Searching for life on MaRS

MaRS Phase 2. This does not bode well…

Yesterday afternoon I decided to visit MaRS and see for myself… just how empty (or occupied) is Phase 2?

Of the 20 floors, only 3 had any tenants. And all but 1 tenant (a clean tech fund with 2 errr vultures according to MaRS 101 h/t Mark McQueen, but in my estimation exceedingly nice guys) were provincially funded organizations! Not one startup to be found in Phase 2.

It is a new building after all… so unfazed, I continued on to Phase 1 which has been open for years. If PR statements are to be believed surely I’d find a hive of startup activity.

I saw a sign for Execusuites… perhaps this is where the serial entrepreneurs have set up shop?

So I turned down a dark hall to find… empty offices (again the listed tenants almost entirely provincially funded agencies), there was one lonely but pleasant provincial employee at her desk.

Execusuites. French for empty seats…

The MaRS office, stationed behind the main lobby, had perhaps a dozen staff members mulling about in an area with 30-50 desks. I backed out and continued on…

Could I find even a single Ontario startup?

Yes, exactly that… just one startup!

While I admittedly had low expectations walking up to the building for a spot check, I was pretty shocked to discover what the ~$1B (real estate and operating budget) netted.

I sat down with the founder of this MaRS based startup, to learn how he ended up at MaRS, which if any programs he thought had value, and what might be done to improve the situation.

It turns out his company took over space previously leased by GE, apparently many of the corporate tenants have logos on doors but next to no staff using the building!

Did his startup get substantial value from the advisory services, educational programming, or market research? His answer was pretty much… No.

How about investment? His company had recently raised several million dollars from notable valley and local investors, was IAF interested in joining the round? No again. In IAF’s opinion his startup didn’t need their capital – is the IAF policy to prioritize allocation of capital to weaker startups? It seems so…

This founder agreed that MaRS required structural change and that most if not all of the programming should be canceled. However until such change was implemented, he wondered perhaps something could be done to extract some value for Ontario startups and was working toward this end… the best idea currently on the table? An open space for startups to connect, use WiFi, etc. otherwise known as a coffee shop (now being planned for the empty ground level auditorium still under construction in Phase 2).

He had been pushing for this open space (an improvement over the status quo in my opinion as well) within MaRS… The administration’s concern: How could they ensure visitors were registered / counted as MaRS clients? I thought, perhaps a MaRS client card with every latte… but was pleased to hear him say that they relented.

So this my friends is the absurd result of the much ballyhooed innovation stimulus programs at MaRS – a $1B coffee shop (and two towers filled with bureaucrats).

Le sigh.

Join the conversation: https://www.facebook.com/groups/startupnorth/

NYC Seed versus IAF

Wow, NYC Seed is an interesting fund focused on seed-stage technology companies in NYC. It sounds familiar to the IAF program by the Ontario Centres for Excellence.

The NYC Seed fund is a joint venture between ITAC, New York City Investment Fund, The New York State Foundation for Science, Technology and Innovation, New York City Economic Development Corporation, and PolyTechnic University. In addition to investing up to $200,000 per startup, the fund aims to give entrepreneurs support via a network of "notable entrepreneurs, technologists and venture capitalists," and plans to help the companies it funds seek series A round funding when they reach that stage?

The fund currently has $2 million under management.

The Investment Accelerator Fund (IAF) is similiar, it allows up to $500,000 in the form of convertible debt for early-stage companies.

Fund	Requires
NYC Seed	A team (2+ people) with a compelling idea that makes sense today. Your team should be technically savvy, with members possessing a proven record of completing complex technology projects. We will ask to review a prototype of your product. Company must be based in NYC.
IAF	Technologies or intellectual property (IP) the company intends to commercialize must have unique and protectable aspects that establish a sustainable competitive advantage Full and unencumbered legal right to the commercial use of the company?s technology or IP The products and services the company intends to bring to market must meet a defined market need and have a significant and sustainable advantage over competitors The addressable market should be at least $20 million and clearly defined The management team must have the skills and domain expertise to be successful, or be willing to replace or augment the team as necessary A clear path to commercialization and a plausible plan to support it The company must be incorporated, or be incorporated by the time of IAF investment Total revenues should be less than $500k from the time of incorporation Intend for at least 50% of salaried employees to be based in Ontario

Fund

Requires

NYC Seed

A team (2+ people) with a compelling idea that makes sense today.
Your team should be technically savvy, with members possessing a proven record of completing complex technology projects.
We will ask to review a prototype of your product.
Company must be based in NYC.

IAF

Technologies or intellectual property (IP) the company intends to commercialize must have
unique and protectable aspects that establish a sustainable competitive advantage
Full and unencumbered legal right to the commercial use of the company?s technology or IP
The products and services the company intends to bring to market must meet a defined
market need and have a significant and sustainable advantage over competitors
The addressable market should be at least $20 million and clearly defined
The management team must have the skills and domain expertise to be successful,
or be willing to replace or augment the team as necessary
A clear path to commercialization and a plausible plan to support it
The company must be incorporated, or be incorporated by the time of IAF investment
Total revenues should be less than $500k from the time of incorporation
Intend for at least 50% of salaried employees to be based in Ontario

There?s not a huge difference in the funding, or the requirements. But the NYC Seed option just feels cleaner. The IAF eligibility requirements are verbose and at times a little obvious. The big difference might be in the size of the fund, NYC Seed is just $2M where IAF is a $29M fund. And the differences in focus, NYC Seed is focused strongly on ?software and web-oriented technologies?, the IAF fund is part of the Centre of Excellence for Communications and Information Technology covering diverse areas as wireless and wireline communications, the Internet, human-computer interaction, health and medicine, software design, network planning, education, security, among others.

NYC Seed aims to provide ?entrepreneurs support via a network of "notable entrepreneurs, technologists and venture capitalists?. Very similar to the Business Mentorship and Entrepreneurship Program provided by MaRS.

There?s a different feel in the web copy used to describe each program. The IAF program just feels more cumbersome. However, it offers many of the same advantages for Ontario companies.We need to do some work to help local entrepreneurs understand the availability, benefits and people at OCE to connect with John MacRitchie, Bryan Kanarens and Charles Plant.

I think all entrepreneurs looking to raise funding should be able to answer the questions on the NYC Seed application form. My offer, any Ontario-based entrepreneur that wants a connection to OCE, just send me an email with the information from the NYC Seed application (see below) and I will forward it to John MacRitchie.

What?s the idea?
Why now?
Who are your competitors?
How will you make money?
How will you use the funding?
Please describe your product development roadmap. How long will it take to complete your first version?
Please provide bios for each founder.
Please provide 3 references for each founder.

Blognation Shuts Down

Blognation finally folded today. I have no idea which side of the story is true and which parts are false, but it doesn’t really matter. I won’t link back to all the posts, there would be too many to go back and find.

Tris Hussey has been blogging at ca.blognation.com since April (I believe — I can’t seem to tell from the site). Tris has done a fantastic job of covering Canadian tech startups and has given us especially great coverage of West Coast startups. He has also scooped us on a few great stories.

I am bummed that Tris won’t be blogging about Canadian startups for the next while at least. Canada is losing out on this one, for now at least. It was the editors/writers of Blognation who got the worst end of the deal.

Tris has posted that he is looking for full time work, specifically as a community manager. I have heard from a few companies recently that are looking to hire someone in the same type of position, so I am pretty sure that it won’t take long for Tris to land on his feet, considering his depth of experience in building communities and in the blogging tools space.