Posts Tagged: canada

Funding goes global: location is no longer your financing destiny

If we look back ten years, the venture world was quite different. Investors weren’t too keen on investing out of town. And given the fact that the majority of top investors were congregated around Silicon Valley, many entrepreneurs felt compelled to move to the valley to start their business. It was much harder for a “remote” company in the Mid West, Europe, or Canada to draw any attention to themselves.

A recent interview with Union Square VenturesAlbert Wenger reminded me how much things have changed in the past years:

 I’m less interested in the regional differences than I am in the fact that it’s now possible to build very large, global businesses from anywhere in the world…The Internet is global. Geography is no longer the destiny it used to be.

And what is true for start-ups is also true for venture capital firms. The Internet has disrupted traditional geographic barriers for venture capital in the same way and world-class investors are emerging outside of Silicon Valley.

Look global and local

What does this new dynamic mean for today’s start-up seeking funding? In short, you’re going to want to look for the best funding partner (or collection of partners) possible, rather than just focusing locally.

Many firms have developed specific areas of focus and these type of investors can be extremely helpful in strategic matters. For example, NYC-based Union Square Ventures has built up the most experience around “large networks of engaged users”; Berlin-based Point Nine Capital is one of the strongest early-stage SaaS investors; and version one ventures probably has more marketplace investments than most seed funds.

Thesis-driven investors, like USV or version one, can be instrumental in helping you navigate questions like product roadmap or fundraising because they work with similar start-ups in your space and really understand the area.

Likewise, local investors are usually better positioned to provide more hands-on help. One of the biggest advantages here is in hiring: you can pull from their local network and local investors can even interview key hires in person. At the end of the day, you’ll want to find the best partner(s) that meets your specific needs and situation. In some cases, this is local; in others, it’s a remote expert; or a mix of both.

One final word of caution: if you’re going to go with out-of-town investors, you’ll want to see that they have already made investments outside of their own location, so you know they can communicate and operate well virtually (and are willing to travel to their portfolio companies). In other words, you don’t want to be the trial run for a remote investment.

N.B.: AngelList is a great way to identify investors that might be a good fit for you but it is probably not yet the best way to pitch and close them. Getting warm introduction from a trusted source still has a much higher likelyhood for conversion that simply sending messages on AngelList.

 

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Mission accomplished: Startup Visa Canada is here

 

Mircea Pa?oi and Cristian Strat, founders of S...

Mircea Pa?oi and Cristian Strat, founders of Summify (Photo credit: Wikipedia)

Two years ago, Danny Robinson, Maura Rodgers and myself started to lobby for a Startup Visa Canada that would make it easier for foreign (tech) entrepreneurs to start their company in Canada.  The initiative was inspired by the immigration struggles of the talented Summify team.

In 2010, Cristian and Mircea arrived in Vancouver from Romania to start a new company. This talented pair had a big idea, strong endorsements, and venture-capital backing from top tier investors like Accel. However, rather than focusing on their startup, they faced a frustrating collection of bureaucratic red tape and immigration status uncertainty. We were hardly extending a friendly invitation to these talented entrepreneurs.

So I was extremely pleased about the opportunity to attend the public launch of Startup Visa Canada in Toronto by Minister Jason Kenney today. The general idea behind Startup Visa is that foreign entrepreneurs get fast-tracked for immigration if they have an investment commitment from a Canadian venture capital firm or angel investor.

This program is sure to raise Canada’s profile within the global technology community, sending a signal to the best and brightest that we’re open for business. In addition, Startup Visa will create good Canadian jobs.

This success was only possible because of the support of many people – from the whole Startup Visa Canada team to countless individuals and organizations including the CVCA, who is an official partner in the new government initiative.

Startup ecosystems are competing globally for the best and brightest people – I am excited that the Canadian ecosystems are now in a much better position to attract the next generation of tech entrepreneurs to this country.

 

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Breaking into the Valley? Use the “Canadian mafia”

Canadian flag outside the Maritime Museum of t...

(Photo credit: Wikipedia)

There is a PayPal mafia, a Facebook mafia and a Twitter mafia, all powerful networks of entrepreneurs and investors based in the Valley. And now there is a really strong “Canadian mafia” emerging. It started to formalize with the launch of the C100 a few years ago. The organization is comprised of a select group of mostly Silicon Valley-based Canadian entrepreneurs, technology executives and VC’s and has launched some amazing programs like “48 Hours in the Valley” or the “Canada CEO tech summit“. But even more importantly, the Canadian angle is starting to open doors in all sorts of places.

I spent the past month in the Bay Area and found that one of the most successful ways to get into a specific organization is to find out if there is any Canadian connection. And interestingly enough, there are Canadians (or people with a connection to Canada) sitting almost everywhere. You can find them in the big Internet companies like Google, Apple or Facebook; you can find them in major tech blogs and among conference organizers; you can find them among VC’s or super-angels. And Canadians are actually starting to talk about a Canadian mafia and feeling proud about being part of this emerging community.

So the next time you are trying to get that important meeting, try the Canadian angle – it might be the most powerful way to break into the Valley.

 

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An amazing year

2011 was an amazing year – made 10 new investments (most ever!), sold one company (Sparkbuy to Google) and started GrowLab with an exceptional team of co-founders.

But more importantly, it was an amazing year for Canada’s start-up ecosystem – there is a new generation of angels and VC’s emerging in this country, more and more US VC’s are leading large financings rounds in Canadian start-ups, local start-ups are nailing it in SaaS, a few wordclass incubators have sprung up, organizations like the C100 are starting to make a real impact, and we have had a very healthy M&A activity this past year. What we still don’t have – and are probably many years away – are enough anchor companies.

2012 will most likely be a much tougher year for start-ups worldwide. We might have seen the end of the easy access to early-stage money and a recession might be around the corner in Europe and North-America. But despite these short-term challenges, I remain extremely bullish on the opportunities for Internet companies. We are still only at the very beginning of the Internet cycle so keep your heads down, focus on your long-term vision, build product, listen to your customers – and build those missing anchor companies!

Happy holidays to all of you and to an even better 2012!

 

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New investment: Unbounce, A/B testing made super-easy

Image representing Unbounce as depicted in Cru...

Image via CrunchBase

Unbounce makes building, publishing and A/B testing of landing pages super-easy. It does not require any IT involvement and puts the marketer into the driver seat. This makes the product so successful and is the basic SaaS value proposition: let the user be the buyer and offer him a risk-free monthly subscription plan.

I have watched the team over the years bootstrapping their business – heads-down building product, listening to customers and building a great reputation in the marketplace. Now they felt it was the right time to raise money to scale the business even faster and they assembled a top notch group of investors led by Mark MacLeod from Real Ventures.

I really hope that many other start-ups look at Unbounce as a role model for their focus on solving a real problem, understanding customer needs and building a great product. Congrats, Unbounce team, well done – excited to be aboard!

P.S.: Funding announcement happened 2 weeks ago but only got around to blogging about it now.

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