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Early Stage Funding February 27 th , 2013 Marc Castel [email protected]

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Page 1: Early Stage Funding

Early Stage Funding February 27th, 2013Marc Castel

[email protected]

Page 2: Early Stage Funding

Company Development Stages

Bright Ideas RevenuesCommercial Demo

3 Beta Customers

17117

Validation ScaleEfficiencyDiscovery

INTA

KE

EXIT

25Months

Page 3: Early Stage Funding

Purpose

Bright Ideas RevenuesCommercial Demo

3 Beta Customers

17117

Validation ScaleEfficiencyDiscovery

INTA

KE

EXIT

25Months

validating solving a meaningful problem and whether anybody would hypothetically be interested in solution.

early validation that people are interested in product and willing to pay

refine business model and improve efficiency of customer acquisition process.

drive growth very aggressively.

Purp

ose

Page 4: Early Stage Funding

Activities

Bright Ideas RevenuesCommercial Demo

3 Beta Customers

17117

Validation ScaleEfficiencyDiscovery

INTA

KE

EXIT

25Months

validating solving a meaningful problem and whether anybody would hypothetically be interested in solution.

early validation that people are interested in product and willing to pay

refine business model and improve efficiency of customer acquisition process.

drive growth very aggressively.

Purp

ose

•Founding team is formed, •many customer interviews are conducted, •value proposition is found, •minimally viable products are created, • team joins an accelerator or incubator, •Friends and Family financing round,• first mentors & advisors come on board.

•Refinement of core features, •initial user growth, metrics and analytics implementation, •seed funding, •first key hires, •pivots (if necessary), •first paying customers, •product market fit.

•Value proposition refined, •user experienced overhauled, •conversion funnel optimized, •viral growth achieved, •repeatable sales process and/or scalable customer acquisition channels found.

•Large A Round, •massive customer acquisition, •back-end scalability improvements, •first executive hires, •process implementation, •establishment of departments.

Activ

ities

Page 5: Early Stage Funding

Funding Stages

Bright Ideas Revenues

GovFoundersFamily & Friends

Commercial Demo

AngelsGovernment

AngelsGovernmentDebt

3 Beta Customers

17117

Validation ScaleEfficiencyDiscovery

INTA

KE

EXIT

25Months

VentureCorporate

Founders: $150k Seed: $600k Angel: $900k Series “A”: $3,000k

Page 6: Early Stage Funding

Discovery

Company Development Stages17117 25Months

Name Source Terms $Amt Note

Summer Company Government Grant 3k .ontariocanada.com/ontcan/1medt/smallbiz/en/sb_ye_summerco_en.jsp

OCE (college-university) Government Grant 150K oce-ontario.org/programs/commercialization-programs/market-readiness

JumpStart Government Grant 25k Need matching $ and mentor. Run through AC

LaunchPad Angel Investment 10-50K Competition

CYBF Government Loan 15k Requires 2 yr mentoringcybf.ca

BDC Institutional Loan 30k Run through CYBF

Hyperdrive Communitech Inv+Loan 40k hyperdrive.communitech.ca

Jolt MaRS Investment 30k jolt.marsdd.com

Extreme Start-ups Angel Investment 18k extremestartups.com

Velocity Philanthropy Grant 25k Competiton velocity.uwaterloo.ca

KickStarter Crowd Funding Pre-Sale variable kickstarter.com

Others

$150

k

Page 7: Early Stage Funding

Canadian Accelerators and Waterloo Incubators

Hyperdrive(Communitech)

Jolt(MaRS)

GrowLab(Wertz,Brody, Landa, Bailey)

Extreme Startup(Varma, Sharma)

Extreme Ventures

Founder Fuel(Ian Jeffrey)

Real Ventures

Velocity(Van Koughnett,

Kirkup)(University of

Waterloo Incubator)

Accelerator Centre(Ellis, Jackson)

(Incubator)

Location Waterloo Toronto Vancouver Toronto Montreal Waterloo Waterloo / Stratford

Type of Company Tech IT, Communications

and entertainment (ICE) (Cdn

residents only)

TechInternet

TechWeb & Mobile(+ other Tech)

Web & Mobile Tech, full-time Waterloo Student

Products that can be commercialized within 2 years

Mentorship 8 EIRs & 50+ Industry Experts & Service

providers, Wkly mentorship:

technology, funding, legal, PR, marketing

HR

80 Mentors + sponsor support

25+Founders 1on1,

Mentors

Wkly mentorship: technology, funding, legal, PR, marketing & human resources

85 entrepreneurs, executives, VC,

angels

6 mentors and access to

Communitech VSG of 8EIRs

6 In-house advisors (technology, sales,

finances, and marketing). Access to 8 Communitech

VSG EIRs

Funding Up to $200K$40K 7%

+sponsor perks

$30K 6-7%+sponsor perks

Up to $25K 5-10%Possible $150K BDC

$18K 6% $10K + $5K/founder up to $25k 6%

$25k Grant -

Networking Excellent Excellent Good Good Good Excellent Excellent

Time 3months 4 months 4 months 3 months 3 months Every term 24 months

Intakes/x yr 10 / 3x 6-10/ 2x 5-7 Fall 3 / Summers TBD Continuous Intake

Program(all involve U-Build your company/product during prg)

Intensive 1on1s, workshops, events,

Capital collision, trips, Demo day

Presentations, Events, Workshops

Demo day

Wkly spealers, Grow Conf (fall)

Wkly mentorship, wkly product demo

w/ Extreme Labs Showcase Day

lasses, guest speakers, feedback

sessions w/mentors, demo day

Events, workshops, Demo day

Events, Networking, presentations,

workshops, advisory services, mentoring

Incubation 65,000 / 20,000 sq.ft.HUB/AC KW

NYC / Silicon Valley

5,500 sq.ft. MaRS Commons

3 mos Vancouver1 mo SanFrancisco

Toronto at Extreme Venture Partners

Notman HouseMontreal

Communitech Garage

Accelerator Centre private and shared

space

Competitive Advantage

Extremely hands on, available 24/7, full service and

comprehensive prg

Local MaRS support, well

networked

TBD - New Several exits(2 prior years active)

TBD-New Excellent early-stage discovery and

validation program

Goal orient program with accountability

Page 8: Early Stage Funding

ComparativeUSA Accelerators:

Hyperdrive(Communitech)

Tech Stars(David Cohen)

Y Combinator(Paul Graham)

500 Startups(Dave McClure)

Location Waterloo Boulder, Boston, NYC, Seatle

Silicon Valley Silicon Valley

Type of Company Tech TechWeb and Software

Tech TechFinancial services,

search/social/mobile platforms, productivity, education & language,

family & healthcare, web infrastructure

Mentorship 8 EIRs & 50+ Industry Experts & Service

providers, Wkly mentorship:

technology, funding, legal, PR, marketing

HR

400Panels, coaching & presentations

Once/wk/20minor on demand

140EIRs, Speakers &

Mentors

Funding Up to $200K$40K 7%

+sponsor perks

$6K/founder up to $18K 6%

$20K 7%+$100K YM+$50K RC debt no cap no disc

$10-100K

Networking Excellent Excellent Awesome (Business, VC, Angel)

Excellent

Time 3months 3 months 3 months On-going

Intakes/x yr 10 / 3x 10-12 / 4x 40-60 / 2x 25/3x

Program(all involve U-Build your company/product during prg)

Intensive 1on1s, workshops, events,

Capital collision, trips, Demo day

Wkly dinner w/ presentations,

Demo day

Wkly dinner w/guest speaker, prototype

day, demo day, meet Sequoia day, Events

High TouchDemo Day

Incubation 65,000 / 20,000 sq.ft.HUB/AC KW

NYC / Silicon Valley

10,000 sq.ftBoulder

None(in community)

10,000 sq.ftMountain View

Competitive Advantage

Extremely hands on, available 24/7, full service and

comprehensive prg

Standardized docs, highly

networked and validated

PG Always on, vested interest, rapid

response, company accountability

Vested, well branded

Page 9: Early Stage Funding

Validation

Company Development Stages17117 25Months

Name Source Terms $Amt Note

Golden Triangle AngelNet

Angel Equity 300k Sept-Junegoldentriangleangelnet.ca

Communitech Fund LP Equity/Loan 75k Technology companiescommunitech.ca

Angel OneInvestor Network

Angel Equity 200k angelonenetwork.ca

York AngelInvestors

Angel Equity 200k yorkangels.com

Georgian Angel Network Angel Equity 150k georgianangelnet.ca

Niagara Angel Network Angel Equity 100k niagaraventureforum.com

S.W. Ontario Angel Network Angel Equity 100k swoangel.com

FedDev IBI Government Loan 0% 999k 1:2 match for “projects” backed by Angel or CVCA

Fed Dev SOFII Government Loan 8% 250k+ Loan to scale to min of 50 employees

Rogue Angels & Clubs Private Various 50k+ High net worth individuals

Pitch Competitions Various Various 1-50k Laurier Entrepreneurship, TieQuest, etc.

Angel List Angel Investment - angel.co

Others

$600

k

Page 10: Early Stage Funding

Efficiency

Company Development Stages17117 25Months

Name Source Terms $Amt Note

Angel Syndicates Angel Equity 1,000k+ For larger deals 500k-1.5m

MaRS IAF Institutional Conv. debt 500k Ontario emerging Technology companies

Golden VenturesPartners

Private Venture Equity -500k Mobile

IRAP Government Grant 10-250k For various projects, new hires, IP filing, R&D

Rho Ventures Private Equity Equity 50k Energy, Health, IT, Communications, Media

Extreme VenturePartners

VC Lite Equity 150k Tech. Provide additional management expertise

BDC Sub-Debt Government Sub-Debt 250+ Need $1m annual revenue

Expresso Capital SR&ED Factoring Debt Finance SR&ED &MRR

Mantella Venture Partners VC Equity Up to 500k

Mobile and internet. Hands on managment

MaRS BAP Government Grant 20k Embedded Executives and projects

OCE Market Readiness

Government Grant/Equity 190k Commercialization projects for academia

Corporate VC Funds Corporations Various 400k+ Specific shopping lists of technology

Others

$900

k

Page 11: Early Stage Funding

Others

Scale

Company Development Stages17117 25Months

Name Source Terms $Amt Note

OMERS Ventures Institutional Equity 500++ Lifecycle funderomersventures.com

iNovia Capital VC Equity 500++ Technology Companies syndicated “A” rounds

Klass Capital LP Equity 2,000+ High Growth SaaSklasscapital.com

BDC Venture Capital VC Equity 1,000+ www.bdc.ca

Round 13 Capital LP Equity TBD round13capital.com

Plaza Corp LP Equity 500+ Technology Companies plazaventures.ca

Best Funds LP V. Debt 1000+ Short-term venture debt for tech cos. bestfunds.ca

Comerica Investment Bnk V. Debt 1000+ comerica.com

Summerhill VenturePartners

LP Equity TBD Wireless, digital media, ITC summerhillvp.com

Georgian Partners VC Equity 5000+ SaaS Syndicated “B” rounds georgianpartners.com

Tandum Capital VC Equity 5000+ Tech. Mostly “B” roundstandemexpansion.com

Various Corporations Corporations Acquisition TBD Mostly talent and/or technology acquisition

$3,0

00k

Page 12: Early Stage Funding

Validation ScaleEfficiencyDiscovery

INTA

KE

EXIT

Real Tech Example

Angels/VC

$500kAngels

$700kAngels

$330kFamily &

Friends$50k

2007 Dec 2010 Feb 2011 Dec 2011 2013

SR&ED

$9k

Founders$120k

Institutional IAF

$500k

Fed Dev IBI

$740k

Gvmt Grants

$136k

2014

Series A

$2-5m

SR&ED

$300K

Gvmt Grants

$223k

SR&ED

$210KSR&ED

$49KSR&ED

$21