Focusing on the Later Stages
Perhaps the problem is with the word “startup.”
There’s an impressive support system developing for Atlantic Canadian startups, but the problem is that most of the support is focused on the startup phase. There’s less support for maturing tech, biotech and clean-tech companies.
At Entrevestor in the past year, we’ve written about five different accelerators and entrepreneurship courses offered by at least four universities.
There are other announcements expected soon on incubators, sandboxes and the like.
Business formation is a critical aspect of creating a broad group of knowledge-based companies. The thing is, more work needs to be done in the later stages of a company’s existence, and such work is often more difficult for people in the region because it often requires relationships with people outside the region.
So as Atlantic Canada develops the ecosystem for innovative companies, the next component should be a mechanism that focuses not on a company’s first two years, but on years 3 to 7, helping to take a company from early revenue to large global sales.
It would be great if a group of senior people from governments, universities and industries across the region could focus on three issues: first, early adopters; second, sales of technology; and third, mentors and advisers.
East Valley Ventures in Saint John is already working on these issues, and others are examining them. But the startup segment would benefit from a broader, more concerted effort.
By bringing together senior executives and bureaucrats from across the region, there would be a massive fund of relationships and influence to help these growing companies.
This group’s first job would be to help a growth-phase company find early customers. A complaint I frequently hear from startups is that they can find clients outside the region but not locally.
The group could seek local customers for startups — not just to make introductions, but to persuade bureaucracies to change their processes to adopt locally developed technology.
Job No. 2: Train a generation of tech salespeople. Maturing companies are screaming out for sales talent, and there is a huge opportunity for some educational institution (possibly with financial backing from a company or individual) to open a school for technology sales.
Finally, there needs to be a more concerted effort to find international directors and advisers for Atlantic Canadian companies. By their nature, startups aim to revolutionize their chosen market, so it’s realistic to think they can attract the attention of world leaders in that market.
A group of Atlantic Canadian business leaders would have a huge network of global contacts and could help to link growing companies with top-flight advisers.
Note that I haven’t said we should channel more public money into these companies that have gone beyond the startup stage. That wasn’t an oversight. These maturing companies must move on to the international stage and should raise their money in larger markets.
Raising money in New York, London or San Francisco helps to build networks of contacts in such cities. Handing public money to maturing companies risks using public money to prop up companies that can’t find investment elsewhere.
So to recap, all the accelerators and incubators are great, but the more important and difficult job is probably how to support mid-stage companies.