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By Marielle VokseppRingsThink 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:

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:

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.

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By Marielle Voksepp
Gold “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:

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.

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By David Crow

I’ve been feeling a little rusty this week. I received feedback that my focus of the past 5+ years on community and evangelism was not necessarily a benefit to an early-stage technology company. This came as a shock as I had to justify and rationalize the past 9 years that I’ve lived in Toronto and why I have been relentless about the need to build a stronger ecosystem and community in Toronto.

I moved to Toronto in November 2001. I had left Austin, TX in July 2001 after spending a few years working at Trilogy Software and at Reactivity Inc. I had spent the previous years doing interaction design, presales, and product management for a sales force automation company and then for early-stage and pre-product clients at Reactivity (this was before the transition from startup accelerator to a product firm aka the XML firewall company that was sold to Cisco). I worked with more than 15 clients including Living.com, AllMyStuff, eLaw.com, Zaplet, MetalSite and others. It was a great time, I learned a lot about small teams, venture funding, and how to effectively build products for undefined markets, undefined customers, and undefined budgets.

When I moved to Toronto there was (and continues to be) a very strong agency culture. There were firms like Cyberplex, BlastRadius, Organic, JWT, ModemMedia, MacLaren McCann, Critical Mass and others. There was a hub for this community with Spadina Bus, TechSpace and AIMS. The problem was there wasn’t a strong Internet application or product culture. I wrote about my investigations looking for TO software companies part 1 & part 2.

As part of the return to Toronto, my spouse started her optometric practice. One of the requirements of the financing to get this off the ground was that I get a regular paying gig. And then strangely September 11, 2001 happened. I took a job working at CIBC in the Retail Markets group as the lead Usability Consultant. I lasted about 6 months at CIBC, big corporate culture was not an environment where I thrived. I found a gig at Ryerson University rolling out the self-service component of their Human Resources Management System. Turns out my first recommendation was to scrap the Oracle 8 Forms based application in favour of new HRMS selection and patching functionality in the existing system using web applications. It looks like the front end of the applicant tracking system I built is still running 5 years after I left (if you’re curious the system built using Fusebox 3.0 running on Coldfusion 6.x against Oracle 9i on Windows Server 2000/2k3). This was as close to product I got until about 2005.

In 2005, I decided I really wanted to be back in the startup game. There was a flurry of activity and events in Silicon Valley, Seattle and Boston that were attracting my attention. I thought I would benefit by replicating the ethos and DNA of these communities in Toronto — see my post on TorCamp. This was the beginning of DemoCamp, StartupNorth and my attempt to facilitate a community of like minded individuals in Toronto doing great things. Did you know that I met Jay Goldman, Jon Lax, Geoff Teehan, Leila Boujnane, Reg Braithwaite, Mike Beltzner, Mark Surman and others at the first BarCamp Toronto?). At the bar after the second day of presentations, hacking and meetups, Albert Lai and I hatched a plan to do a lighter weight monthly gathering modeled after DEMO where entrepreneurs and developers show what they’ve been working on, aka DemoCamp.

And I started thinking about the role that community plays as the framework for making Toronto a stronger ecosystem for software, Internet, mobile startups. I was trying to build my own future. I was trying to create a strong, dense community of companies where designers, developers and entrepreneurs can find employment, inspiration, a sense of belonging. Why? Well this is what I was missing. But it meant that I stepped back from representing a single company or a single product. My role was to build a stronger community. John Oxley and Mark Relph at Microsoft understood this mix of community, product, technology and rabble rousing.  They took a chance and hired me. This allowed me to focus on helping to enable a stronger community. And my particular focus has always been startups, early stage technology companies, etc. It required me to take a role in evangelism marketing. To continue to be a social media enabled and facing presence in the community. To host events and continue to identify, nurture and develop influencers particularly in the unfriendly to Microsoft community.

So it was funny this week to hear from someone in the industry that I respect deeply make comments that my product abilities are substandard and describe the focus of the past 10 years as counter productive to my career. It brought up a lot of personal turmoil about past decisions. And generally it has left me thinking about my role in the community versus my career as product builder. I started all of this community activity because I wanted to build emerging technology products in Toronto. There wasn’t a strong community of product builders and entrepreneurs (or I couldn’t find this community in Toronto). I think there is a much strong network of entrepreneurs, developers, designers, funders and others that have emerged. StartupNorth and TechVibes provide local coverage of events and activities. There are world-class startups like Dayforce, Rypple, Idee, Well.ca, Kontagent, CiRBA and others.

But I think it’s time for me to focus on building a company and products again. To shake off the rust of the past 9 years. And go deep on the product management, design and customer development needed to design, build and ship a world-class product. It leaves me wondering about my pedigree which 9 years ago I thought was stellar: Waterloo, Carnegie Mellon, Trilogy, and Reactivity (an Accel funded startup with spinouts funded by Kleiner Perkins and Sequoia). I get it, this was a lifetime ago. But really have I gone from being an asset to a detriment? And what do I need to do to change this perception. Time to focus on my career and not the community for the time being.

Photo by Lawrence Whittemore http://www.flickr.com/photos/lawrence_evil/149197406/in/photostream/

Reposted from davidcrow.ca

David Crow is an emerging technology and start-up advocate/evangelist. David blogs at http://davidcrow.ca/ and http://startupnorth.ca/ or follow him on Twitter @davidcrow.


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.

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By Mark Zimmerman

Time to sign those homemade legal documents?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:

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/

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