Mark MacLeod, General Partner with Real Ventures, and Danny Robinson, co-founder of Strutta, weighed in on Canada’s startup landscape on a Q and A moderated by Mark Evans, co-founder of Mesh. The audience was very engaged, with a wide range questions coming in fast from the live audience and the Twittersphere.
Danny and Mark agreed that barriers are tumbling down for startups on both sides of the border. “It’s a lot easier for people to get started now than 10 years ago – the landscape has changed completely. The barriers to achieving true scale are bigger than ever – there are lots of people going after the same prize – but starting up is easy.”
Following up on Tobi Lutke’s comment on the lack of Canadian investment in the keynote, Mark and Danny were asked if they sense the landscape is changing in Canada. Danny’s take on it is that while Canadians suffer from the cultural stereotype of being more modest (and maybe less likely to market themselves aggressively enough), in the web world everyone is connected. “The barriers between Canada and the US are disappearing but without capital, it’s difficult to think big.”
What’s the best way to protect your idea? No dispute: “Execute fast!” It’s about getting out there and doing it. If you have an idea, find the quickest path to finding people to use it. “It’s not about the idea – there are no secrets – entrepreneurs will bounce questions around and seek feedback. The decision to invest at the seed level is 60% about the team – it’s very little to do with the idea itself.”
What is the ideal company for a startup investor and how do you take it to the next level? Mark’s response: “We want to be first money into new web and mobile startups for $500k or less. Ideal average invest is $250k, sometimes up to $400k. We can put an additional $2m into it down the road.”
Raising funds is still the biggest challenge in Canada. Lots of people are starting up without operating experience and then can’t deliver but the industry is changing – there are more people with experience entering the field. The challenge for fund managers now is convincing people the startup can actually deliver returns, even though 10 years of history illustrates otherwise.
The conclusion: For entrepreneurs it’s easier to get funding than ever before. The challenge with tech people is everyone wants to be an entrepreneur. How to you get people passionate about your thing? Danny’s advice: “Lots of company manage without venture capital but eventually you need it, so bring in new managers with operating experience. This trend started in silicon valley and the performance of those funds is already showing positive results. We will see in 10 years if problem has been solved here in Canada.”
For those who want the low-down, Mark wrote about venture capital funds on his own blog: http://www.startupcfo.ca/2011/06/incubators-vs-accelerators/
Next up: Marking panel with Leigh Himel, Greg Hounslow and Sarah Dickinson.