Given that they named the company GoInstant, no one should have been surprised when the founders decided to exit quickly.
Still, we were surprised–I sure was–when the news broke last Monday that the Halifax co-browser company was selling to Salesforce.com for just over $70 million.It was only last September we were reporting that the developers led by Jevon MacDonald and Gavin Uhma had raised $1.7 million from a dream team of Silicon Valley investors.
Not to mention, it wasn’t that long ago Radian6 was acquired by Salesforce.com and Q1 Labs was bought by IBM. The GoInstant selling price was smaller than the nine-figure sums brought in by these earlier exits, but it’s still a significant event. If the GoInstant founders parted with 20% of the company in their lone funding round last year, they still grossed more than $55 million in the deal announced last week.
What this all means is the region is developing rather quickly a new breed of wealthy individual – individuals who share two important traits. These traits have nothing to do with their age, where they went to school, where they live, who they know, or whether they’re immigrants or from old families.
The common traits that really matter are: one, they have benefited from contemporary investment practices; and two, they understand technology.
This is important because digital technology is proving itself to be a potent economic development tool for the Atlantic region. Young tech companies can grow quickly, employ young people, generate exports, improve productivity, and they don’t harm the environment. They require less capital than other forms of innovation, but they still need investment capital, especially seed capital, for the early stages of their development.
Often they seek this capital from angel investors–individuals with high net worth willing to invest in a young enterprise. It would be wrong to typecast angels, but many are in their fifties or sixties and made their money in traditional industries. And by and large, they feel most comfortable investing in businesses they fully understand.
That means that there’s often a disconnect between angel capital and opportunity, because the people who hold the capital can’t appreciate the opportunity as it involves technology they don’t fully grasp. (And the tech community compounds the problem because many of its entrepreneurs are dreadful at explaining their innovation in terms that non-geeks can understand.)
One reason Gerry Pond, the chair of Mariner Patrners in Saint John, is such an extraordinary force is not just that he willingly invests his own money. It’s that he spent his career in information technology and understands all the tech trends, so he grasps tech pitches more easily than other angels.
What’s happening in Atlantic Canada right now is that this tribe of entrepreneurs is growing. In New Brunswick especially, we’re seeing individuals who understand investing money in tech companies. Fredericton-based Smart Skin Technologies recently raised money from angels, and the 10 young companies that graduated from Propel ICT’s Launch36 accelerators have received total investment commitments of about $900,000.
I have no idea whether the GoInstant founders intend to invest in other companies. But I do know that they made their money as a result of such investments and they have a remarkable community spirit. They clearly want to help develop the tech community in the region.
How do I know that? Because Rose Behar of CompCamp, a Halifax-based tech camp for teens , contacted MacDonald recently and asked if GoInstant could provide a scholarship so a young person keen about technology could attend the camp. Without blinking, MacDonald replied that GoInstant would fund at least five scholarships.
It's this type of entrepreneur you like to see hit the jackpot.