Archive for March, 2007
Barcamp isn’t for the Geek-hearted !
I attended my first Barcamp this week. I didn’t quite know what to expect, particularly given the average reviews that the previous Montreal Barcamp got. As someone who really doesn’t not feel qualified or worthy enough to call myself a geek, I have been reflecting on why I enjoyed the event so much?
It has since struck me that Barcamp isn’t so much about technology as about comradeship. Some people who attend Barcamp want to feel that they have a purpose and talking to other people helps to validate that purpose. Others wants to share the pleasure and the pain of giving birth to something and see it grow. Some more want to give back to others that which they received when they were younger and braver (or rather more ignorant of the risks!).
Whatever the reason, the spirit of comradeship that was generated will certainly help to carry me and motivate me through the ups and down’s of my own start-up; at least until the next Barcamp !
Early Growth Funds
Posted by john in Uncategorized on March 31st, 2007
Over the past 12 months there has been a marked change in the way Venture Capital in Quebec is being managed. A number of the previously big players such as “the Caisse” and the “FTQ” have chosen to pull out of direct investment in start-up’s and now instead invest in professionally manged VC funds such as ID Capital, Brightspark and Garage Ventures.
The money flowing into these funds requires investing and once invested requires ongoing management by the Partners at these funds. The net result tends to be one where the average size of an investment increases – “au Quebec” in 2006 the average VC investment rose to $3.4M from 2005′s $2.1M. A longer term problem that can occur, particularly if Angel Investor activity is low, is that fewer new ideas and entrepreneurs are given the chance to grow – some evidence of this can be seen from the fact that almost 75% of Quebec investment in 2006 was made as a “follow-on” funding compared to 68% in 2005.
The VC’s are in somewhat or a lose-lose situation – they don’t have the resources to make many smaller investments – but if they don’t get new companies, entrepreneurs and ideas coming through then they are not going to have an opportunity to make many larger investments.
There have been some interesting initiatives in other parts of the world. I particularly like the Early Growth Funds that the UK Government launched and New Zealand’s Seed Co-Investment Fund. Both funds are manged by professional fund mangers and target businesses seeking between £50,000 ($NZ50,000) and £250,000 ($NZ250,000) of equity. Interestingly though, in both cases all investments must be made, on a 1:1 basis, alongside funds provided by Angel Investors.
Given the number of exciting ideas and capable individuals that are coming to the surface as a result of initiatives such as DemoCamp, BarCamp, Tech Breakfast etc. and the resulting demand for seed level funding, MSU is now working with local entrepreneurs, Angels, VC’s and government bodies to see whether this type of fund structure, along with support and advice from experienced Angel entrepreneurs, might be feasible in Montreal.
Entrepreneur Centric ?
Posted by john in Finance Dept on March 19th, 2007
I have been looking at the availability of seed capital for startup’s in Montreal. Although there is plenty of VC capital available at the $1-2M level, I could not find any funds available at the $50K to $250K level. This is typically the space in which Angel investors operator rather than VC’s, so I delved a bit more into available statistics for Angel investing.
The Canadian national average has Angels providing 6-9% of all Risk Capital. In Quebec in 2005 (the latest figures I could find) Angels only provided 2.5% of all Risk Capital! Are these statistics actually indicative of the real life situation?
Seed capital at this level is essential to the development of ideas and first time entrepreneurs.
In enclaves such as Silicon Valley, where there is a sizable pool of talent, an increase in seed capital leads to an increases in the pool of entrepreneurs and (in time) the number of successful companies and associated role models. In turn, these companies and role models further aide the motivation and education of a new wave of entrepreneurs that will need seed capital … a “virtuous circle”.
As Montreal’s tech entrepreneurs start to become more active (tech breakfast, barcamp, blogs etc) it is essential that they have access to Angel level funding. I’m going to start looking for it … let me know if anyone else know’s where it is !
A Cafeteria Breakfast !
I attended a Tech Entrepreneurs Breakfast yesterday. I met a number of interesting people with lots of energy and ideas; thank you Ben.
As Ben Yoskovitz, the originator of these breakfast, has said “(Cafeteria) doesn’t lend itself to moving around, sitting in different places and connecting with more people.” My experience with networking events is that the location is important, but perhaps more important is that there is a “structure” for the event that creates interaction between interested parties.
In trying to “pair-up” interested parties it is important to have a structure that quickly and simply identifies to everyone why a person is attending the event. If you know why someone is (and isn’t) attending you’ll have less “very nice to meet you, but I have limited time and I don’t really think that talking to you is the best use of my time today” type moments.
People who attend networking events are looking to gain something from attending. The same is obviously true for people attending the Tech Entrepenuers Breakfast, but in order for these events to evolve into something that helps produce results from the Montreal start-up scene, those attending must be willing to give as much as they gain.
So at the top of everyone’s list of why’s must be, “To contribute to the growth and success of the Montreal entrepreneurial scene”, because every time one of us wins we all have an increased chance of succeeding !
I have come up with what I belive is an original (not) and appropriate motto that those attending Montreal network events should consider.
It is not what Montreal’s entrepreneurs can do for you, but what can you do for Montreal’s Entrepreneurs !
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