Delegates from some of the biggest players in Silicon Valley – including Facebook Inc., Google Inc. and Microsoft Corp. – will land in Vancouver soon to size up 15 Canadian tech startups at this year’s Grow 2011 conference.
From Aug. 17 to 19, the fledgling tech firms will dive into three days of mingling, pitching to investors, and taking in presentations by high powered guest speakers such as Facebook’s director of corporate development, Amin Zoufonoun; Don Mattrick, president of Microsoft’s interactive entertainment division; and Wesley Chan, a partner at Google Ventures, the investment arm of the search engine giant.
While conference sessions will cover many topics (including the intriguing “Growing Some Balls: How to Build Business Relationships Out of Nothing” and “The Emotional Rollercoaster of Entrepreneurs”), the three-day event is ultimately about young companies hunting for one thing: money.
“The ratio of investors to companies in Canada is pretty out of whack. So I realized there’s really no early stage funding up there,” says conference organizer Debbie Landa.
To that end, a select group of just four startups (still to be announced) will get to pitch their wares and concepts before a panel of six potential investors from Silicon Valley on the first day of the conference.
Landa hails from Saskatoon but is now CEO of her own event management company in San Francisco called Dealmaker Media. With firsthand knowledge of the tech scenes in both Silicon Valley and north of the border, Landa saw an untapped startup pool in Canada that needed capital, and at the same time noticed a dearth of fresh investment opportunities in California’s VC hotbed. That’s why Silicon Valley investors are now looking to Canada as a source of fresh new tech entrepreneurs, rather than just a crop of hirable talent ripe for the picking, she says.
“For years a lot of these (companies) like Google and Facebook and Microsoft have been tapping into the developers coming out of the universities like [the University of] Waterloo, but they’ve been very undercover about it. Now you’re seeing a lot more startups bubbling up from Canada,” Landa says.
After 60 startups applied to be part of Grow 2011, popular online voting narrowed the field down to 25 companies. A judging panel selected the final 15 who will participate in the event and will also choose the four firms that will pitch to the panel of investors. One of the 15 finalists is Rocketr, a Toronto company whose site allows people to share notes they’ve taken with other people on various platforms. The site went live in May and now has 1,000 users despite no marketing push. Rocketr is using Grow 2011 as a backdrop to introduce its site to a worldwide audience.
“We’ll be using (Grow 2011) to showcase a full standalone (version of Rocketr) for the iPhone. We hope that generates interest in the investment community,” says Rocketr CEO Andrew Peek. “GROW will be our first marketing efforts and we suspect it’ll really drive the top line with users.”
The GROW showcase of emerging Canadian tech firms comes just weeks after two Canadian social networking startups announced their impending demise: Akoha, a Montreal-based site that combined game play with good deeds, and Toronto’s Sprouter, which provided access to business experts through a Q&A messaging format.
The survival rates for tech startups aren’t pretty. According to Cornell University professor John Nesheim, author of High Tech Start Up:The Complete Handbook for Creating Successful New High Tech Companies:
- the average venture capitalist finances only six out of every 1,000 business plans that cross their desk each year
- the chances of a high tech business idea actually becoming a successful company that goes public on the stock market are just six in one million
- bankruptcies occur in 60 per cent of the tech startups that manage to get VC funding
One stumbling block to the survival of Canadian tech startups isn’t just weak access to capital, but also to a deep pool of successful Web entrepreneurs who have already ‘walked the talk,’ Landa says.
“Canada doesn’t have a lot of experienced angel investors, especially people who’ve been in the Internet industry. There are plenty (of people) experienced in running a business, but not in the Internet sector. There are not enough experienced investors who can mentor and advise startups,” Landa says.
That sentiment seems to be echoed by Peek as he heads to GROW 2011.
“We’re looking for a very specific type of angel who’s technology savvy and has built a tech business before, who can play an active role,” Peek says.
One factor affecting technology startups on both sides of the border is a radical change now occurring in the tech sector overall, one that shifts the way companies move from concept to successful commercialization, Landa adds.
“There’s a new generation of entrepreneur who’s grown up on the Web. Their version of (tech entrepreneurship) is going to be different: storefront, Web, mobile phone. You want to be able to capture your audience in all of the spaces they’re in today. Traditional entrepreneurs never had to think about that.”