We come across many interesting ideas for products and/or businesses but more often than not it requires a lot of digging around to actually to find that gem of an idea.
Maybe that digging is part of the value an investor in start-up’s is expected to add, but as an entrepreneur it pays if you can explain your offering to an investor in a VERY simple manner.
Either it needs to make sense straight away, or you need to explain that it won’t make sense and explain why (simply!).
One of the questions I’m most often asked at Startup networking events is “What’s going on with Montreal Start Up?” so I thought I give the community a little update.
John and I first started thinking about MSU less than 18 months ago. As it took about nine months to close the first fund, we’ve only really been in a position to invest since January of this year. So, what have we done in the last six months? Well, we’ve looked at 94 companies for starters. The vast majority of which, we met with face-to-face to discuss their business and get to know their Founders. We do our best to meet with Founders, because (a) they work hard at their businesses and, even if it turns out that the deal if not for us, the least we can do is take a little time to provide feedback and advice, (b) on several occasions, the business plan which we’d received ahead of time didn’t do justice to the opportunity, and (c) some of the most interesting meetings have been brainstorming sessions with entrepreneurs about the opportunities in a given sector.
Out of those 94 proposals, five got us excited enough that we wanted to invest. What gets us excited? The exact mix varies from company to company but generally it includes a strong team, big market opportunity, a real opportunity for us to add value beyond our cash and some disruptive element. Of the five, we’ve invested in three. One obtained funding elsewhere before we were able to offer them a term sheet. The fifth company decided it needed to re-structure itself first and so has placed its fundraising activities on hold for the immediate future.
Looking back on it, we learned quite a bit in the last six months about the types of deals that make sense for our fund. We also learned a lot about local entrepreneurs. Anyone want to try and guess what I’ll be blogging about next? ☺
Investors love to talk about how they invest in people. For most however, a strong team is a necessary, but not a sufficient, condition to fund a start-up. With few exceptions, investors already want the team to be working on a good idea (even though they know it is likely to change along the way). But what makes a good idea? How do you know if it’s any good? Family and friends are usually the first people to hear of your ideas, but they tend to be supportive of pretty much anything you do. Once you get to asking strangers or casual acquaintances for money however, you had better be prepared to answer some hard questions, to have all your assumptions challenged. Such feedback is rarely pleasant, but keep in mind that its purpose is not to discourage you, but rather to help you refine your plans and increase your chances of success. In order to minimise the pain of those first few encounters, here are some things to consider ahead of time.
Pour ceux qui n’étaient pas au courrant, le dernier-né de la famille Startup North c’est Startup Index, un répertoire des compagnies Internet / TI / Mobile / Biotech / Environment / Médias en démarrage au Canada. Bien qu’on puisse faire des recherches sur le répertoire, je trouve plus intéressant d’observer le niveau d’activité par ville. Si l’on se fit à la carte, Toronto et Montréal semblent être nez à nez dans la course pour déterminer le premier pôle d’entrepreneuriat technologique au pays. Cependant, en passant au travers du répertoire, je me suis rendu compte que beaucoup de compagnies locales n’y sont pas inscrites. J’invite donc toutes les entreprises en démarrage montréalaises à s’inscrire; d’abord pour augmenter leur visibilité sur la toile et ensuite, parce qu’il est important pour Montréal de démontrer un niveau élevé d’activité et d’innovation si l’on veut attirer des investisseurs étrangers et l’attention de partenaires commerciaux ou acquéreurs potentiels de nos technologies.
Un gros merci à Austin Hill et Patrick Lauzon pour avoir organisé le deuxième souper Founders and Funders, un événement de réseautage hors pair selon moi, pour ceux et celles qui sont intéressés par le démarrage d’entreprises en TIC.
Parmi les nombreuses discussions de la soirée, une mérite particulièrement d’être répété. Un de mes compagnons de table nous a fait remarquer qu’il y avait très peu de femmes présentes. Je ne blâme aucunement les organisateurs de l’événement, c’est plutôt un reflet des milieux de l’investissement et des technologies de l’information; d’ailleurs, j’ai déjà écrit un billet à ce sujet. Je suis donc heureux de voir l’émergence de plus d’activités ciblant les femmes en technologie. Après Montreal Girl Geek Dinner, voici la FiQ qui offre un évènement sur le thème de l’Entrepreneuriat TI au féminin.