in Canada, Venture Capital

Finding a future for Venture Capital in this country

I wrote a guest piece for The Mark News this week, which was published today. I tried to look at some of the endemic problems which gave us our last swell of Venture Capital funds in Canada, why I thought they came in to being, and what might be next.

I also tried to spread the blame around a bit.

At the end of the day, those who hustle and build things that people want will win. It doesn’t matter what side of the table you are on, the rules are the same.

Get out there and hustle.

  1. Jevon:

    First, thanks for giving a damn. Your perspective comes from a founder who has lived the issue. I love it. Here are a few added comments from the other side of the fence: an operator turned independent board member turned VC.

    I have been in and around the Silicon Valley for 18 years and there is definitely a much stronger “go big or go home” mindset here with the funding of companies. This often results in excess spending on sales and marketing before the product or value prop sings, but it also fosters bigger outcomes for the winners – and a much deeper ecosystem.

    In Canada we have systemic issues in the technology landscape. Jevon, as you articulate, the total amount of capital to deploy in Canada isn’t the issue. The issue, in my mind, is that too little capital has been deployed in too many companies. Our “peanut butter spread” mindset has garnered several good outcomes, but not many great ones.

    OK– lots of headwind– so what do we do about it? Toss in the cards? No way. Instead of worshipping Silicon Valley, we learn from the success model and create our own.

    Where do we start?

    I am a “double down” kind of person. Anybody who has worked with me has heard me yap about 80/20/80. I think we need an 80/20/80 attitude in the Canadian tech marketplace. We need to focus 80% of our energy on the 20% of companies that have an 80% chance of succeeding. Set much higher bars across all of our ecosystem from mentors, to angels, to incubators, to VCs, to board members, to anyone providing advice to our community. A few more thoughts:

    * Mentors must bring value or stay out of the game. If founders are not coachable, move on to the next opportunity. If VCs do not bring value beyond money, do not engage with them. If incubators are coaching, set much higher bars for the outputs your companies produce or shut down.

    * Funding “good companies” does not work. We need more $ in potentially great companies. Whether we are funding pre-revenue companies with seed $ or growth equity, the bar must be higher. At a minimum, here are some high-level standards to measure potential of success independent of stage:

    Big frigging market – no debate.
    Massively differentiated value proposition that’s not we are smarter, nicer, cheaper, faster etc.
    Significant competitive barriers to entry.
    Tailwind versus headwind – the market is out looking for a solution. “Market makers” make good road kill.
    Excellent team that’s open to coaching.

    If there is ambiguity over the above, the ecosystem needs to either address it or move on.

    * Post-seed VCs must spend more on less. Work the models so companies can get through the troughs — or don’t fund them. Available capital in Canada for venture is not enough, so we must spend our capital on the best and brightest or nothing will change.

    Founders, do not fall in love with your product or your people. Before you talk to anyone about funding get experienced people to rip your strategy and pitch apart. You only get a few chances to get it done so make sure they count. Network like there’s no tomorrow. Gather people around you who have proven “big league” execution skills. Talk to everybody who can spread the message and bring value. Get yourself down to the Valley. Cold-call and get connected to anyone who can make your business move faster and smarter. If you don’t your competitor will.

    I love Jevon’s attitude and perspective. My add is simple: Bring it or stay home. If you are in the Canadian technology ecosystem, run faster, harder and set higher goals or we are going to fall behind – and we will not catch up.

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