StartupNorth

  • Calgary's first BarCamp a hit, startup focused

    2112453857_f4859c284a_m.jpgCalgary had its first BarCamp this past week and by all accounts it was a hit. Patrick Lor has the best recap of the day. What struck me was how startup-focused this BarCamp seemed to be. Perhaps that is just how things seem when you only listen to entrepreneurs, but the day involved a “Startup Hacks” session and 2 talks by Guy Kawasaki.

    Guy had the crowd vote on which of his talks they wanted him to do:

    The crowd gave him a resounding yes, and split their vote between a talk on innovation, and “how to start a web 2.0 business with $12,700”. So, he did both. It was twice the work for him, but he tells me he really enjoyed presenting this Calgary crowd.

    It is great that someone like Kawasaki was able to attend the first BarCamp for Calgary, that is such a great way to kick off the movement there. Some love him, some hate him, either way: He has a high profile and I am sure he got the crowd excited.

    I would love to see a StartupCamp take place there. I am mildly obsessed with what is going on in Alberta, the whole thing fascinates me and the opportunities for startups in tech and outside of tech are huge. I think I will just hop on a plane next time there is an event and start meeting some of Calgary’s entrepreneurs. Keep it up!

  • WirelessNorth.ca – Canadian Wireless News and Opinion

    I thought I would remind everyone that wirelessnorth.ca is now alive and you will soon start seeing updates and information on Canada’s emerging wireless industry (some terms used lightly!).

    The approach with WirelessNorth will be the same that we have used to grow StartupNorth: Slowly but surely. We have tried to bring you high quality fact/news/opinion here as regularly as possible, and you have all responded by commenting, emailing and just talking about what we are up to.

    The guys at WirelessNorth will be doing the same. So head over, subscribe to the RSS feed and start digging in. Wireless in Canada is possibly going to change more quickly in the next 18-24 months than any other industry, and wirelessnorth.ca will be the best place to stay on top of it all.

  • CommunityLend Raises $2.5M

    Community LendSocial lending is coming to Canada. Founded more than a year ago by Michael Garrity and Colin Henderson and following the successful model of Zopa in the UK and Prosper in the U.S., CommunityLend will be launching a P2P lending service in Canada.

    P2P lending works like this. Borrowers provide their details to CommunityLend, including a public profile and reason for the loan. CommunityLend performs a credit check on the borrowers and then posts the borrower’s story, profile and credit rating to a community of prospective lenders/investors in an eBay-like interface. Investors then bid on pieces of the loan (each loan is typically divided up among many lenders which mitigates everyone’s risk). After the bidding process the loan is then issued at the minimum rate required to satisfy enough lenders to fund the full amount.

    The company will be offering, at first, one standard type of loan – 3 years, fixed rates to a maximum of 25k. Judging by other services like Prosper.com, social lending seems to fill a gap in the product offering of a traditional bank. Rates are typically in the 10-18% range, which fits above bank rates for unsecured lines of credit and below that of high interest credit cards. CommunityLend makes money by charging a small spread to both the borrower and the lender.

    With the current “sub-prime” troubles in global credit markets, the timing may be perfect for CommunityLend. Banks in Canada and the US have been tightening their credit policies making borrowing more difficult, especially for marginal creditors. The transparent, market-based P2P model may well prove to be a solution than can judge and price loans in this segment better than the big institutions.

    In addition to the funding announcement (of mostly non-Canadian investment dollars btw), CommunityLend is also announcing a new slate of directors including Barry Campbell, former MP and Secretary to the Minister of Finance and Jim Jones CEO of GMAC Residential Capital [100B lending portfolio].

    Congratulations to the team for reaching this milestone. We look forward to providing a more thorough review of the lending service once it goes live (we’re told early to mid next year).

    For the time being you can get more info at the company’s newly launched website: CommunityLend.com.

  • StartupCamp Waterloo – February 26, 2008

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    StartupCamp Waterloo is set for February 26th, 2008 at the Accelerator Center in Waterloo. They are sticking to the original format, which is the DemoCamp style pitch and feedback setup.

    Signups for StartupCamp Waterloo are being handled here on the wiki. I think it would be great to see some out of town startups coming out to support what is going on in Waterloo. There is a great group of people in Waterloo who are working hard to build a startup community there. Mic Berman, Jesse Rogers and Simon Woodside organized the first StartupCamp there a few month ago and have come out to a few Toronto events.

    Looking forward to seeing everyone there!

  • Blognation Shuts Down

    Blognation finally folded today. I have no idea which side of the story is true and which parts are false, but it doesn’t really matter. I won’t link back to all the posts, there would be too many to go back and find.

    Tris Hussey has been blogging at ca.blognation.com since April (I believe — I can’t seem to tell from the site). Tris has done a fantastic job of covering Canadian tech startups and has given us especially great coverage of West Coast startups. He has also scooped us on a few great stories.

    I am bummed that Tris won’t be blogging about Canadian startups for the next while at least. Canada is losing out on this one, for now at least. It was the editors/writers of Blognation who got the worst end of the deal.

    Tris has posted that he is looking for full time work, specifically as a community manager. I have heard from a few companies recently that are looking to hire someone in the same type of position, so I am pretty sure that it won’t take long for Tris to land on his feet, considering his depth of experience in building communities and in the blogging tools space.

  • StartupCamp Montreal – January 23 2008

    Update: Wow! All of the first-release tickets (except for Service Providers, who can still get tickets) are now sold out! It looks like the Montreal event is going to be a huge hit.

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    StartupCamp Montreal was announced at StartupCamp Toronto, and it is set for January 23rd at the SAT – Société des arts technologiques. The format will be similar to the Toronto and Waterloo events, but not exactly the same. Startups will have 10 minutes to present, and there will only be 5 minutes of questions (not 15 minutes of skewering this time!).

    Montreal is a wonderful city, and some of the best startups in Canada are calling it home these days. Both CakeMail and Defensio were well received in Toronto and I am hoping that we will see some startups from Toronto and Ottawa on the slate for Montreal.

    I just got an email from Philippe and he let me know that you can get more information on the web site and a first release of tickets is now available. The first batch are now up for grabs at startupcampmontreal.eventbrite.com, get one while you can!

  • Homestars.com – Reviews of Home Improvement Companies

    homestars.pngHomestars.com is a publicly accessible reviews site that does not require any registration in order to read reviews. Posting reviews requires an account. Homestars is focused solely on the “home improvement companies and resources for homeowners” niche.

    Homestars’ focus on a single vertical is smart and they are executing on it well. The most specific advantage of this approach is that selling targeted advertising at a premium will be much easier for HomeStars, who have very specifically motivated users in the home improvement space. These people are ready and willing to spend money, and if HomeStars can get them to the site, there is no doubt that advertisers will be ready to pay.

    Perhaps it is a result of the narrow focus of the site, but the user interface is very easy to navigate and it is a lot of fun to just dive in and start (as I did) looking for pissed off people skewering their plumber or driveway repairman. As you dive in you will notice “Sponsored Ads” on some pages. If you look up a review for Plumber Bob, who seems like an honest and hardworking guy, you will see that Canada Wide Plumbing & Mechanical Services Inc. have a “sponsored” ad on Plumber Bobs page. To get one of the premium spots, and to add pictures and a few other things to your own page, you pay a monthly fee of $80. These premium spots make up the bulk of HomStars’ revenue.

    Because people often want a review of something as specific as a Plumber or a Roofer only intermittently, I think HomeStars have done the right thing in making the site as public as possible. Home Rennovations is a niche that has been overlooked so far and unlike books, music, travel, or cars, it has been hard to get decent local reviews of these services.

    hsreviews.pngHomestars have also recently done a deal to provide their review data to another Toronto based startup: ZipLocal.com, who, as we have mentioned before, appear to be treading water and perhaps are hoping that bringing in more high-quality review content will generate some additional traffic. I think HomeStars has to be careful about licensing their reviews outside of Homestars.com; I am not sure that when a user enters a review on HomeStars the user expects it to be syndicated.

    The most glaring problem for HomeStars is accountability. As far as I can tell there is no way to see what other reviews a particular user has posted, so it is hard to know if a review is just a one-off from someone, or if they are an established and helpful reviewer. I think HomeStars will need some sort of scoring system that gets applied to the individual reviewers, based on their participation. Otherwise, HomeStars risks filling up with spam reviews.

  • homestars, gigpark – Reviews of stuff

    Toronto is currently in the throws of labour, giving birth to two distinct but potentially competitive review services.

    Homestars.com and Gigpark are both, at their core, places to post reviews. In the case of Homestars, their current focus is on home renovators and service providers (an industry that needs to have some accountability injected in to it!). Gigpark, is more generalist in its approach, but layers a social network on as the main hook. The idea being that you will trust reviews from people you know more than you will trust reviews from just anyone.

    I think both approaches have a few strengths and a few glaring weaknesses. First up for review is HomeStars.com, and we will take a look at GigPark later on.

  • Extreme Ventures – Early Stage Venture Capital

    amarsun.jpgWe promised you a surprise at StartupCamp Toronto, and we did our best to deliver. At the end of the night, we asked Sundeep and Amar from Extreme Venture Partners to come up, tell us about themselves, and take some questions from the room. Extreme VP is a new venture fund based in Toronto, and this was their coming out so to speak.

    Jumping in to the startup scene here and telling everyone you are a couple of freshly minted VCs can’t be easy to do. I was excited to introduce the guys because I am one of many who believe that venture capital has to change in Canada. I don’t pretend to have all the answers about where venture capital is going or where it should be going, but if a new venture fund is going to try and do things differently, I am on their side.

    When I first got an email from Sundeep and Amar I was intrigued, excited and a little pessimistic. My guess is that those are the exact same feelings that most people in the room had at StartupCamp. The fact is that a large number of startups in Canada are going to need some sort of capital, whether it is early stage, acceleration capital or expansion capital later on. As Albert Lai said when he kicked off with his keynote: finding early stage and acceleration capital in Canada can be painful, if not impossible.

    Amar (on the left in the above photo) is an engineering grad from Waterloo who has spent the last 5 years working as a VC here in Toronto. He has worked on something in the area of 40 transactions in that time, and has learned a lot about “traditional” VC it seems. Sundeep has some notches on his belt, having founded and sold a few successful startups over the last few years while living in San Francisco.

    Sundeep and Amar have not raised a huge fund by any stretch. At $10 million, they aren’t taking a management fee out of the fund, nor can they afford to throw money at unrealistic startups. What they plan to do is invest early in good ideas and provide up to $1 million in funding over the life of a company.

    There are a few things that I think sets Extreme VP apart from other Canadian VCs: They can do deals as small as $25,000, they try to complete a deal within 1 month if it is a ‘yes’, they are probably more tuned in to what is going on right now with web startups than most other VCs, and they have a good set of connections that they can use to help the companies that they fund.

    One thing that has impressed me so far is that they are also accessible. Even before they officially ‘launched’ their fund, I saw them out at democamps, pub nights, and breakfasts where I could not find another VC if I tried. To me, that says something. The other thing is that these guys are actually doing some deals. In a short period of time they have funded something in the range of 3 startups and I believe they have more that are looking good.

    What do I hope Sundeep and Amar accomplish? Disruption. I hope they are a wake up call to many of the VCs in Canada who have taken their deal flow for granted. By being accessible at the grassroots level, Extreme VP will see valuable deals before they land on the desks of the more established VCs. Some of them may have to hit the ground and start looking for good deals before they get picked up by the new guys in town.

    Contact: Sundeep & Amar, Extreme Venture Partners

  • Angel financing – What angels look for in a company: Financials and exit strategy (part 5 of 6)

    After providing details on management, you have hopefully given investors confidence in your team’s ability to deliver on the company’s vision. Now it is time to turn to the financial aspects of the company and investment opportunity. In presenting your company’s financials, you want to give investors an idea of the company’s revenue/profit potential. The usual way to do this is to show a summarized income statement. You would want to show a projection of the company’s revenue and income for 3-5 years into the future. If your company has been in operation for prior years, you would also want to show the actual results for revenue/income for these years. As any future predictions of revenue/income are going to be very speculative for an early stage company, the methodology you have used in building up the projections will be more important than the actual numbers themselves.

    In a previous article we spoke about market size and revenue potential. You would pull in your revenue numbers you came up with to show how the company’s revenue will grow as you build your company. Just as you did a bottom up exercise to determine your revenue numbers, you would want to do a similar exercise to determine expense items. Against revenue you would want to identify your variable and fixed costs. Variable costs are any costs that are directly proportional to a unit of your product that is sold (i.e. cost to manufacture the product, credit card processing costs, etc). Fixed costs are more tied to the overall growth and size of your company (i.e. management salaries, rent, legal fees, insurance, etc). In your investment presentation you will want to show your income statement on an annual basis with separate lines for each major revenue or expense items. Typically you would show your revenue minus operating expenses to come up with EBITDA. EBITDA provides a picture of the earning potential of a company based on operations.

    Investors will look your financials to try understand things such as:

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