Venture Capital

You’ve Raised Venture Capital, Now What?

By Mark Evans in Startups, Venture Capital No Comments Tags: , , ,

For many startup entrepreneurs, raising their first venture capital round is like winning the Super Bowl. It validates what they’re doing, their vision and all the hard work that’s happened. When the deal is signed, there are lots of high fives and the champagne flows. It’s good times, baby!

The funny thing is you wake in the morning with a whack of cash in the bank, and realize the work has just started. For all the effort that happened pre-deal, there’s even more work ahead post-deal because there’s another party (or parties) who have a vested and financial interest in how you operate the business.

For some entrepreneurs, it can be an abrupt wake up call. Suddenly, there are board meetings, regular updates to be filed, plenty of questions, and performance reviews. If you thought there was pressure before, it’ll come in waves now.

At the same time, entrepreneurs also need to get their head around the money. While it is being invested to grow the business, it will eventually run out, even if it does seem like a large amount at the beginning. I worked with an entrepreneur who seemed to think the money would last forever and, as a result, start spending it on products and services that weren’t a priority.

Here’s funny thing about raising your first round of venture capital: investors are happy to give it to you, and they’re happy to see you spend it.

Why? It’s because they know it’s likely you’ll to come back for more if the business shows traction. While there may be more suitors but your initial investors will more likely be involved and be assertive in making sure the deal rewards their initial investment.

The bottom line is raising startup capital is a terribly exciting and rewarding experience, particularly given it is like winning a lottery ticket in many ways. At the same time, it’s the end of one stage and the start of another with just as many challenges and demands.

More: For another angle on raising capital, Mark MacLeod has a good post looking at burn rates versus runway.

Snapshot of a VC Deal: Clio Raises $6-million

By Mark Evans in Social Media, Startups, Venture Capital No Comments Tags: , ,

Who: Vancouver-based Clio, which offers cloud-based management tools for the legal industry.

How much: $6-million in a deal led by Acton Capital Partners, a Munich-based growth equity investor, as well as existing investors, including Berlin-based Point Nine Capital, an early stage investor.

The Quote: “The legal space is ripe for disruption,” Boris Wertz, Acton’s Vancouver-based venture partner and a member of Clio’s board of directors, said in a press release. “Although this industry has traditionally been regarded as slow to adopt technological changes, recent investments show it’s now ready to benefit from technological innovations like cloud computing.”

Snapshot of a VC Deal: IGLOO Raises $5-Million

By Mark Evans in Software, Venture Capital No Comments Tags: , ,

Who: Kitchener-based IGLOO Software, which sells social business software

How much: $5-million from RBC Venture Partners and Ontario Emerging Technologies Fund. In 2008, IGLOO raised US$4-million from RBC Venture.

The Quote: “Social networking for business has reached a watershed moment, with most companies either actively using or evaluating social technologies,” said David Unsworth, board member and partner with RBC Venture Partners. “As a pure cloud solution that supports both internal and external collaboration, IGLOO is uniquely positioned to not only enable companies to get up and running quickly, but also scale their efforts as their social strategy matures.”

Financing News: QuickMobile Raises $2.3M

By Mark Evans in Venture Capital No Comments Tags: , ,

Company: QuickMobile
Headquarters: Vancouver
Product/Service: Develops mobile apps for conferences and special events. Its clients include the World Economic Forum, Disney, Microsoft, Salesforce.com, Dell, Hilton Worldwide, Accenture, the Sundance Film Festival, and the San Francisco Film Festival.
Investment: $2.3-million – a combination of debt and equity from angel investors. The round includes VanCity, Canada’s largest credit union. (Press release)
Quote: “We have seen exponential growth over the last year as meeting planners have moved away from traditional print-­?based media and adopted our mobile conference app to fully leverage the ubiquity and interactive capabilities of mobile devices”
- QuickMobile CEO Patrick Payne

 

Bloggers: A Key Part of Startup/VC Ecosystem

By Mark Evans in Startups, Venture Capital No Comments Tags: , , ,

As a long-time blogger and someone who does a lot of consulting work with startups, David Crow’s post “Where the Canadian VC Bloggers?” obviously struck a chord for a variety of reasons.

In thinking about David’s post, one thing that came to mind is how bloggers need to be a key part of the Canadian startup and venture capital ecosystem. The apparent lack of Canadian bloggers writing about the venture capital business and the growing number of financing deals puts the spotlight on the fact there may be a gap in the overall ecosystem that needs to filled.

While blogging certainly isn’t sexy any more, bloggers do play an important role in talking about what’s happening, the key trends, the movers and shakers, and putting the spotlight on the leading startups.

It is an important job because, frankly, newspapers do, at best, a mediocre job of covering the venture capital and startup sectors. One of the problems and challenges is most of the Canadian VC deals are not that big, which makes it hard to warrant newspaper coverage. As well, the venture capital sector has been so dismal in recent years that there isn’t a lot to write about, although there are signs of encouragement.

Given the lay of the land, this is where bloggers can step into the fray by supporting the VC and startup ecosystem. This is not to suggest the coverage must be fawning. Instead, there is a need to have strong, vibrant and objective coverage of the VCs, startups and entrepreneurs who are succeeding and failing.

In this way, bloggers can play as key a role as VCs, startups and entrepreneurs in creating a healthy ecosystem that is firing on all cylinders.

One final thought: In no way, am I criticizing or disparaging the bloggers who do write about VCs and startups. Blogs such as StartupNorth and StartupCFO do a great job of providing insight and information. All I’m saying is that, in this case, more is better.

Is Canada in the Midst of a Startup Renaissance?

By Mark Evans in Venture Capital 3 Comments Tags: , ,

CanadaIf you’re looking for signs that Canada’s startup landscape is healthier than ever, a prime piece of evidence might be the International Startup Festival taking place this week in Montreal.

Putting aside the ambitious name (I would have selected something like the Canadian Startup Festival), the fact it was organized and looks to be well attended suggests there might just be some real traction within the startup community.

For too long, the landscape has been dominated a supply and demand problem – lots of enthusiastic entrepreneurs chasing too little capital. It meant there was a lot of talk but not a lot of walk because without financing, it is difficult to develop an idea and drive growth.

A few key things have changed in the past year or so.

First, I sense entrepreneurs are more sophisticated, experienced and creative about how they start, operate and finance a new business. We’re talking about people who have been in the startup trenches, and now starting to see the benefits of having toiled away, even if their efforts have not been successful.

Second, there has been a surge in the amount of seed and startup capital available. It’s far from a financing tsunami but it’s a solid start. It means (hopefully!) entrepreneurs can get the money they need to take a real shot at building something. It doesn’t have to be millions of dollars, although it would nice it that kind of dough-ray-me were available. Many entrepreneurs can go a long way with $100,000 to $250,000 using a lean and mean approach.

Third, we’re starting to see exits; nothing spectacular but acquisitions nonetheless. The recent hit list includes Pushlife (by Google), Tungle (RIM), PostRank (Google) and Five Mobile (Zynga).

What’s more encouraging is if you scratch beneath the surface, there’s an awful lot of going on. In my consulting business, I’m doing a lot of work with startups and, as important, coming across a lot of startups during my travels. We’re talking about companies with great ideas working away in relative anonymity until the time comes for some of them break out.

All in all, call me optimistic that Canada’s startup community is starting to see some serious traction after too many years of struggling. Before anyone gets too excited, there is a lot more that can be done but at least we’re getting there.

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