Looking for seed money for your new venture? This TON Tuesday – another sell-out with 55 people attending – focused on how start-ups can access funding. Featuring a discussion moderated by James Smith at the LeBarge Weinstein offices in Kanata, Raymond Luk and Mark MacLeod discussed what you need to do to gain the attention of investors. Raymond, a classically trained musician, today owns Flow Ventures and a few other enterprises, and is currently working on developing hands-on workshops and mentorship programs for entrepreneurs. Mark, originally from Scotland, has spent 11 years arranging angel investment deals for entrepreneurs, now runs Startup CFO Enterprises. Here now a summary of their comments and advice for obtaining the funding you need to get your start-up out of the gate.

Reality Check

Today investors are different. “It used to be that you could go in with a concept and a business plan and get a $1M.” says Mark. “Today, those funds are not around. The investment today is smaller, and the bar is higher.” With $150K being the average investment, it means you have to work hard as a start-up to get the biggest bang for your buck. “If fundraising the first time takes 5-6 months, when it comes through you are right back to raising your next round. I believe mentoring with the right partners can help you make the most of your seed fund.”

Finding the Right Funds

“Ottawa angels haven’t been very active lately.” states Raymond. Your early research into the angels you want to reach out to is critical to your success. “Educate yourself…know the difference between angels and VCs.” Raymond recommends that you check out www.angelcapitalnework.com and the National Angel Capital Organization at www.angelinvestor.ca for more information. “You can cold call Angel Investors and make your pitch,” explains Raymond. “You can also go outside Ottawa – they(investors) are getting more outside their backyards now.” Some events in the US are even targeting investment in Canadian companies. “I love that Canadians can go to the US, get what they need in terms of funding, get successful and then come back to Canada as Angels!” says Raymond.

Raymond further explains that most angels don’t have access to entrepreneurs, and he is working to organize more meetings to get these two sides together. “A lot of them tweet, many have blogs – you can do your due diligence. The kimona is definitely open.” Raymond further stresses that investors work for you, and entrepreneurs do have the power in the relationship. “If an investor is difficult to get ahold of early on, they aren’t going to be good investors.” he cautions. Also a big no-no – paying to pitch. Raymond and Mark both agree, this is a waste of time and money. “Don’t hire a broker,” says Raymond. “Especially with early investment, it doesn’t work.”

To figure out the kind of financing you need, you have to know where you are today. “Angel investors or seed money is typically a lower investment,” explains Mark. This seed money is geared to get you off the ground. VC Funding is larger and should be your target when you are established with some traction and market penetration.

Being Attractive to Investors

For seed money, Mark stresses that it is better to go as early as possible. “Talk to investors about your plans, go away and execute, then come back and show that you did what you said you were going to do. Investors bet on the founder – your credibility and your brand are critical.” Raymond adds that your attitude towards investors counts for a lot. “If you’re friendly…people WILL spend time with you.” he says.

“There is a new Lean Start-up trend,” explains Raymond, and he advised TON to check out Steve Blank and Eric Ries and their funding philosophies. “Your goal as a start-up is to find a business model that works. Investors are paying attention to this and it will help you do a lot, with a lot less.”

Mark adds that first impressions mean a lot to investors and you should pay attention to how they react to your story. “If they are cold from day one,” explains Mark, “That doesn’t look good. If it isn’t love at first sight…move on!”

Options to Consider

An alternative to straightforward seed money, is convertible debt. “Sometimes, investors don’t want to value your shares and will walk away from a deal rather than have to do that.” explains Mark. Rather than lose the investment, you could consider convertible debt options. It works like this. The investor loans the corporation seed money and charges a healthy interest on that. When you gain your VC funding down the road, you convert the debt into discounted shares. This eases the investor’s jitters and gives them a solid return on their investment. Raymond cautions that some angels are uncomfortable with this arrangement, feeling that if they were the first ones to put their money into a venture, they should realize a full return, not a discounted one.

RECAP of TON Tuesday events are written by Patricia Heard, Director Client Relations, at HireSmart Human Resources Inc. If you don’t have professional in-house HR talent on your team, learn how you can save time and money and reduce risk to your company by contacting Patricia at pheard@hiresmarthr.com.

May 25, 2010, - 5:00-7:00 pm

LaBarge Weinstein’s Kanata offices
515 Legget Drive, Suite 800

Come hear about emerging trends in seed and early stage institutional financing, from Mark MacLeod and Raymond Luk of two new Montreal seed funding sources. The event will be moderated by James Smith and hosted at LaBarge Weinstein. Drinks refreshments provided.

Raymond Luk

Raymond is an entrepreneur and Angel investor based in Montreal. He runs Flow Ventures, a startup accelerator, and recently founded ArtAnywhere, an innovative art startup. He has built and managed a number of successful startups over the last decade and has been an executive of both private and public companies. Raymond is a well-known instigator of tech events including founding StartupDrinks Canada, the largest monthly networking event for startups in Canada. He is a Director of Symtext Corp., is the co-chair of the National Angel Capital Organization Summit for 2010, and a member of the Advisory Cabinet at Project Olympus, at Carnegie Mellon University.

Mark MacLeod

Mark MacLeod has been a CFO for numerous start-ups in the Montreal over the last 10 years, including most recently for Terapath, Tungle, Akoha and Status.net. He currently runs StartupCFO Enterprises - providing financial & strategic guidance and back office admin services for, you guessed it, start-ups, and he is one of the co-founders of Founder Fuel, a Montreal-based QC-government backed early stage opportunities fund.

The Ottawa Network Presents

Inspiring a Sale From the Buyers Side
The First Step in Turning Selling into Buying

April 27, 2010, 5:30-7:30 pm

@

bitHeads Inc.
1309 Carling Avenue
(entrance at east end of Westgate Shopping Centre)

Do you need to influence investors, partners or customers to buy products, ideas or services, or to buy into a vision? All of us influence and persuade other people every day, at work and in our personal lives. 

This session will focus on how to find and use a customer’s REAL psychological drivers to buy. Old school techniques of spraying features and functions and hoping, produce only random success and wasted effort. In today’s more sophisticated markets, discovering what drives another person’s business and decisions is essential before proposing a solution. The same applies to finding partners and investors. 

So come and experience our dynamic speaker and add insights and practical tools to your approach to sales influence. Discover how simple techniques can deliver dramatic results, whether you are a business owner, marketer, project manager or just thinking about a startup.

Trevor Wilkins
Principal of Holis Associates

Trevor Wilkins is an engineer turned software developer, who has ‘jumped the fence’ and been selling complex solutions worldwide for 25 years. He has been involved in or led start-ups large and small, from owner/developer in a garage, through to Director of a NASDAQ middleware company; from the City of London to the America’s Cup; in software and hardware technology; in the Americas, Europe and the Far East.

Trevor and his team have developed a radical and highly effective approach to selling which they deliver as the BCI Programme™. This session is a short snapshot of a key component of the broader BCI programme.

Event Moderator: Walter Knitl, The Ottawa Network
 

Click here for registration details.

The event is free of charge to TON members and anyone who would like to experience TON networking before deciding on membership.

TON Tuesday - Focus on Innovation
January 26, 2010 5:30-7:30 pm
hosted by bitHeads Inc.
1309 Carling Avenue
(entrance at east end of Westgate Shopping Centre)

Innovation is the engine driving Ottawa’s economy. Come hear and interact with our distinguished panel on various aspects of innovation. What is the role of innovation in the business context and economy? What management structures and behaviours are needed to establish and sustain it, and what characteristics constitute the individual innovator. Finally, thoughts on Ottawa’s prognosis for continuing to be a centre of innovation.

<Click here for registration details>

Claude Haw, President and CEO OCRI

Claude leads OCRI, Ottawa’s lead economic development agency. Prior to OCRI, Claude was Managing Partner and founder of Venture Coaches, a venture capital firm which invested in thirteen technology companies.

Claude has been actively involved with more than 30 tech companies over two decades from start-up to acquisition and IPO. With more than 30 years of experience in a variety of technical, management and venture investing roles in the technology sector Claude has been instrumental in the success of many Ottawa-based companies including Venture Coaches, DragonWave, Newbridge Networks and Mitel Corporation.

He is a director of the Ottawa Chamber of Commerce, a charter member of TiE Ottawa, and a past board member of the Canadian Venture Capital Association (CVCA). Claude is also a founder of The Ottawa Network and of Mindtrust, and served as a long-standing member of the annual Ottawa Venture and Technology Summit (OVTS) organizing committee.

As VP of Corporate Business Development at Newbridge, he managed strategic investment programs, from start-up to exit, in more than 20 companies. As VP and GM of the Newbridge ATMnet Business Unit, Claude grew the unit from inception to a $200-million-per-annum business. Also at Newbridge, Claude managed the Severn Bridge Investments fund, investing in 12 companies and returning more than triple the invested capital. He also held senior management positions at Mitel Corporation and Leigh Instruments.

Claude holds a Bachelor of Electrical Engineering from Lakehead University, has completed the Canadian Securities Course and is a member of Professional Engineers of Ontario. He has been a guest lecturer at universities on entrepreneurship, business planning and venture investing.

Tom Duxbury, Sprott School of Business

Tom is a new technology specialist who has been creating products, building teams and launching ventures for thirty years. He has held founding and senior executive roles in many entrepreneurial ventures, including DragonWave, Gridpoint, Newbridge/Alcatel, Mitel, and Pika Technologies. A widely patented inventor, Tom currently teaches innovation management at Carleton’s Sprott School of Business while completing his PhD there.

David Hudson, Director of Lead to Win

David V. Hudson is the Director of the Lead to Win program and is a student in the doctoral program at Carleton University¹s Eric Sprott School of Business. Until December 2008, Mr. Hudson was Nortel¹s Vice President for Advanced Research and Technology Labs. Since 1988, he held increasingly responsible management positions in Nortel both in engineering and product line management. Mr. Hudson worked in all of Nortel Networks¹ product lines, including enterprise, mobility and metro. He has held the Nortel seat on a number of university advisory boards. Mr. Hudson received Bachelor’s and Master’s degrees in Engineering from the University of Waterloo, Ontario.

He graduated from the Systems Design program at the University of Waterloo and his graduate work focused on pattern recognition and signal processing applied to earth resources imagery.

Moderator: Walter Knitl, The Ottawa Network

<Click here for registration details>

TON Tuesday - Interactive Entertainment
November 24, 2009, 5:30-7:30 pm
hosted by bitHeads Inc.
1309 Carling Avenue
(entrance at east end of Westgate Shopping Centre)

Focus on Interactive Entertainment - Definition, Wikipedia - The phrase Interactive Entertainment also known as video games refers to the business of producing and distributing products and services, or the products and services, of which the entertainment value (or outcomes) can be influenced by users through direct feedback.  Come hear our distinguished speakers talk about interactive entertainment, their role in it, what it takes to run a successful business, and Ottawa’s strong play in this industry. Also, does it go beyond the definition as entertainment, and what value does it bring as a tool to life’s other endeavours including business influence, education and training?  Come join us for what should prove to be an interactive discussion!!

Scott Simpson, CEO & Co-founder, Playbrains - Scott is the co-founder and CEO of Playbrains, an emerging development studio in Ottawa, Canada. Playbrains released its first game title to critical acclaim on console and PC this summer and is dedicated to digitally-distributed fun, blurring the lines between downloadable and retail games. Scott is also the CEO of the award-winning services company bitHeads and is a member of the board of directors for ITAC and Interactive Ontario. Scott is a contributor and advisor to many of Ottawa’s tech start-up success stories.

Nick Iannitti - Director of Communications, Fuel Industries - Nick is responsible for developing and implementing strategies for evangelizing the Fuel Industries brand to media and to industry. An avid member of the digital community, he has written and researched extensively on the subject of social media, gaming and marketing, and the role of agencies and creative studios in the changing media landscape.Nick also manages Fuel’s social media services division-in this capacity, he has developed and implemented online strategies for a number of international brands, including HBO, Microsoft, Fox Home Entertainment, Ubisoft and others. Over the course of his career, Nick has worked as a PR specialist, advertising writer and strategist, and as manager of communications and development for a national non-profit organization.He has recently spoken at the CMA’s Digital Marketing and nextMEDIA conferences in Toronto, as well as at the 2009 Television Animation Conference on the subject of Branded Entertainment. Nick holds a degree in Mass Communications from Carleton University in Ottawa.

Kenton White, Adjunct Professor, Carleton University - Kenton has over 20 years experience in media and telecommunications. In the late 80’s, Kenton worked in Los Angeles on numerous feature films and television properties (some you may have even heard of!). Through the 90’s he made the transition to digital media and the internet age, working first for DARPA and later joining Nortel here in Ottawa. Most recently Kenton was the founder and CTO of DISTIL Interactive, an award winning creator of eLearning and serious games. Kenton has a PhD in Physics & Applied Mathematics from the University of Arizona.

Joshua Ostrowalker - Chief Technology Officer, Magmic Games - Joshua has worked on leading edge technology products since 1995. After completing a degree in Computer Science at Carleton University, he was one of the first members of the Java Research and Development team at Corel. Upon joining Beduin Communications in 1998, he developed a personal information manager as part of a suite of applications for Java-enabled devices. Joshua went on to work for Sun Microsystems after Sun acquired Beduin, and helped to build an XHTML Basic browser and MIDP 2.0. In his role as VP of Technology at Magmic Games, Joshua continues to drive innovation and growth in all areas of development.
<Click here for registration details>

Tuesday, October 13, 2009 5:30-7:30pm
Gowling Lafleur Henderson LLP 160 Elgin Street, Suite 2600

Starting your Start-Up: Words from the Wise

Gowlings is very pleased to host “Starting Your Start-Up”, The Ottawa Network monthly event stream that combines a quality networking opportunity with practical advice and insights from industry leaders and subject matter experts.  Starting Your Start-Up focuses on the business basics including financing, team formation, product development, and sales and marketing, that are the foundation for launching and building a successful start-up in these promising and challenging times.

Thomas Prowse, a Partner in the Gowlings Kanata Technology Law Office, will moderate an informal session with two veteran entrepreneurs who will share their stories including their top “do’s” and top “don’ts” for starting a start-up.

Come hear our distinguished speakers

John Shannon
John Shannon is one of Ottawa’s quintessential entrepreneurs. Early in his career he worked in Canada and Europe developing low-level software, systems and mobile networks with Bell Northern Research and then Nortel. In 2000 he left Nortel to be CTO and co-founder of the company that became Bill Me Later, ultimately acquired by eBay in 2008. John has also been a co-founder and early contributor to at least half a dozen other Ottawa startups and one of Ottawa’s active Angel investors. Besides helping raise significant venture capital for several companies, he’s orchestrated millions of dollars of angel investment and government programs. In addition to his experience applying technology to business opportunities, John is an expert at early stage financing and business development.

Michael Wakim – Founder & CEO, Fidus Systems Inc.
Michael Wakim is the founder and CEO of Fidus Systems, an electronic product development company with design groups in Ottawa, Toronto, Santa Clara, California, and Beirut Lebanon. Mike has over 20 years of proven leadership with experience in engineering and electronic design services. He is known for cultivating strong employee loyalty and long-term customer relationships. Prior to founding Fidus Systems, Michael launched two other successful technology companies: Wann Connection Devices, an electronic product company, and Westport Engineering, a design services firm. After selling both businesses, Michael was appointed Director of Operations for the Ottawa design branch of Cadence Design Systems. Michael has invested in a number of start-up companies and serves as a mentor and advisor for several technology entrepreneurs.

Register for free here.

Tuesday, October 13, 2009
5:30-7:30pm
Gowling Lafleur Henderson LLP
160 Elgin Street, Suite 2600

While Starting Your Start-Up is a free event we ask that you register here