Montreal Start Up

MSU closed its first seed stage fund a little over a year ago so I thought I’d do a quick wrap up of how our first year went. 

1. The initial fund was $3M and we said we wanted between $5-$10M. As we raised another $2M this fall, I’m calling this one despite being on the low end of our target.
2. We said we were going to co-invest alongside Angels. We’ve got Angels involved in about half our deals, so I’m calling this one as well even though we need to improve upon it.
3. We were aiming to do at least eight deals in 2008. Well, we did eight and another two are due to close shortly, so we’re good here as well. By the way, not all the investments have been announced yet, but some of you may have heard about the latest one.

So we’re three for three in 2008! Of course, investing the money is the easy part, now we need to help those companies grow and raise their next round of funding. While we still have money to invest, the bulk of our time in the next six months will be spent on our existing portfolio companies rather than looking for new investments. 2009 is shaping up to be a lot of fun!

It has been a busy few months behind the scenes at MSU and we’re really pleased that we are able to make the following announcement:

Montreal Start Up, a venture investor dedicated to supporting Montreal based entrepreneurs in their quest to create and build successful companies, today announced the closing of a $2 million investment in its venture capital fund by the Solidarity Fund QFL, bringing to $5M the amount of assets under management.

This extra $2,000,000 GUARANTEES that more Montreal entrepreneurs are going to get funded ! We would really like to thank Janie Béïque, Luc Couture at the Solidarity Fund QFL, as well as Jacques Bernier, for their support in making this happen.

Nous avons été très occupés ces derniers mois et en voici une des raisons:

Démarrage Montréal, un spécialiste du capital d’amorçage, dont la mission est d’appuyer les entrepreneurs montréalais qui bâtissent les succès de demain, a aujourd’hui annoncé avoir reçu du Fonds de solidarité FTQ un investissement de 2 millions $ dans son fonds de capital de risque, ce qui porte à 5 millions $ les actifs gérés par l’entreprise.

Ces 2,000,000$ de plus, garantissent que plus d’entrepreneurs montréalais vont recevoir des fonds! Nous aimerions remercier Janie Béïque et Luc Couture du Fonds de solidarité FTQ, ainsi que Jacques Bernier, pour leur aide à réaliser cet investissement.

Last week at Startup Empire in Toronto a couple of people told me they felt that the Montreal startup community was much more collaborative than the Torontonian one. While I can’t comment on things in la ville reine, I definitely agree that people here go out of their way to help one another. Last week for instance, I asked Sylvain Carle if he’d be willing to answer a few questions from the CTOs of two of our portfolio companies. They were preparing to deploy their services on Amazon’s cloud but, as newcomers to AWS, they had some concerns. Sylvain went one better and organized a round table discussion for CTOs, developers and sysadmins. In two hours, the newcomers to the cloud were up to speed and even those who had been using EC2 since its inception learned a thing or three. Shout-out to the Praized and Karabunga crews for generously sharing their time and knowledge. 

Last night, Akoha gave a sneak preview of their product offering to a number of their friends, family and investors in Montreal (disclosure -  MSU is an investor).

The founders, Austin Hill & Alex Eberts (along with PR guru Dov) are no strangers to creating buzz and excitement about their projects and once again they made a splash - albeit the type of precision splash that you would see from a Chinese Olympic diver and not that of Shamu the whale !

A reasonable amount of money would have been spent on the event and as an investor in the company I can’t but help consider wether this was actually a good use of money. My conclusion is that it was; and that it achieved a few  things that any start-up entrepreneurs could consider as they launch their businesses.

1) When you’re sprinting the marathon - don’t forget the feeding stations.

When your legs, lungs and brain are fatigued but you realise you’ve only just started the marathon it’s great to see the 10km feeding station. A feeding station is designed to give you renewed energy, but it also marks another milestone on the race. The lungs, legs and brains of any start-up are of course its founders and employees and its essential to provide feeding stations along the way to motivate and re-invigorate the team.

The sneak peak event created an opportunity for the founders to put the whole team in the spotlight. Akoha hasn’t even launched yet but their sneak peak event felt like a celebration of success; as an investor I don’t see Akoha as a success (yet), but I can fully appreciate that as a team, coming together to deliver a product, they have successfully reached a major milestone.

I don’t think that Akoha is actually creating any real marathon runners, but last night a few probably felt like junior (tech) rock-stars.

2) Practice your pitch

I assume (obviously) Akoha intends on taking its pitch to the "world" at some point. That would probably involve presenting the company at a much larger event than the one last night. So their sneak peak event gave them a chance to practice their pitch in a realistic environment -  in-front of an audience with all the adrenaline flowing and nerves jangling (or in Alex’s case "Jango"ing).

Anyone at the event (including myself) would say that the presentation went really well, but the guys at Akoha know that to be the best you can’t be satisfied with "really well". You need to be outstanding - and as practice makes perfect, I think that a real-life test run is a valid investment of time and money. Its all about raising the bar.

3) You get out what you put in

By inviting the community to become "insiders" the sneak peak event has placed Akoha as one of the companies that everyone in Montreal will want to help. This help is invaluable to any start-up and I would encourage ALL start-up’s, early stage and venture backed companies to open up more to the Montreal community. It’s through the community that you will probably find your next employees, your next investors and perhaps even some of your most innovative ideas.

So to the Akoha team - thanks for a great night and good luck with the next 10km !