Today’s VCs tell you the secrets of a successful pitch

By Marielle VokseppThink of your relationship with a VC as a marriage

At last week’s Entrepreneurship 101 lecture on raising money, leading venture capitalists divulged the secrets of successfully pitching to an investor. The secret is in the relationship.

The panel discussion, led by Barry Gekiere, Managing Director of the Investment Accelerator Fund (IAF), featured high profile folks from the VC industry:

• Bryan Kerdman, Managing Partner, Bryker Capital Corp.
• Duncan Hill, General Partner, Mantella Venture Partners; Founding Partner, Basecamp Labs
• Josh Sookman, CEO, Guardly

And what advice did these top investors have?

When preparing to approach an investor, speak to advisors and other entrepreneurs who have worked with them to find out as much as you can.  Still don’t know where to look for an investor? Read: How to identify an investor for your business.

It takes five minutes for an investor to decide if they are interested in you. Once you have chosen someone to approach with your pitch, make sure you have the right tools. (What tools, you ask? Read: Tools you need to raise money.)

Watch the rest of the lecture video on “Raising Money” to learn more from this Q&A session and hear it first-hand from leading venture capitalists.

Downloads and Resources:

• Video: Raising Money
  
• Entrepreneur’s Toolkit: What is the valuation?
  
• Entrepreneur’s Toolkit: How investors determine the valuation of your business
• Entrepreneur’s Toolkit: The hidden elements in a valuation
• Join the Entrepreneurship 101 Facebook group

Reposted from MaRS

Marielle works as part of the education team at MaRS. She helps entrepreneurs get access to business resources both online and in-person.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

Read Full Post »

Do you have what VC’s are looking for?

By Marielle Voksepp

“Remember the golden rule: He who holds the gold, makes the rules.”

VC’s want money. Not just any money; BIG MONEY.

In last week’s Entrepreneurship 101 lecture, Terms of Investment, Shirley Speakman of the Investment Accelerator Fund (IAF) gave an overview of the realities of seeking out private investment for your start-up.

Because venture capital is high risk, winners need to be big — and big means at least nine-times return with a potential for high growth. Investment from an outside investor also means being prepared to accept new terms for your company. To see a list of considerations to bear in mind before accepting outside investment, read the article:  Are you ready for a private investor?

If you do decide that your company is ready to accept outside investment, you’ll want to use this workbook to ensure you have the right tools in place to raise money: Financing: Identifying, targeting and engaging potential investors.

Most importantly, before spending long hours and a large amount of preparation to  demonstrate your worth to an investor, find out if your company is “VC-able”: watch the lecture video.

Downloads and Resources:

• What is the Investment Accelerator Fund (IAF)? Find out here
• Lecture video: Terms of Investment
• Slide Presentation: What do VC’s want?
• Article: Venture capital term sheets
• Article: Elements of a term sheet
• Article: Venture capital term sheets
• Entrepreneur’s Toolkit: Articles, workbooks and learning tools on the Terms of Investment

Reposted from MaRS

Marielle works as part of the education team at MaRS. She helps entrepreneurs get access to business resources both online and in-person.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

Read Full Post »

Bootstrapping: Stretch what little funds you have

By Marielle Voksepp

Always use some bootstrapping 

“Bootstrapping is the reality for 98% of start ups”, according to unreformed entrepreneur and former MaRS leader, Charles Plant.

What is bootstrapping, anyway?

Bootstrapping is using your own money and other types of money that are available to build your business.

At our last Entrepreneurship 101 lecture on bootstrapping, Charles discussed creative ways of growing your business without raising money from investors.

As a result of his experience with about a dozen emerging companies, Charles is a strong advocate of the bootstrapping model. To learn more about its pros and cons, watch the lecture video.

Downloads and Resources:

• Video: Charles Plant on Bootstrapping
• Charles’ Slides: Bootstrapping
• Entrepreneur’s Toolkit – Financing your idea: Bootstrapping
• Entrepreneur’s Toolkit – What financing approach is right for your business?
• Join the Facebook Group

Marielle works as part of the education team at MaRS. She helps entrepreneurs get access to business resources both online and in-person.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

Read Full Post »

What do cleantech investors want? Rupert Merer tells all

By  Joseph Wilson

Cleantech investment: Where is the money going?

Recently, we kicked off the MaRS Best Practices Special Valuation series with experts talking about investor interest in the biotech industry.

The message: the economy is pretty quiet these days, and cash is not flowing like it once was, especially for R&D companies in the biotech or life sciences fields.

Rupert Merer, a Director of Equity Research at National Bank Financial, will join Tim Babcock from the TSX Venture Exchange, where he will issue a similar warning for the cleantech field in Canada.

“It’s a tough market for IPOs these days, but there’s always money for good companies,” says Merer. “The market doesn’t have much patience for companies burning too much cash. They’re looking at companies that are better at bootstrapping.”

One of the things that cleantech start-ups want to know is how investors determine how much their company is worth. “Investors value a company based on its potential to generate cash,” says Merer. “There are lots of different metrics to evaluate.”

One of the key metrics to look at is the company’s potential for global competitiveness. “It’s really an international market these days,” he says. “We market Canadian equities to the global investment community.”

A bright side to the state of venture capital in Canada is that we don’t suffer from the same extremes of boom and bust as in cash-rich Silicon Valley. “There are a number of US companies that are moving to Canada,” he says. “They are attracted by the conservatism that fits Canada’s culture of investment. In this kind of economy the Silicon Valley model suffers more.”

Merer and his team at National Bank Financial have broadened the scope of their portfolio. Instead of just focusing on technology that generates clean power, they look carefully at anything that could be considered a “clean environmental technology.” Merer’s team is looking at water technologies, alternative fuels, waste management, recycling technologies and energy efficiency.

All this work has paid off. Recently, Merer was named by Brendan Wood International as the top analyst in the country in the alternative energy category. “It really is a group effort,” he says about the award. “We have a whole sales desk working in this space.”

Merer has worked both at start-ups and at large companies such as Enbridge, so is well placed to examine opportunities in the market of environmental entrepreneurship. “I track the industry and make recommendations to investors on where to put their money in the industry,” he says. Rupert Merer is the guy you want on your side.

Reposted from MaRS

JosephWilson is currently an education advisor at MaRS. He also writes on issues of technology and culture for NOW Magazine, the Globe and Mail, Spacing and Yonge Street. He is the Executive Director of the Treehouse Group, dedicated to fostering innovation by hosting cross-disciplinary events.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers pro vide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

Read Full Post »

Open source seed documents

By Mark Zimmerman

Need some ready-made legal documents? 

Angels and micro-VCs are an increasingly important part of the funding landscape for many of our clients, particularly those in the web and mobile application sectors.  One side effect of all these new investors has been a proliferation of new variations of the standard legal documents presented to start-ups.  Some good, but many bad.

The start-up community in the US responded to this same trend by rallying around a series of standard, open source, vanilla investment documents.  Ted Wang of Fenwick & West, a Silicon Valley law firm was the first advocate of the new model that I’m aware of with a post in VentureBeat.  He eventually created the “Series Seed” documents that are used by many leading angels including Ron Conway and Mike Maples.  Others also made their documents publicly available, including Techstars, YCombinator and Founder’s Institute. All with the goal of simplifying the fund raising process for investors and for start-ups.

A month or so ago I asked colleagues here at MaRS if a similar set of standard templates had been made public in Canada.  We didn’t know of any that were easy to download as a jumping-off point.  We did some digging, reviewed the US sample documents, best practice recommendations posted on the National Angel Capital Organization wiki and a large number of financing documents used here in Ontario to paper deals. From those examples, we’ve developed a set that work under Canadian law and mirror the US seed recommendations. Here they are.

Our goals with the documents were the same as Ted’s. We wanted them to be:

1. Fair, favouring neither the investors nor the founders
2. Simple and short, so that entrepreneurs and seed investors can understand them with a minimum of time and effort
3. Fill-in-the-blanks templates, intended to be filled in and reviewed by the parties and their counsel, with any redrafting focused on terms unique and specific to the deal

We’ve created these samples:

• Term Sheet which defines the overall terms of the deal
• Subscription Agreement that details the terms of the sale of shares to the new investors and the representations each party is making to other
• Articles of Amendment which add the new Preferred Shares that the investors are buying to the corporation’s capital structure
• Shareholder’s Agreement that defines the rules for voting and selling the new and existing shares of the corporation

We’re working on a few other related agreements to complete the package:

• Founder’s Agreement which defines such things as the relationship between the founders, transfer of IP to company and what happens if a founder leaves
• Employment Agreement (see our Independent Contractor Agreement template), for new and existing employees, ensuring that IP is owned by the company and that there is an appropriate non-compete agreement among other provisions.

We’d welcome suggestions for any you think we’ve missed. And we’d also like you to comment on these templates too — let us know how they can be improved.

We hope these templates will simplify things for investors, founders and their respective legal advisors. We’re sure they’ll generate some discussion and debate and we’ll incorporate the best suggestions in version 2.0.

Mark advises entrepreneurs in the information technology, communications and entertainment practice at MaRS. He specializes in B2B enterprise software, SaaS business models as well as security and privacy.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

https://riccentre.wordpress.com/2010/11/22/open-source-seed-documents/ ‎

Read Full Post »