educated risk taking? Who is going to do the hustling to make these ventures happen?

  • Porn Shops and Tech – Toronto's Silicon Valley

    Startup activity in Canada stalling? VC investment dying?

    Well folks, problem solved.

    050829lIt’s hard to know what to say about efforts like this. I guess that where I believe physical clusters are a sign of success, government officials and universities believe that they are a precursor to success. To that end, more money is being spent building the new Silicon Valley North, this time it is smack in the middle of the porn shop and peepshow strip in Toronto.

    Pun intended?

    What frustrates me the most about things like this, and other projects is that I know there are smart people working within government who understand what technology, software and web startups need, but as those people plug away trying to help startups, programs and projects like this are announced that undermine everything the smart folks have done.

    Everyone wants to go big right away. To hit a grand-slam home-run if only we can just build the right building, or create the right program. There is no evidence however that any of this stuff has ever worked before.

    If beaurocrats and politicians want to have an impact here, then the reality of what needs to be done will be a lot less glamorous. It means Democamp’s at the Imperial Pub and StartupEmpire‘s at cheap nightclubs.

    The only good part of this announcement is that Ryerson is in on the action. I think that school is great and a place that turns out hard workers and great entrepreneurs.

    In the end, it doesn’t matter, Toronto’s tech community (for whom I am not the voice, but just one voice) has long given up on government programs and venture capital. We have focused on getting really good at finding the winners early on, and we are going to start capitalizing on that skill soon. We have to.

    So, the next time you walk up Yonge Street looking for a Kabab or a fake ID, take a look around and imagine, for just one second, what an office on the top floor of Zanzibar would be like.

  • Update #2: PWC SR&ED Seminar – Thursday, Jan 29

    Those tickets went fast! By popular demand, the good folks at PWC are going to run an Afternoon SR&ED Seminar Thursday, January 29 as well.

    SR&ED is easily the largest tax credit program available to Canadian companies for recouping R&D spending with over $4 Billion being distributed each year. SME’s can recoup 35% of their R&D spending from the Federal program and then layer on Provincial tax credits as well. Thousands of tech entrepreneurs across Canada have used SR&ED to bootstrap their companies and stretch R&D dollars. This is not a government program you want to ignore. So you might be concerned by the recently announced changes to the SR&ED claims form (T661) and process.

    pwcWell then register now for the upcoming PWC SR&ED Breakfast Seminar. There is no cost to attend, but seating is limited, so you’ll want to RSVP as soon as possible.

    PWC SR&ED Breakfast Seminar
    *Update #2 – Morning & Noon sessions have reached capacity, but an Afternoon session has been added.*
    7:30 a.m. – 8:00 a.m. Registration
    8:00 a.m. – 9:30 a.m. Presentation and Q&A

    11:30 a.m. – 12:00 p.m. Registration
    12:00 p.m. – 1:30 p.m. Presentation and Q&A

    2:30 a.m. – 3:00 p.m. Registration
    3:00 p.m. – 4:30 p.m. Presentation and Q&A

    PricewaterhouseCoopers
    King West Rooms 1 and 2
    145 King Street West, 11th floor
    Toronto, Ontario

    Please register by January 26, 2009 at http://www.pwc.com/ca/sred or contact Simone Knott by email [email protected] or phone 416-941-8383 x14498.

    We invite you to join senior members of the PricewaterhouseCoopers SR&ED group as they discuss the implications of these recent changes on the preparation of your SR&ED claims and your claiming processes.

    The seminar will highlight:
    • What the changes are (and what has not changed)
    • How to adapt to the changes
    • Transitioning from the old form to the new form
    • Old vs. new terminology

    We hope you can join us. We know you will not want to miss this opportunity. If you have questions related to this topic that you wish to be addressed during the seminar, please include them in your RSVP.

  • CIX now accepting applications – Takes place March 3rd and 4th

    picture-4The Canadian Innovation Exchange is taking place on March 3rd and 4th again this year in Toronto. The event appears to have been compressed mostly in to 1 day with some pre-event socials taking place on March 3rd.

    This is a tough time for Canadian startups, we certainly heard that loud and clear during StartupEmpire, but it is also the chance to focus on our strengths and to take advantage of what makes Canada’s startups great.

    Registration opens in January, but in the meantime, fill out the submission form and start working on your pitch.

  • Pipeline – US Venture Funding for Canadian Startups

    Looking for venture funding? Consider participating in the following initiative run by PWC and Burns & Levinson LLP.

    The US/Canada Venture Capital Pipeline links venture capital firms and investment banking firms based in the US with Canadian companies seeking financing. The event is designed to build relationships and create business opportunities between US investors and Canadian companies. This December 4, 10 Canadian IT companies will head to Boston to meet one-on-one with U.S. investors.

    The deadline to submit applications is November 14.

    Here are all the details. If you are interested in applying, please contact:

    Leonard Gold
    Managing Director
    Burns & Levinson Canada Co.
    Partner, Burns & Levinson LLP
    lgold(at)burnslev.com
    617.345.3831

    Charles Godbout
    Vice President, Corporate Finance Inc.
    PricewaterhouseCoopers LLP
    charlesgodbout(at)ca.pwc.com
    514.205.5020

  • You better be on the upside of the downturn

    You could argue that we are always in a downturn. Even when things are on the way up, a smart entrepreneur realizes that it will be followed by the downward sloping of the curve. It goes up, it goes down.

    So here we are. I posted just a few weeks ago that I thought things were rough, and were going to be rough. I have to say, even though it was only two weeks ago, things have changed a lot since, at least in terms of people’s outlook.

    So here is the trick. It is time to use this period to your advantage.

    A handful of VCs in Canada have put together “seed” options in their funds when they raised them a few years ago. These range anywhere from $250k to $500k and are usually simple convertible debt notes. Until now it hasn’t been very cost effective for them to spend much time issuing these. Either an opportunity was good enough that they wanted to invest in it full-tilt from their regular fund, or they just didn’t like it. Most didn’t want to spend much time with the “it might work” group of startups (which is where all good ideas start!).

    Watching the gameMy sense is that this is changing. Some of these VCs are starting to think that these might be just the right instrument to get some startups off the ground in the next little while. Those are the smart VCs, the ones who adapt quickly and who understand that the upside will be coming back in to focus.

    This is your chance to start to hustle while others are taking a breath on the sidelines. The challenge for we startups is to structure our companies in a way that makes sense for the current environment, and for VCs the challenge is to realize that this is a critical point for the industry in Canada, and those who are left have to jump in the game and send a signal.

    And this isn’t all about getting funded. This is the time to hustle even more if you are going to bootstrap. Build your product now and test it, when the upside comes again, you will be ready with a product and some customers, then you can focus on going deeper in to the market.

    The truth is, we will never know when the bottom of this situation will show up. Like it or not, the upside of this downturn is coming and the best way to lose is to stop working hard right now.

  • Riffing on being a startup in Canada

    I think we sound like a couple of nerds stuck in an elevator, but we gave it our best shot.

    Dave and I were hanging out last week and decided to stand in front of a camera, this is what we had to say.

    We have some big announcements to make about the conference in the next week. New speakers, some incredible opportunities for startups one of the coolest parties all year! And don’t forget, the final schedule as well.

    Thanks to everyone who has registered so far. There was a big rush before the early bird deadline, and we are watching the remaining tickets as the go. This is going to be a lot of fun, and we hope you will walk away with everything you need to go to the next level.

    This has been a lot of work, the blood, sweat and tears kind of work you all put in to your own startups every day. Seeing your smiling faces will be the reward! 😉

    If you haven’t registered yet, head over to StartupEmpire.ca and do it now!

  • Garage Canada in the deadpool?

    Garage Canada has had, to say the least, a poor reputation as of late. Fundings that happened, and then didn’t happen, a lack of activity and general uncertainty about just how serious they were.

    It seems that things may have finally come to pass, and Garage Canada appears to have called it quits.

    Lawyer Suzie Dingwell-Williams notes

    Now, the Garage Canada web site is down, there is no reference to the affiliate on Garage’s US site (although Tom used to be listed as an advisor) and there comes news that some of the former fund staffers are forming a new entity St Lawrence Capital(no website yet). What happened to the portfolio, and the undeployed capital contributed by Quebec LPs like Caisse and Soldiarity Fund QFL?

    I have sent out a few emails to find out what is going on. If you have any insight, comment below.