StartupNorth

  • Rewardli in first 500 Startups accelerator class

    The first cohort to join 500 Startups accelerator has just been announced. Included is a Canadian team led by George Favvas who is working on a project called Rewardli. Not many details on the startup yet, but the focus is “helping small business owners leverage their social graph in interesting ways.”

    George had this to say: “We are incredibly excited to be a part of the first batch of startups to go through the program. Dave McClure is obviously a very visible leader but there is an entire team behind him, not to mention a network of over 100 mentors who actively help and hold office hours in the accelerator. Unlike YCombinator, all 500 Startups accelerator companies share physical office space in Mountain View, which I think is a good idea as you can sense the energy just by walking into the room. There are events, talks, and workshops which often focus on the core themes of design, data and distribution. At the end of the program, we expect to have iterated enough to have a minimum viable product that addresses a real pain point, and raise a round of follow on financing.”

    Update: Real Ventures is participating in the seed round as well.

  • Chango closes a $4.5m Round B

    Chango has announced today that they have closed a $4.5 million B round that includes their existing investors as well as lead participation from Rho Ventures (Canada) and iNovia. Roger Chabra lead the deal for Rho and this represents his first placement since joining Rho Ventures last year.

    Christopher Dingle has also joined Chango from his role as EIR at iNovia (although he seems to have joined in October, so I am just catching up it seems). Notably absent from this round as well as the Series A is MantellaVP, who seem to be participating in the form of sweat equity but not in the form of capital placements as Duncan Hill is actively operating on the management team. Perhaps I am unclear as to Mantella’s model, I thought they were operating as a traditional fund but perhaps their model is changing. That could make sense as both Duncan Hill and Robin Axon have a lot to contribute in terms of operating capability.

    Chango is an AdWords style platform for display (banner) advertising which is focused on low-latency ad targeting and serving across networks. As inventory has become realtime they are able to distribute highly targeted ads across that inventory. This sort of targeting was not possible in past models and Chango seems to be utilizing capital to stay ahead of the curve as more players enter the space. Chango also has the unique ability to automatically generate the banner ads being served.

    The most important aspect of this deal is that Canadian capital is being put to work to power a high-potential company that otherwise likely would have closed a US focused deal. This type of growth capital was much less active just up until recently and it represents the critical role that iNovia, Rho and others are going to play in the Canadian landscape in the coming 5 years. The health of these funds is critical to our ability to create value based in Canada that can attach US and international markets with a comparable amount of resources. Albert Lai famously made a splash about the lack of growth capital in Canada in 2008 and it is my hope that the situation is now changing.

  • CIX Canadian Technology Accelerator

    When I heard about the CIX Technology Accelerator last week I asked the folks at CIX to write a guest post to tell us more about why they decided to partner with a SF based accelerator to put this package together. I’m not sure about the immigration visa issues around this arrangement, but I assume that is taken care of as well? — Jevon

    Canadian Innovation ExchangeThe Canadian Innovation Exchange (CIX) is delighted to announce that, in partnership with DFAIT and the Consulate General in San Francisco, we are launching a new program to support the innovation community in Canada – the CIX Canadian Technology Accelerator.

    The idea is simple. So many emerging Canadian tech companies – from the most early-stage start-ups to more developed players – have told us that they’re eager to develop stronger connections in Silicon Valley, but haven’t been able to find the right opportunity. Well, here it is: the Accelerator will put three qualified Canadian companies in the Plug and Play Tech Center (PnP) in the heart of the Valley for three months, rent paid, starting in June, 2011.

    What makes this program truly unique is that PnP is more than just a fully serviced work space. Selected companies will be working alongside over 150 tech start-ups from more than 20 countries while meeting experienced mentors and advisors who can guide growth and development in the Valley and beyond. The program also offers introductions to local angel networks and VC firms and dedicated access to the Canadian Trade Commissioner Service. Finally, each company will receive a complimentary pass to CIX 2011, taking place next December in Toronto, bringing back the knowledge and experience gained in California and helping to further enrich Canadian connections in the Valley.

    The program is open to any Canadian-based tech company working in Digital Media and Information and Communications Technology. Qualified companies are invited to fill out a brief profile on our website before March 11th, 2011. An expert CIX Selection Committee will review submissions, and the three selected companies will be announced in early April.

    For more info and to enter, head to our website at www.canadianinnovationexchange.com.

  • StartupVisa – The Canadian Edition

    Photo by http://www.flickr.com/photos/eduardozarate/3910529487/in/photostream/
    Photo by Eduardo Zarate

    Canada is a great country. One of the defining characteristics are the forward looking immigration policies that appeal to educated potential immigrants.

    Danny Robinson (@dannyrobinson), Maura Rodgers (@maurar), Boris Wertz (@bwertz) started StartupVisa.ca as a response to the StartupVisa.com created by Eric Ries, Dave McClure, Shervin Pishevar, Brad Feld, Paul Kedrosky, Manu Kumar, & Fred Wilson in the US. The goal is to modify existing Canadian immigration policy to expedite the process for entrepreneurs and change the “minimum net worth of C$300,000 that was obtained legally” to include provisions for “Canadian funding of $150,000”.

    Danny was giving me a hard time the other night because I have not signed or blogged about the StartupVisa.ca efforts (unlike Mark MacLeod, Financial Post, HackerNews, NextMontreal, TechVibes and others). I agree with the efforts in principle. I think changing the immigration policy to be more entrepreneur friendly would help Canada. My issues centre around the wording of the proposed changes. I am not policy writer, I am not a policy wonk. But it feels like the proposed changes do not meet the requirements of good policy. This is where the proposed US legislation feels more robust and complete. The provisions of the existing Entrepreneur program are great and include:

    • You must control at least one-third of the equity and actively manage a qualifying Canadian business for at least one year after becoming a permanent resident.
    • The business must have created the equivalent of at least one full-time job (1,950 hours of paid employment) for a Canadian citizen or permanent resident (other than yourself and your dependants)

    I would like to see provisions that include:

    • a better definition of “qualified Canadian funding” – we’ve seen attempts at this in the past including FedDev efforts for Southern Ontario, the goal is to specify funding sources to avoid potential immigration challenges of related to regulating potential groups of investors
    • further clarification about immigrant equity ownership as related to the investment dollars. Currently the criteria includes a definition of ownership of a Qualifying Canadian business as defined by meeting any 2 of the 4 presented criteria around ownership, net assets, sales, income or jobs. It is unclear how the impact of pre- and post- money valuations potentially have on the ownership requirement. My concern is that including further investment could dilute the entrepreneur and make them ineligible according to the sales or ownership criteria already defined in the immigration policy.

    I was also curious at the substantive change from $300,000 to $150,000. This reduction is fairly significant. The only reason I can think is that the proposed changes are about investment per person and not corporate investment. My guess is that this requirement is reduced given anecdotal evidence of current entrepreneurs and investment levels in their company from a single angel investor, i.e., this is the investment amount in the company divided by the number entrepreneurs to get $150,000. It’s just unclear how this number was derived.

    So I agree with the efforts of StartupVisa.ca crew even if I think their proposal is a little too simplistic to actually function and requires the support of policy and immigration wonks (of which I am neither). What can you do? Read the Open Letter Regarding Startup Visa Canada and if you agree endorse the petition.

    Endorse Startup Visa Canada Petition »

  • Reminder: DEMO + VentureBeat in Toronto on Jan 13

    DEMO Launchpad for Emerging Tech

    Rogers VenturesOur friends at Rogers Ventures are hosting a DEMO day with VentureBeat on January 13, 2011. This is part of a east coast swing that includes New York and Toronto. They are looking to finalize the presenting companies. If you are interested in being one (1) of the ten (10) companies make sure you apply to present.

    The great news is that even if you don’t/can’t pitch for the full day session there are still lots of opportunities. You can join the social happening at the Century Room on King St W starting at 7:30pm. You need to register to attend.

    It’s great that we’ve built a strong community of entrepreneurs, marketers, designers and developers in Toronto. It’s attracting world-class folks like Matt Marshall (@mmarshall) and Nate Werlin to brave the cold and snow (though still way less than NYC) and find great startups in Toronto. We even have DEMO alumni and DEMOgods like Scott Annan and Alec Saunders (though both are from Ottawa, hmmmm). It’s got me thinking we need to host another DemoCamp at some point in the near future. Stay tuned and I’ll see you on Jan 13th.

    Full details at VentureBeat.

  • A vendetta to get you up in the morning

    I always like to say that a little vendetta is healthy for a startup. A vendetta, or keeping frenemies as Mark Suster wrote, can be a positive way to differentiate yourself if you understand the bigger picture. It is risky as part of of a company culture, but when you believe in something enough you can use it to your advantage.

    Now, the term vendetta might be a little harsh at least by the letter of its definition. Perhaps frenemies is a little more more palatable.

    The best playbook on this is Marc Benioff’s Behind the Cloud and Mark covers the rest in his post (especially the advice: Do not actually think your competition is stupid), so I will only add:

    The bigger message has to be positive

    Mark Suster mentioned Marc Benioff in his post. If you dig in on how Marc has positioned Salesforce against the rest of the industry it can, on the surface, seem very confrontational. The truth is that every jab Marc takes seems significant because he draws momentum from his very positive and forward thinking vision for Cloud Computing/SaaS.

    Without that leadership then Marc might have been less endearing, but instead he gave more positive thinking and leadership than he did negative. That meant that when Salesforce did use negative tact (their logo is an example of negative messaging), then it was easy for the customer to understand where that negative message fits in to a larger picture. Without the bigger picture? It’s just negative.

    Know what you are not

    In my most recent startup we were stacked up against a handful of competitors during a “pitch day” to the executive of the customer. It was a “must win” deal for us but it was still a longshot because we were up against some well entrenched competitors who “owned” the industry. The truth is that we had harboured a quiet vendetta against these guys for ages and it drove us to understand their business as much as possible. “Competitive intelligence” was not something we did formally, but I realized at that moment that it had become a small hobby. We would research what the competition was doing, who they had doing it, and how their customers felt about it.

    The end result was that we knew exactly how to position ourselves to differentiate away from the rest of the competition. When the customer thought about the pitches they thought about us on one side and the competition as a cluster on the other. Our value vs. theirs was implied and we didn’t have to spell it out or waste valuable time in our pitch. We knew what they were and what we didn’t want to be. We just had to believe that it was how the customer felt as well.

    Don’t be a hater

    That is all to say: Don’t be a hater. Don’t make it personal. Don’t be vindictive. Love the game of it all.

    In the end: it is a game and if you don’t realize that you will be the first to run out of steam.

    This is all especially true in enterprise software where the customers (nee users) are actually being treated like crap by your competition. A little empathy goes a long way with them.

    A lot of people like to pretend they love their competition and talk a friendly game. That is fine, it is probably your best default position, but when the time comes to walk out of that corner and start landing punches then we all expect you to make them count. Your customers will respect it, your employees will respect it and more than any other: your competition will respect it.

    Just make it count.

  • Making 2011 a BIG year

    2011 is the year for us to find some winners and to make them explode on to the international scene. 2011 is the year for Canada to pull out of the pit and to hit the track hard. It is going to get a bit crazy and you have to decide for yourself whether that is a good thing or not.

    2011 is the year we capitalize on some of the hustle of the last 3 years and when we all focus on building some huge successes.

    For a lot of people 2011 is the year of winning big.

    Economic indicators continue to suck, but it doesn’t seem like anyone cares. Competition is heating up and everyone is ready for a good brawl. Year of gluttony. Present company excepted of course.

    Howard is going to Russia. As an EIR I have been practicing sitting back in my chair, putting my hands behind my head and saying “What’s your China strategy??” (that’s a joke BTW)

    The IPO market will not be back in 2011 though. Frankly, I don’t care.

    You are going to hear less editorial from us at StartupNorth in 2011 because we are going to be focused on the big wins. I am putting my money and time to work in startups that I think are going to KILL IT. Where are you focusing on 2011?

    2011 isn’t about kumbaya for me. It’s about making the best of a good time. We live in good times. I’m not throwing the baby out with the bathwater, but I want to see the baby put to work.

    This is the year to take your shot. Either exit or go big

    Opportunities in 2011 will be outsized compared to what we have seen and may be better than we will see again for another five years.

    The bears are all tired and the bulls will be back to buying. The “early exits” and “talent acquisitions” we have seen in the last 18 months will continue, but we will also be back to some really big opportunities.

    This is the year to take that leap.

    Whether you’ve been working on an OK business that needs scale, or you have a killer founding team ready to come together to attack a huge market, then this is the time to gather resources and to really focus on making it happen.

    Can you do it in Canada? Good teams are going to get funded. Good teams and big ideas. Before you start worrying about your idea, think about your team and how you are going to execute.

    This is the year to try that big idea.

    Whatever you are passionate about, 2011 is the year when people with big ideas will finally be listened to again. No more “that will never work” — it’s going to be optimism and opportunity. People are ready to listen to visionaries again and we need them. Whether it is social change, a new startup or a research project — this is your time to roll.

    If you have been sitting on the sidelines then it is time to get off your butt and make your move. Now or never.

    Losers will be lost

    For some reason people always think that it is the losers that win in “good times”. That’s a load of crap. Bad companies will always be bad companies. They aren’t going to get any further ahead in 2011.

    Focus is still the name of the game

    Smart entrepreneurs will not be focused on valuations they are going to be focused on working with winners, because the wannabes are going to be coming out of the woodwork. Smart VCs will double down on the markets that they know well. This is not the year to spread yourself thin looking for the next sexy deal, it’s the year to double down on deals you understand and that you can ride right to the end.

    Canadian funds need to avoid being used as “runway” in later stage US deals. DIG IN and focus on taking good opportunities from Seed to Exit. Making things is still worth more than buying things.

    I normally hate predictions, resolutions and anything “year end”, but this time I am too optimistic to hold it back. I am already waving goodbye to 2010 and as far as I am concerned it is 2011 already.

  • Why Canada? Habib Kairouz of Rho Ventures explains

  • 5 Thoughts on 5 Things I learned in 48 Hours

    5 Things I learned in 48 Hours – Techvibes.com.

    Some of my thoughts on some of his thoughts:

    #1 The Valley Feel- yes, it is true it does exist and it is unique to Silicon Valley.  That is not to say other areas don’t have a great innovation vibe, far from it! Some other areas have great innovation. But regardless where you are, it is good to stay on top of what is happening in the Valley.

    #2 The Valley Model- This I could take or leave. Yes, the Valley does have a unique VC-backed approach to innovation. But it isn’t the only way to fund and promote start-ups.

    #3- Think Small in Scope, and Large in Market- I love this idea. So true. Focus on what you want to do, do it super-amazing well, and then do what you do to conquer a huge (and growing) market.

    #4- You Can’t Phone It In- You really can’t. It takes work and preparation.

    #5- Be Yourself- Leave the impersonations to the comedians.

    #6- Start Local- I think this is the most interesting and ties in with points #1 and #2. Yes, be aware of what is happening in the Valley. Hell, be inspired by it, but don’t try to copy it (so I guess this ties in to point #5 also.) Find what is unique about your area and then build on that existing strength found, fund and grow your start-up.

  • Cognovision acquired by Intel

    UPDATE: We are hearing that the acquisition price tag is closer to $30m and possibly even higher. 


    Another great exit for the Toronto startup community and some great news in advance of CIX in a few weeks. Toronto based Cognovision has reportedly been acquired by intel. According to DailyDOOH, which covers the digital out of home market, the pricetag was $17m.

    Cognovision was the winner of the CIX pitch competition last year.

    I have to admit that when I first heard the Cognovision pitch, it felt holodeck cool. It also seemed “too good to be true” — Turns out I was wrong and the company shot to ~$1m in revenue pretty quickly. Using a camera on top of a digital display, Cognovision could give you some rough estimates that covered:

    • Actual Impressions – The number of people who look at your displays
    • Length of Impressions – How long people look for
    • Potential Audience Size – The number of people who walk by
    • Dwell Time – How long people stay near your displays
    • Anonymous Demographics – Demographics of your audience (gender and age bracket)

    Congrats to Shahzad, Haroon an the entire team.