Category: investment

16
Apr

A List of Corporate Governance Resource for Startups

This post was originally published on the Hockeystick.co blog on April 15, 2013 http://blog.hockeystick.co/2013/03/20/governance-for-startups/

To kick off the Hockeystick.co blog, we’ve compiled a list of resources about corporate governance and investor relations for startups. Unsurprisingly, most governance research is focused on large, public companies. But there are some good resources for startups.

Here’s the list so far:

Can you recommend other startup governance resources we should add to the list?

 

13
Dec

Year One Labs grad Localmind acquired by AirBnB

 

Question: Was Localmind acquired by AirBnB?

Answer: You bet!

I’m very proud to announce (or at least point to the TechCrunch article) the acquisition of Localmind by AirBnB.

Localmind was one of the first investments we made at Year One Labs, the accelerator I co-founded with Ben Yoskovitz, Alistair Croll and Ian Rae

. Investors love exits but accelerator exits feel even more gratifying because you’ve seen the company when it’s just an idea, or just the hope that a few smart people would find a great idea.

Anyone who’s met Lenny or Beau knows they can be summed up in two words: hustle, and so-damn-nice-you’d-swear-they-were-Canadian!

I can’t wait to bet on whatever they do next.

Raymond

04
Aug

New unbiased blog about Canada’s SRED tax credit program

There are no good sources of intelligent information about Canada’s SRED tax credit program. Besides Revenue Canada’s own Web site on the topic, most information is biased (in favour of consultants), inaccurate, poorly-written and not that useful for business owners and managers.

SREDFacts (www.sredfacts.com)is a new blog that delves into all aspects of SRED, from determining eligibility to claiming expenses to living through an audit. It’s a useful blog for startups, technology companies and anyone else interested in learning more about this tricky program.

04
Aug

Ontario Emerging Technologies Fund: Good for Investment, Not Good for Angels

The Ontario Emerging Technologies Fund

was unveiled last week and I know investors across the country have been anxiously awaiting the details. Here’s the skinny:

  • $250 million fund size
  • Matches investments for qualified investors (more on that later)
  • Invests in Ontario companies
  • Sectoral targets: clean technology, life sciences and advanced health technologies, and digital media and information and communications technology sectors

Most Angels I talked to previously were wondering what the qualification process would be and whether the fund would discriminate against out-of-province investors.

Now that the details (at least version 1.0) have been released, I can say that there’s good news and bad news.

The good news is that, over five years, $250 million will be flowing to early stage tech ventures in Ontario. This is nothing to sneeze at and a much-needed shot in the arm for Ontario entrepreneurs. Will this encourage new investments? Absolutely, especially in clean tech and life sciences where capital needs are greater.

But several aspects of the fund are not great for Angels and other seed-stage investors, especially in ICT or even the earliest stages of clean tech and life sciences.

Investment Round Must Be $1 Million or More(p. 10, Fund Guidelines, link to PDF

)

According to the Kauffman Foundation (Appendix to Returns to Angels Investors in Groups) the average Angel investment is less than $200,000. This is consistent with what I’ve seen in Canada. Many Angel groups and seed funds invest in this range. So why the $1million threshold?

If this is a conscious choice by the OETF to favour later stage deals, they may actually draw Angel dollars away from pure startups and towards later-stage entitities. This would be a bad thing for growing the number of startups in Ontario.

If this is a subtle encouragement to Angels to invest more dollars, it ignores the fact that many (I’d say most) pure startups don’t need $1 million. I would personally never invest in a startup whose capital needs from day one were in this range. It’s not exactly “lean”.

Angels Must Re-Apply for Qualification for Each Investment (p. 7, Fund Guidelines, link to PDF)

Venture funds can apply for qualification once and have this remain in place for all future investments. Angels, on the other hand, must re-apply for each investment they make. I’m going to give the OETF the benefit of the doubt and assume that getting qualified once will mean getting qualified again. But this doesn’t exactly reward Angels or Angel groups who have a proven track record. Why not treat them the same as VCs?

Ontario Footprint

OETF is not the only fund tied to a specific geographical region so this is not a new complaint. But it still bothers me to see penalties for a company no longer having “enough” of an Ontario footprint:

  • OETF has the right to force repurchase of its shares at a price set by a 3rd party, or
  • OETF has the right to force refund of its investment + 10% compounded annually

As an investor, I prefer the highest return on my investment no matter where the company needs to grow. These kinds of terms discourage investment from outside the province and outside Canada.

Favouring Ontario-Based Investors

Finally, there are some silly questions in the Angel application about proving that you are dedicated to investing in Ontario. Presumably, this doesn’t apply to Angels who live in Ontario. This is counter-productive. It’s better for Ontario to draw in investment dollars from outside the province. And why do I have to prove that I want to invest in Ontario when I’m already showing that by applying to invest in a specific deal?

The not-invented-hear syndrome is not good for startups and it’s not good for regional investment.

Conclusion

I applaud the Ontario Government for taking steps to encourage early-stage investments in the province. It’s difficult for governments to truly take a back seat to private investors when it comes to investments and the OETF is a good example of this struggle. It’s not really the matching investment fund that we had hoped for, but a new investment entity with specific regional and sectoral focuses. It’s still good to have a new player on the scene and I hope that the model evolves based on market feedback.

Angels and entrepreneurs: what do you think of the OETF?

15
Jul
El Dios olvidado / The Forgotten God

Flow Ventures Announces Investment in ArtAnywhere

We’re very happy to announce our second investment of 2009, in Montreal-based ArtAnywhere (www.artanywhere.com). This online art rental business combines a social purpose with a solid business case. The idea is simple. There are artists in cities around the world creating artwork which is rarely seen. There are empty walls in businesses and homes in need of inspiration. ArtAnywhere brings the two together to create new galleries in non-traditional spaces, perhaps the one you’re sitting in right now. The option to rent makes art affordable and accessible for everyone.

© Julian Haber Photography - Ship 4

© Julian Haber Photography - Ship 4

This is the first startup created and spun-out of Flow Ventures itself. Leading ArtAnywhere is CEO and co-founder Christine Renaud. She’s an experienced educator and social entrepreneur who is already well-known in local startup circles. You can learn more about Christine

and ArtAnywhere on our blog (or Twitter @artanywr) which will be packed with content leading up to our launch.

(c) Mark Dixon (www.markdixon.ca) - Trees on a hill, 90 x 120 cm, acrylic on board, 2006

(c) Mark Dixon (www.markdixon.ca) - Trees on a hill, 90 x 120 cm, acrylic on board, 2006

ArtAnywhere is currently in private beta and has already rallied hundreds of artists in our launch cities of Montreal, Toronto and New York. Spread the word if you know an under-appreciated artist who wants to participate in our beta program by providing artwork. If you’re a business interested in being one of our “beta renters” you can sign up on the site.

As investors, we’re thrilled to continue finding and funding great new startups under Flow’s unique funding + acceleration model.

Raymond

30
Mar

Flow Ventures Announces Investment in Symtext

We’re happy to announce that we’ve made an investment in Symtext, a Toronto-based startup. Led by digital media industry veteran Ian Barker, Symtext has created a platform for building “liquid textbooks” which combine content from e-books and other digital content into unique learning tools. Containing both licensed works and royalty-free works, Symtext allows professors to create unique liquid textbooks for their courses and provides students with an interactive learning experience that goes beyond traditional textbooks.

Symtext has made great progress and is already working with recognized learning establishments such as Athabasca University and the Queen’s School of Business. It is also working with several major publishers (more announcements to come).

Flow Ventures has a unique investment model that combines Angel-level financing with strategic services including interim management and direct operational support. We look for opportunities where we can accelerate the development of a startup using our experience as technology entrepreneurs.

Keep an eye out for more Symtext announcements to come, as well as more from Flow Ventures. If you are a professor interested in using Symtext in your course, contact Ian Barker for details.