Author Archive

Most-Read Stories About Funding for Canadian Startups

Monday, May 16th, 2016

One year has made a big difference in terms of funding for tech startups as unicorn worship has given way to cockroach austerity. While tech ecosystems don’t seem to be heading for a collapse along the lines of 2000, the money isn’t flowing like it was in mid-2015.

Funding for U.S. startups in this year’s first quarter fell 25 percent from the fourth quarter of 2015 to $13.9 billion, the largest quarterly decline on record since the dot-com bust, according to (warning: paywall) data from Dow Jones VentureSource. The numbers of Q1 deals hit a four-year low of 884.

Also in the first quarter, the median value of U.S. startups plummeted to $18.5 million after hitting a peak of $61.5 million in last year’s third quarter, according to the same report. Comparable data aren’t available for Canada, but the trend is clear.

techPortfolio_Fact_May_15

Still, the weak patch doesn’t mean the well has gone dry. Here are some of the most-read stories of the past month about funding for Canadian startups:

Vancouver’s Bench Raises $20 Million Series B Round

You might well use Bench for in your own organization, so this is good news for the future. Ian Crosby, CEO of Bench, says that the Series B funding will remove constraints and allow them to “undergo rapid employee growth.”

Thirdshelf Moves Out Of Stealth Mode After Raising $800,000, partnering with Lightspeed

Meanwhile, you’ve probably already used ThirdShelf without realizing it. ThirdShelf’s USP is that they allow independent retailers to retain their own customer data, rather than making them partner or share their lists. If you want a glimpse of the future of the checkout line, the article also talks about ThirdShelf’s work with developing bots that can gauge how and when to engage each customer.

With New Seed Funding, Hockeystick Looks To Compete With CB Insights For Startup Data

More than just the latest contender for ‘most Canadian startup name ever’, Hockeystick helps link startups with their investors, enabling a free flow of financial data. This interview with Raymond Luk, the company’s founder, shows how startups need to get over with their hesitance to share, and the advantage Hockeystick has over competitors that rely on surveys alone.

24 Canadian Startups Raised $152 Million in April

Lastly, here’s a list of hard data. Startups from Vancouver to the Maritimes (that’s PEI and Fredericton in there) are pulling in a good deal of angel and venture capital. Topping the list is Etobicoke-based Flipp at $61 million, who create digital versions of flyers and in their well-rated app.

Mind the Startup Leadership Team Gap, Investors Say

Monday, May 16th, 2016

Startup entrepreneurs know going it alone is seldom a good idea. But a senior “team” with only one kind of speciality – be it engineering or product development – can be equally as difficult.

Sonia Strimban, manager of venture operations at Toronto’s MaRS Discovery District – an accelerator, said one of her first interventions when a company joins is to make sure the right blend of leadership is at the top.

techPortfolio_Quote_May_15

“You absolutely need a team,” Strimban says. “Nobody is going to give you money for an overdeveloped product without a business model.”

Strimban adds that it’s important to plan your leadership team for growth at different stages.

“At series A, typically, we see the most benefit in an executive in sales and marketing. If you’re not selling and you can’t accelerate growth, you’re pretty much toast. [You need] somebody who has revenue growth capability.”

This is particularly true now that VCs have pivoted away from startup unicorns in favor of the unstoppable cockroach.

Other investors concur about the risks inherent in single-person or unbalanced startups.

David Cohen, a co-founder and managing partner at Techstars Ventures, said in a 2007 blog post that he won’t rule out sole entrepreneurs, but holds them at a disadvantage. “Look for someone who compliments your skills,” Cohen said. “If you’re great at coding, find someone who’s great at selling or marketing.”

Cohen’s investment instincts proved astute as Techstars became an early investor in Uber just two years later.

Location is a Factor

Location can also often become a factor in finding the right senior team lineup.

“The U.S. definitely has many layers of experience of people in robust urban areas,” explains Gregory Melchior, Founder/CEO of startup 4D Virtual Space.

Some areas such as Greater Boston or Silicon Valley have a wider spread of skills at founder level. “There seems to be a correlation between the top universities – institutions have a ripple effect – that allows for a robust labour force.” Melchior adds.

However, finding co-leadership you can trust is now almost as easy as swiping right. Sites such as FounderDating aim to bridge the leadership gap by connecting leaders with different and complementary skills.

And true to their word, these platforms screen applicants so their base doesn’t get top-heavy with engineers.