The University of Toronto Innovations Foundation on Monday opened the [email protected] and announced five new sponsors for the innovation centre.
Microsoft Canada Co., Microsoft Great Plains Business Solutions, Q9 Networks Inc., Spencer Stuart Inc. and J.L. Albright Venture Partners will provide some combination of software, support and industry expertise to the centre. [email protected] managing director Andrew Maxwell stressed the centre is not an incubator.
“The [email protected] does not take equity in the companies and provide funding; we encourage people to go the most appropriate place for financing,” whether that be an angel or a venture capitalist, Maxwell said.
Rather than cash, [email protected] receive use of the centre’s physical and technological infrastructure, including computers, phones and hosting services, as well access to the [email protected]’s staff expertise. Along with its relationships with venture capital firms, the [email protected] is also part of a network of 25 non-profit innovation centres around the world, giving [email protected] access to international resources should they decide to take their business global.
Rather than take a percentage of the [email protected], the centre instead receives only a share of any profits the companies make, with the percentage depending on the amount of [email protected] services the company uses. The [email protected] recoups its costs from fees paid by each [email protected], which are typically $1,000 per month.
There are currently eight [email protected]; three that tap into the centre’s services on a “virtual” basis, and five that either reside inside or are in the process of moving into the centre’s physical space. Companies involving students, faculty, staff and alumni of U of T, Ryerson University, University of Windsor, Trent University, York University and McMasterUniversity are eligible to become [email protected], as are companies that have received funding from the Industrial Research Assistance Program, and other companies the centre deems eligible.
Justin Winfield, co-CEO of SonicBoomerang Inc., a multi-media content aggregator and one of the centre’s on-site members, said being an [email protected] has allowed his company to use Q9’s co-location services and avoid costs associated with “putting in furniture and getting phones.”
Despite the lack of hard dollar funding, Winfield said the [email protected] is an attractive option due to its not-for-profit philosophy.
“Frankly, we met NRG several times and know several of the startups that lived and died with that,” he said, referring to former incubator NRG Group. “We wouldn’t have touched it with a 10-foot pole.”
“You’re focusing more on the players than the (incubator or centre) itself,” Segal said, adding that the [email protected] is not fighting the multi-front war than engulfed failed incubators like NRG and Itemus Inc. “It becomes difficult to do, especially when the environment goes south.”
“Part of being in the venture capital business is looking for the next big thing. And a lot of things that come out of universities don’t get the funding they need.”
Maxwell said the combination of private and public sectors is key in making something the [email protected] work. He said that the more than 800 not-for-profit incubation-type centres in North America are in general doing quite well in spite of the limited success of the purely-private incubator model.
“You need a partnership between government, university and industry and I think we’re right in the middle of that,” Maxwell said of the [email protected]
He said the [email protected] helps to raise Toronto’s profile as an innovation centre and to help Canada keep its best minds and attract the brightest foreign nationals.
“It’s to create the opportunities for innovation in Canada so that the best and brightest don’t have to go to the States,” he said. “That’s why I get up every morning.”