I was ready to get some nails and start sealing the coffin of Bootup. The whole scenario has been a huge credibility killer for Bootup and I am sure it has been tough on the community in Vancouver.
Before I started hammering away at those nails however, I decided to reach out to Boris Wertz. Boris Wertz is a bit of a sage and I figured he would have a sense of what was going on. It was then that I found out that Boris W would be joining the board of Bootup and would be helping to back it.
Danny Robinson posted yesterday that the other Boris, one of the original founders, would be leaving Bootup. I’m not going to speculate on what caused this, but it does seem like everyone at Bootup have committed to doing whatever it takes to get this thing back on the rails.
So here is my endorsement for the new Bootup. Vancouver needs Bootup as much as Bootup needs Vancouver, and with these recent changes I hope that the Vancouver community can get behind Bootup 2.0 as well. I expect that it will take a while, and Bootup will suffer greatly for it, but time will hopefully heal all wounds.
Vancouver is truly one of the best cities in the world, and I know that the startup community there will continue to live up to that reputation. It is a unique place, with a unique startup community and set apart in Canada. Vancouver is a lynchpin of change and I hope a city that leads the charge in rebuilding the definition of what it means to be a startup in Canada.
“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.
Is there any questions that the Canadian venture captial industry is in turmoil? There is a change that is happening, it might just not be happeing as fast as it could. Mark McQueen talks about the the creative destruction of the VC industry in Canada.
“There’s no robust “new class” of VC firms coming in behind the current oligarchy, with a similar amount of capital to deploy as those they are planning to replace. We are witnessing the destruction piece of the equation, for sure, but not the rebirth that is the essence of “creative destruction” if it is to succeed.” – Mark McQueen, Wellington Fund
While there are a few new players entering the market (I’m looking at you ExtremeVP and Mantella VP), we’re seeing a lot of roadkill. There are firms that are not able to raise their next fund, partners that are on life support, startups that are left to wonder what happen to their partners in raising additional capital. However, many that remain are digging in and fighting for their way of life. They are lobbying for support to “manufacture an environment that is hospitable to their investment style”. Adam Adamou at Caseridge Capital Corporation argues that the existing venture players, the Canadian VC oligarchy, has successfully lobbied for restrictions that have kept out new players including the public/private venture capital that was used to fund RIM.
“The traditional venture capitalists see themelves as the founders of a “Silicon Valley North” and they follow the US trends, which unfortunately do not apply to our Canadian market. They seem to see themselves as avant garde investors in tomorrow’s technology companies, however, they behave more like bankerss[sic] – preferring security and downside protection over opportunity”
Yikes, that’s a damning review of the Canadian venture industry. However, I’m not sure that the suggested alternatives including Capital Pool Companies and the TSX-V are really better choices for Canadian entrepreneurs (or investors). (I’m not an expert on CPCs or TSX-V but when my friends and trusted advisors like Mark McLeodprovidecommentary, I listen). What I took away from The Adamou Rant is that many of the funds have a vested interest in the maintaining something akin to the current system. Governments should look critically at the numbers being presented and who is presenting them.
The State of a Nation
Is the sky falling? What is the state of venture capital in Canada? Is it really this bad? And why does it matter to early-stage entrepreneurs? Should we all just move to Silicon Valley, New York City, Boston or somewhere else?
The Canadian VC environment has been challenging for a lot of entrepreneurs. As entrepreneurs, you need to understand the environment that you will start, fund, and grow your company. Canada has a strong track record of access to capital, a stable economic policy and should be a great spot for entrepreneurs. It’s also unique. Canadian companies tend to be at a later stage of corporate development and raise less money than their US counterparts. I’ve written about the impact of the state of the funding environment has on startups. And what entrepreneurs can contintue to expect to see, includes:
The number of investors will continue to decrease
Valuations will continue to decrease
Customer uptake will be slower
Need to become cash flow positive
Acquiring entities will favour profitable companies
VC investments in Canadian firms hit a 14 year low in 2009
US venture market saw US$18 billion invested in 2009, Canada saw only $1 billion (5.5%) our economy is approximately 12.5% the size of the US economy
Up to half of current Canadian VC funds will not be able to raise their next fund
Ontario government has sunset the $1 billion Retail Venture Capital Industry
“Section 116” was fixed in the 2010 Federal Budget, however, this is not a silver bullet
117 disclosed cross board investments since January 2008 (this includes Canadian investments in US companies)
Canadian Fund of Funds have lots of capital to invest in foreign led funds: EDC ($1.2 billion); Teralys ($700 million); OVCF ($205 million)
A New Hope
We need to hope that from out of the ashes will emerge a better funding environment for Canadian entrepreneurs. Whether this is led by new funds, angel investors, US funds, or the existing players learning from their mistakes, it doesn’t matter.
We’re starting to see a strong set of the big players making acquisitions across Canada:
Our startups need real capital to continue to compete on the world stage. But They can’t survive on SR&ED credits alone. We need to hope that this creative destruction happens quickly, so that something can rise from the ashes and we can witness the rebirth of the Canadian tech startup.
A 2nd win in as many days for angel investor Austin Hill, StandoutJobs has been acquired. From Ben Yoskovitz’s blog:
Around 3 years ago I started Standout Jobs with two great guys – Fred Ngo and Austin Hill. We raised money, built a great product, hired an incredible team and worked to build a business. Today I’m very pleased to announce that we’ve sold Standout Jobs.
I can’t name the acquirer at this point in time. I can tell you that I’m very excited to see what they do with Standout Jobs, because I fundamentally believe what we built and the vision we pushed will be standards in the recruitment industry for years to come. Companies that ignore their employer brands and don’t create a quality, interactive, candidate-centric hub on the Web for recruitment will lose.
Something was definitely up with Bumptop in the last few weeks, and the rumours were flying all over the place. Not wanting to kill a deal, we decided not to post anything here on Startupnorth, especially something we couldn’t fully substantiate.
Bumptop was first funded by Xtreme Venture Partners and Austin Hill and followed by Scott Pelton at the Growthworks Commercialization Fund. Based on what we know about the terms that drive Xtreme Ventures and Growthworks’ Comm fund deals, our guess is that the price of this acquisition is north of $25million.
What does this mean? I believe it means that Google is working hard to develop an iPad competitor. If you have used Bumptop before you will know that it is one of the most intuitive touch-screen interfaces available, much better than the current iPad “mash your finger everywhere” UI. Bumptop is undoubtably the owner of some pretty nice IP focused on those interactions, and they now give Google a warchest of techniques that will easily rival multi-touch. The three-finger-swipe and two-finger-zoom of the iphone and ipad are easily outclassed by the extensive capabilities of Bumptop, but Bumptop’s gestures are just a little too complicated for the small screen of the Android or iPhone. Bumtop holds a Canadian patent for many of the gestures and features.
I have to hand it to Anand. For the last 4+ years he has walked around Toronto with his laptop strapped to his back always ready to give anyone a demo of Bumptop. His energy and focus have definitely set him apart from the crowd, and he stuck with his dream longer than many of us thought he would. Eventually the right people stepped up to back him and he seemed to become more determined than ever to make Bumptop a success. This was not handed to Anand, he worked for it.
This is exactly the kind of story that many a bad VC will tell you can never happen in Canada. A fast, efficient and IRR-pumping exit. There are all sorts of dead and dying VCs here who will tell you that there is not enough of an “entrepreneurial culture” to drive their business, no wonder their LPs are putting them on notice (the sad part is that some good funds are getting dragged down with the bad –more on that later) — they aren’t willing to get down in the dirt (or the Imperial Pub for that matter) to meet the Anands of the world.
The truth is that it takes financiers with as much hustle and vision as an entrepreneur, and that is what we are getting with XtremeVP, Austin Hill, and Scott Pelton. In my eyes this deal is a confirmation of the need in Canada for a new type of venture fund(s) to get healthy and to get the backing they need.
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
Heri started MTW about the same time that we started writing StartupNorth. He has become a good friend of mine over the years and is someone who always has the best intentions of the community at heart in everything he does.
The main complaint is that there just aren’t any posts on MontrealTechWatch anymore. The blog which was once the center of the Montreal startup community is now more or less dead. The simple reason? Heri just doesn’t have the time to blog anymore. I think there is more to it than just that however.
StartupNorth might have met the same fate as MontrealTechWatch this year if David Crow hadn’t joined in to bear the brunt of the burden. Since the sale of my company last year I, like Heri, have had practically no time to devote to the blog, and Jonas was similarly stretched for time. In the case of MontrealTechWatch, Heri didn’t have a Dave or Jonas to put their shoulders to the wheel. The community that was once so loving lost its leader and didn’t even realize it.
So, what’s going on here? Do we need startup communities? Do you want a community? Are people really willing to pitch in and spread around the work? Do communities need community, or do they really need leaders? How do we create more MontrealTechWatch’s and keep them around?
There is a push in Montreal to make some plans and to get a group together to revive what was MontrealTechWatch. Montreal does not need some coordinate effort, it needs someone to open their email client and send Heri a message “Hey, can I get an account on MTW as a writer? I would like to make some posts, perhaps profile some of the amazing startups we have here in town and cover some events.”. Then, when you have the account: just start posting. Just do it.
Find what it is about startups, community and your city that you love and then do something about it. Share it. That is what Heri did and that is what we need more of. Nobody else is going to step up. As soon as you start writing about what is happening in the community, you will quickly learn what else the community needs in terms of events and content.
The problem, as Heri found out, is that this is hard and very unrewarding work. People rarely say thanks, and even less often step up to actually help.
Heri put his heart in to that blog and he didn’t ask for anything in return. This is your chance to show him that you understood what he was doing and that it meant something to you. Pick up the torch, but please don’t kill MTW by committee.
Ontario Centres of Excellence are hosting their innovation-to-commercialization conference again in Toronto. The OCE Discovery 10 conference is happening May 17-18, 2010 at the Metro Toronto Convention Centre. They have a history of bringing great keynote speakers including Clayton Christiansen, Nassim Nicholas Taleb and Sir Terry Matthews. 2010 is no different, the OCE team is bringing Steve Wozniak to Toronto.
Sure we know Steve from the Apple I and Apple II computers. You might even know him from Dancing with the Stars. You probably didn’t know that the Gipper awarded him the National Medal of Technology, the highest honor bestowed America’s leading innovators, in 1986. And Steve Wozniak is still working on new technology. He’s a the chief scientist at Fusion-io working flash-based memory architectures for storage. He’s on a member of the board for member of the board of directors for Jacent, a developer of cost-effective telephony solutions, Danger, Inc., developer of an end-to-end wireless Internet platform, Ripcord Networks and others.
He’s an engineers engineer and knows a thing or two about tech startups. He’ll be at OCE Discovery from 2:00pm – 3:30pm and this includes a book signing opportunity (Mac nerds rejoice, even more impressive if you have an Apple I or Apple II to get signed).
“Every engineer—and certainly every engineering student—should read this book. It is about the thrill of invention, the process of making the world a better place, and the purity of entrepreneurship. I, Woz is the personal computer generation’s version of The Soul of a New Machine. It is, in a nutshell, the engineer’s manifesto. I hope that the so-called “innovation experts” and MBAs choke when they read it.” – Guy Kawasaki
The rest of the OCE Discovery 10 schedule is packed full of startups, policy makers, innovators, academics. We’ll be hosting a DemoCamp, while not currently as cool as the “Ontario’s Next Top Young Entrepreneur Start-up Pitch” happening on Monday, May 17 which will give grant the winning startup a “non-recourse micro-loan of up to $18,000 ($6,000 per team member) to launch a new start up, have access to advisory services and have the opportunity to network with key mentors and private investors”. It is a great opportunity for local startups to demo their wares and do demand generation with local investors, government agencies and businesses.
We’ll be doing a bunch of work to clarify what type of startups can maximize the value from presenting and start accepting nominations for demos in the next couple of weeks. What DemoCamp for details.
Discovery DemoCamp Tuesday, May 18, 2010 3:15pm-4:15pm EDT
Inspired by Toronto’s Tech community, see showcase technologies presented in 5-minute demos by some of the communities hottest inspiring web, mobile and social media startups.
StartupSquare is hosting their kick off event on April 13, 2010. The group is made up students at McGill University, Concordia University, HEC Montreal, and other local universities. The goal of the group is to help promote entrepreneurship and commercialization to create growth companies. It is roughly modeled on Aalto Entrepreneurship Society which was started by StartupSquare co-organizer Riku Seppala.
It is great to see entrepreneurs take responsibility for ensuring that the events and activities they need and want are created. Make sure you check out both of these groups, they are doing great things.
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…”
Sure, 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
We kept pretty mum about the recent mess at Bootup Labs that culminated with a Techcrunch piece and a “I’m Sorry” post from Danny Robinson, one of Bootup’s founders.
A 2nd win in as many days for angel investor Austin Hill, StandoutJobs has been acquired. From 
Sure, 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.