I have always been somewhat intrigued by the fascination some people have with looking back at a given calendar year. I assume they do so in the hopes that the enumeration of the past year’s achievements and successes (but rarely failures) will bring satisfaction and encouragement that repeats itself in the upcoming year. Experience has shown me that none of my last 19 years as an entrepreneur have ever been even close to resembling one another. I feel that the intensity has constantly increased year over year. I think the rush against time is never-changing, and the odds and the amount of effort required to overcome life challenges are always unique. Of course, at the same time, the stakes seem to keep getting higher. We have been investing in new opportunities driven by exceptional entrepreneurs at a rate of 8 deals per year since Fund II (launched in 2007). Over 60% of our deals have been in very early or pre-revenue companies. All of our investments were done in sectors we understand. We have invested in entrepreneurs that we believe in and in large and growing markets that fit our IT cluster strategy (Mobile Internet and Ecommerce, Enterprise SAAS and Cloud-Computing, Digital Media and Communications). Our management’s focused expertise has allowed us to better identify fast growing companies for which we can provide specific insights, and attract complementary skill sets and managerial experience. As a result, many of our investments are either rapidly growing revenue and/or are growing exponentially in their markets. We know that there is nothing easy about building a successful tech company these days. I can only applaud the founders and CEOs that we’ve been privileged enough to work closely with for their constant efforts and energy in making the impossible a reality. Hard work? Yes - and a lot of it! But, most importantly, these entrepreneurs have repeatedly proven that by focusing their energy on the elements of their business they do control, they can learn faster, adjust quicker and gain market validation at much lower cost than anybody else. We have lost 3 of our portfolio companies as a result of not controlling these factors. With all of what we have gone through over that last 12 months (our re-enforced management team, a rapid portfolio growth, M&A analysis, missed opportunities, liquidations, course-corrections, market changes, unique new investments and high quality deal syndication), I can only be ecstatic when thinking of the work load, challenges and opportunities staring at us right in the eye for 2011. However, when I come to think of it, I’m not a big fan of New Year Resolutions either (especially since I’ve listed so many in my past that I was never able to respect). I think we should stick to doing what “feels right”, and what drives our deep passion to succeed. I personally put a lot of effort in doing so. I think that what it boils down to is: “Doing more of what one is amazing at, and doing less of what one is mediocre at.” That simple rule makes me a better person, our team stronger and more cohesive, and our fund a great resource for exceptional entrepreneurs who are looking for a helping hand in building great tech companies. I'm totally psyched, curious, excited and anxious when thinking of what awaits us in 2011: raising a new fund, working with some of the most amazing entrepreneurs on the planet, building up our current portfolio of companies, identifying new opportunities and establishing long lasting relationships… in our own way, helping change the world for a better place! I’m looking forward to what lays ahead…Happy New Year!
The past year seems to have gone by ridiculously fast - actually, the past decade seems all but a flash! For all of us at iNovia, the last few years have been very rewarding. We have achieved many critical milestones, and yet seem to have set ourselves up with even more for the coming year.
Friday, December 31, 2010
Looking forward to 2011!
Friday, December 17, 2010
A brave new world: Amid the recent industry turmoil a rash of new VC players have emerged in Canada
This post was originally written for the Private Capital Privé winter 2010 edition of the printed magazine. And was Curated for nextMontreal on November 22, 2010. No point in letting a good crisis go to waste. Opportunity emerges during times of market challenge. At the tail end of perhaps the toughest decade that the global – and Canadian – venture capital industry has endured, a flurry of new fund managers has hit the fundraising trail in Canada and successfully raised first-time funds. It takes guts, and patience, to launch a new venture at times like these. You may have heard that the venture industry in Canada has been declining for years, that LPs are ‘pruning’ managers rather than adding new ones, and that raising a new fund is nothing short of a suicide mission. Nonetheless, you can’t say that entrepreneurial spirit and guts are not alive and well in the Canadian venture capital industry. Compelling market opportunities, good teams, and perseverance in a difficult fundraising environment is paying off for a new generation of emerging VC managers in Canada. In more than one way, we are witnessing the re-birth of the Canadian venture capital industry. Canada has always been, and continues to be, a venture market that is dramatically underserved by capital, and so there is plenty of room for new entrants – indigenous, entrepreneurial and from outside our borders. Over the last year, against all odds, a new generation of emerging “entrepreneurial investors” teamed up around specific domains and market segments, built strong teams the same way a startup builds an A-team, and launched into a world of opportunities and chaos. Impressive accomplishments on the fundraising trail by upstart GPs has created a dramatically changed landscape in Canadian venture capital. Not to belittle the effort, it should be pointed out that some of these debut funds were on the money raising trail for a few years. And now we have a whole new crop of opportunities being pursued, by a whole new crop of new venture investors. Global digital media funds, global water business funds, expansion capital where none existed before in Canada, to name a few. Capital: $100M first closing First Close: May 2010 Partner Locations: Vancouver and Shanghai Investment Focus: Digital media Sources of Capital: Numerous Canadian and foreign institutional, corporate and private LPs. Team: Paul Lee is the former president of Electronic Arts responsible for the worldwide studios, as well as an active and successful angel investor. Glenn Entis is the former chief visual and technical officer of Electronic Arts and former CEO of Dreamworks Interactive. Divesh Sisodraker is the former CFO of Taleo Corporation, former CEO of Pivotal Corporation and former finance head at ALI Technologies (McKesson). Jason Chein is former general manager of EA China and former Asia developer relations with Microsoft’s Xbox group. Capital: $100M+ First Close: February 2010 Partner Locations: Toronto Investment Focus: Water technologies and water-related businesses Sources of Capital: Canadian and International institutions. Team: XPV’s team is a marriage of investment expertise, sector knowledge and deep industry operating experience. “Tenacity, focus and an enormous team effort has positioned XPV to capitalize on the growing investment opportunities now present in the water sector,” said David Henderson. Capital: $50M+, first closing First Close: July 2010 Partner Locations: Toronto Investment Focus: Growth equity firm investing in expansion and later-stage enterprise software and information aggregation companies. Sources of Capital: Institutional investors form Canada and the U.S. Team: Georgian Partners Justin LaFayette, Simon Chong and John Berton; all have hands-on experience in operating and managing expansion stage technology ventures. Capital: $300M first close First Close: November 2009 Partner Locations: Toronto, Montreal and Vancouver Investment Focus: Later-stage Canadian technology companies Sources of Capital: Anchored by commitments from BDC, EDC and Teralys, which sponsored the formation of Tandem in collaboration with two of Canada’s best- known business leaders. Team: Tandem’s managing partners – David Bookbinder, Andre Gauthier, Christopher Legg and Alex Moorhead – all have significant investment and entrepreneurial experience domestically and internationally. “Tandem is the only Canadian based growth equity fund, this give us a unique advantage in both sourcing and working closely with our portfolio companies,” said Christopher Legg. Capital: $20M First Close: March 2010 Partner Locations: Toronto Focus: Invest in domain expert entrepreneurs who are building early stage mobile and Internet software companies, surrounding them with an ecosystem of experienced operators to get their ideas from conception to market. Sources of Capital: A family owned commercial and residential real estate developer Team: The main investment partners are Robin Axon and Duncan Hill. Robin is ex-Ventures West and Duncan was an EiR at Ventures West and previously founded Think Dynamics (acquired by IBM back in 2003). “At MantellaVP we believe strongly in maintaining alignment between founders and investors. We work shoulder to shoulder with entrepreneurs to build their business, and provide the right capital at the right time. This ensures that at all stages of the company’s evolution, a good outcome for the founders is a good outcome for everyone,” said Duncan Hill. Capital: $50M initial closing First Close: October 2010 Partner Locations: Montreal Investment Focus: Seed stage venture capital firm investing in Internet, software, mobile, digital media, social and casual gaming startups. Sources of Capital: Invest Quebec, Fonds FTQ and private LPs Team: John Stokes, JS Cournoyer, Alan MacIntosh, Mark MacLeod, Austin Hill and Daniel Drouet, who have all been entrepreneurs, angels and/or VCs. “The Web and mobile web are creating major disruption, incumbents are being challenged and new markets being created. The productizing and commercialization of ideas can be done with significantly less capital and as innovation is becoming harder to realize internally, established companies are using acquisitions to fuel revenue growth…what a great time to be starting a business … or a venture fund!” said John Stokes. Capital: undisclosed First Close: Started investing in November 2007 Partner Locations: Vancouver Investment Focus: Consumer Internet, social media, online commerce Sources of Capital: personal investment fund of sole partner, Boris Wertz W Media has completed over 20 investments to date, with a majority done in the Pacific Northwest. WMedia also has a unique connection with Vancouver based Bootup Labs. Incubators 2.0 (aka “Accelerators”): In the late 1990s, the first wave of private incubators arrived on the scene in Canada, emulating the models of their U.S. counterparts. A few short years later, precipitated by the technology and equity market implosion, this part of the Canadian venture and startup eco-system entered extinction. Various government programs attempted to fill some of the gaps in providing services (but usually not capital) to the new generation of post-bubble era technology startups. Now, nearly a decade later, with an explosion of new startup activity in Canada’s major technology clusters in Vancouver, Montreal and Toronto, a new wave of entrepreneurially driven accelerators – such as Montreal StartUp, Vancouver’s Bootup Labs, Ontario’s BaseCamp (Mantella-related), Extreme Ventures NeoTech, Bolidea and newly-launched Year One Labs – are taking the Canadian startup landscape by storm. Newcomers such as these are helping build a more savvy roster of entrepreneurs eager to attract follow-on financing from VCs. Some are already generating exits before VCs have an opportunity to get a seat at the table; witness Extreme’s two visible exits, one to Google and the other to Electronic Arts, within its first few years in operation. All provide hands-on support at every stage of a company’s creation and growth – from business development and marketing to financing and team development – to help facilitate early market traction. Oh yeah, and some also have cash, which, not surprisingly, still matters an awful lot to most startups, even if the amounts they need are smaller. Silicon Valley comes calling: Not alone in their optimism for the Canadian investment landscape, the new crop of Canadian venture capital players are also joined by a number of new entrants from the Silicon Valley who are exhibiting keen interest in the Canada. In each case, there is knowledge of the Canadian market opportunity owing to one or more partners having roots in Canada. Altos Ventures, Bridgescale Ventures and Panorama Capital – all Sandhill Road firms – have made investments in Canadian companies during 2010. All three firms focus on expansion-stage venture financing, while making selective earlier-stage investments on occasion. The deals being done by these Valley funds split quite evenly between Western Canada and central Canada. What is most striking is the visibly increasing commitment of partner time to the Canadian market. In the case of Bridgescale, two Canadian-based partners have been added, both in Toronto, including the October 2010 announcement that Derek Smyth – the final partner remaining at now defunct Edgestone Venture Capital – was joining the Bridgescale team. Bridgescale is the first Silicon Valley firm to locate partners in Canada. A betting man might wager that they won’t be the last. This fall, Silicon Valley’s technology accelerator on steroids, Plug and Play Tech Center, announced expansion plans into Canada. CEO Saeed Amidi made the announcement at a private gathering in Vancouver (where he also happens to have a second home), stating a keen personal interest in “strengthening and leveraging the bridge between Canada’s technology sector and Plug and Play’s industry and venture capital network in the Valley.” Virtually every major technology company in the acquisition game, and a list of venture capital funds that appears only in the wildest dreams of most Canadian entrepreneurs, is partnered in some way with Plug and Play in Sunnyvale, California. Plug and Play plans to set up shop in Vancouver in 2011 and its venture arm Amidzad Ventures, which has seed funded dozens of Valley startups including major players such as PayPal, comes along with the deal. Canada goes calling in China. Russia comes calling in Canada: With only a few short years into a landmark fund structure involving a major corporate capital commitment from Research In Motion, alongside commitments from U.S. and Canadian institutional LPs, the Black Berry fund managers – a new partnership between JLA Ventures and RBC Capital – announced the first closing of a new Blackberry Partners China Fund. With $100M+ in initial commitments, this vintage 2010 fund represents a first in Canadian venture capital – a Canadian venture fund manager successfully establishing an international fund. Interestingly, VanEdge Capital, which closed during the same month as Blackberry China, also has designs on Asia, and one of its initial three partners is based in Shanghai. Previous attempts to establish funds with an Asian focus, including efforts over the past decade by private independent managers such as McLean Watson and even the Canadian government’s own BDC Venture Capital, have not taken flight. More evidence of the growing international presence of Canadian venture capital is found in the Russian-Canadian partnership led by Rusnano, who has recently announced plans to partner with John Varghese, CEO and managing partner of Canadian venture fund manager VentureLink. Varghese plans on assembling a new nano-technology focused fund that will pursue investments from a Canadian base. Is this a sign? A new direction for Venture Capital? A new Canadian reality? The Fund will invest in Canadian companies that have the potential for global expansion. The wrinkle or added benefit of the partnership with Rusnano is that each investment will have a corporate sponsor in Russia prior to the first investment being made. Thus the go-to market strategy of each company will be established with a customer that can be referenced, facilitating global expansion. Can we say procurement assistance? Domain expertise, cross-border partnerships, a growing network of valuable industry and private capital relationships, value-added support, seed acceleration facilities and teams: these are all trends gripping Canadian venture capital. A brave new world – with brave new leaders – is evolving, and fast. Co-written by Chris Arsenault and Steve Hnatiuk NOTE: this post was originally written for the Private Capital Privé winter 2010 edition of the printed magazine. And was Curated for nextMontreal.
Thursday, December 16, 2010
Respect for C100 Knockout Entrepreneurs!
After attending “Knockout Entrepreneurs! Venture Capitalists Boxing For a Cause“, the first word that comes to mind is simply: RESPECT. I mean, you have to respect these entrepreneurs for being REAL entrepreneurs! It’s not just about taking such risk in front of their friends, family and industry colleagues; It’s about putting on a great boxing match, showing commitment to a venture, demonstrating their passion for a cause, having the ambition to succeed, taking risks beyond their comfort zones and for at long last hearing that final bell with their heads held high. I (alongside all of the other 160 attendees) was ridiculously impressed after witnessing such a well executed 6 rounds of boxing. After 150 hours of training, François-Charles “The Sniper” Sirois, walked into the ring for the first time ever as an underdog. Like most champions, he was confident of heart, body and mind. Sauntering into the arena with the sounds of “Eye of the Tiger” mixed with “I Gotta Feeling”, Sirois showed some out-of-the-box and energetic thinking that defines him. Unknowingly blessed by a famed (and perhaps genetic) “there is no way I’m going to lose” attitude, the Sniper gave 100% of what he knew he could give, plus an additional 100% of energy, creativity and effort he didn’t even realize he had prior to stepping into the ring. In contrast to France-Charles’ inexperience was Jacques “TNT” Bernier. Jacques walked into the boxing ring with an experienced entourage of purple-clad past champions with a look of complete determination and focus on his face. With AC/DC TNT blasting in the background, I can honestly say that for a moment, when I looked into Bernier’s eyes and grasped his level of concentration, my thoughts turned to: “Oh my, I hope neither one of them get badly hurt”. Jacques was “In the Zone!” Older? Yes. More experienced? Oh yes. In shape? Not as much as François-Charles – but it didn’t matter. TNT didn’t dance around the ring as much as the Sniper did, but his forceful experience and knowledge of when to push at the right moment and time paved the way to a triumphant victory after 6 rounds of top-quality prize-fighting. Checkout the short Video of round 5 The two fine combatants raised almost $40,000 for two very important causes:Fondation Sainte-Justine and Centre of Excellence for Cellular Therapy of Hôpital Mainsonneuve-Rosemont. Luckily, no one was badly hurt, although I do think François-Charles walked out with a broken rib. It was a true sign that he and his opponent gave us all they had. This was their first match, but also their last match! Great entrepreneurs come in different styles, types and personalities. But they all share similar quality traits. Entrepreneurs: By taking up this crazy yet unique challenge, Jacques & Francois-Charles showed us what truly great entrepreneurs they are. Congratulations!
