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Posts tagged ‘venture capital’

How does Canada Compete with the U.S. for Immigrant Tech Entrepreneurs?

October 7th, 2009 by Greg Boutin

A great post today by Suzanne Dingwall Williams of Venture Law Associates LLP in Toronto, regarding the recent considerations by the U.S. to increase the number of H1B visas for skilled foreign workers, apparently thanks to a push by venture capitalists.

The stats she quotes are startling:

“A recently released study by the NVCA notes that (a) immigrants have started more than 25% of U.S. public companies that were formerly venture backed, and (b) more than 50% of the employment generated by U.S. public venture-backed companies has come from immigrant-founded companies like Intel, eBay, Yahoo!, and Sun.

The New York Times has also taken note, citing Harvard Law professor Vivek Wadhwa’s claim that 52.4% of today’s Silicon Valley startups have at least one foreign founder. US VCs are figuring that, to expand domestic deal flow, they need to expand the immigrant entrepreneur base.” (more…)

Tags: entrepreneur, h1b, immigration, permanent resident, silicon valley, skilled workers, start up, tech venture, venture capital, visa

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Should you focus on revenue or on raising money? (and the case for a VC-management consultant hybrid)

September 26th, 2009 by Greg Boutin

Varun Mathur, the Techvibes Community Manager, who I just learnt is based in Toronto (I look forward to meeting you, Varun), made an excellent point yesterday in his Techvibes post on What Separates 37signals And Twitter ?

For all the talk about “getting to revenue” as fast as possible, VCs are still valuing companies based on hype and unproven potential for exponential revenues. You can build valuations based on traffic, but if you can’t attach a realistic average $ amount to a visitor, and if you are going to hemorrhage your traffic as soon as you offer ads, then your valuation is built on shaky grounds – which in finance means you should likely be extremely conservative or discount it.

I don’t say there is never a case for giving high valuation to companies that have great brand awareness and usage even if they haven’t made a buck yet, but my thesis is that the risk of this revenue never materializing should lead to discounting valuations more heavily than they currently are. VCs should put their valuation through a simple risk-based, probabilistic tree analysis, contemplating the likelihood of 3 basic scenarios: (more…)

Tags: 37signals, initial public offering, monetization, revenue generation, revenue model, silicon valley, tech venture, twitter, valuation, valuation model, venture capital

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Who will match Ontario’s $250M Emerging Technologies Matching Fund?

August 4th, 2009 by Greg Boutin

Image via Wikipedia

It’s official, the Ontario’s Emerging Technologies Fund (ETF) is now open for business. This $250-million fund will co-invest into companies in high-growth sectors such as clean technology, life sciences and advanced health technology and digital media and information and communications technology. Co-investments are made along with qualified venture capital funds and other private investors. For more information see http://www.ocgc.gov.on.ca/

I am generally not a fan of public sector intervention in the private sector, but this comes as a positive move in contrast, since the government has wisely decided to let VCs and angels screen investments for the fund money instead of trying to do it itself. And frankly, after distorting the economy through massive subsidies to under-performing foreign car manufacturers, any public money directed towards innovative ventures is welcome. It also comes as somewhat of a relief to the Venture Capital industry in Canada, which is doing much worse than in the U.S. (yes that’s possible, apparently!), and is down to almost nothing according to this report by their association. Not that there was much in the first place!

The main question is whether there will be dollars to match. In other words, this program unlike, say, SR&ED, doesn’t make investments more attractive. It just makes it possible to invest in more companies. (more…)

Tags: angel investor, canadian innovation, emerging technologies fund, ontario, venture capital

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Will We Soon See a Rally on Web 3.0 Start-Ups? My Take on Semantic Tech

July 7th, 2009 by Greg Boutin

About 3 weeks ago, I left a warm Canadian sun to fly south to San Jose’s chilly weather, and attend the Semantic Technology conference. Or, let’s be fair, 1.5 days out of the five the event lasted. The rest, mostly, I followed through Twitter, which by all accounts tends to be a little like watching the Olympics on TV, as opposed to being in the stadium: you don’t get the pop corn and hot dog breeze, but in the end you know more about the games than people who were there (and not on Twitter too… it gets quickly confusing.)

Of course, the big objective at “Sem Tech” is networking. Thanks to the nice folks of Semantic Universe (thank you Eric and Steve), I managed to make it, last minute, onto the exclusive list of VC Connect, a cocktail reception which gathered both fundraising CEOs and investors (of whom more attended than I thought there would be. I guess the free hors d’oeuvres did the trick). I stroke most great conversations there (apologies to those I met outside of VC Connect!)

So, my impressions of the event. I know those are late but I’m not competing with news organizations, just with analysts, so that’s ok!

Overall, it was sort of “hot and cold”: there were lots of very positive signs and, by all admissions, there is still a lot to do before Web 3.0 and the Semantic Web truly happen.

Key mental notes I made to myself: (more…)

Tags: google, intel capital, market need, market problem, microsoft, searchmonkey, semantic technologies conference, tom gruber, venture capital, web search engine, yahoo

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Are You into Growth or Lifestyle? Building on Great RWW Post

June 9th, 2009 by Greg Boutin

A great post 3 days ago by ReadWriteWeb COO Bernard Lunn on 10 Things to Be Clear About Before You Start a Company. I had the chance to meet Bernard last month at the Web 3.0 conference when we had dinner with a group of Web 3.0 business pioneers (including Alex Iskold of AdaptiveBlue and Andraz Tori of Zemanta). Bernard is one of those unassuming types with a bottomless wealth of knowledge activated on demand. You know, that type of folks everyone likes to have a conversation with, with a good glass of wine to complete the picture.

One of the many ideas that intrigued me in his post is that of checking whether you’re made to grow a lifestyle business, or to pursue a growth company. The reason it caught my attention is that lately I met a lot of tech entrepreneurs who started a business, acquired a few clients and grew revenues, and at that point started to play with the idea that they may need to raise money — and yet are far from clear on what changes this pathway will require from them and their business. (more…)

Tags: bernard lunn, business angel, growth company, innovation entrepreneurship, investment, outside invesment, readwriteweb, tech ventures, venture capital, zemanta