In 2013, I think the Atlantic Canadian start-up community will be akin to the smart twenty-something kid down the street you always thought would do well and you’re waiting to be proven right. He has graduated from university with flying colours and has had interviews with good employers, some in big cities.
He has all kinds of intriguing qualities, but he still lives with his parents.
You’ll know your instincts were right when he lands his first job and moves into his own apartment. With that introduction, here’s what I’m going to be watching in the start-up world this year. These aren’t predictions, just 10 things everyone should be monitoring:
- CFAs (Cash From Aways). GoInstant started it in 2011, then LeadSift, Clarity, and IntroHive continued it last year. These Atlantic Canadian start-ups all attracted investment from a range of investors from outside the region. The key indicator of growth is whether investors with no connection to Atlantic Canada are backing start-ups here simply because they’re great companies.
- Oceans. The concept of ocean industries as a segment of the economy exists in few places besides Atlantic Canada, so VC firms tend not to pigeonhole it as a sector they look at. There are enough solid Atlantic Canadian oceans companies that I wonder if there will soon be more discussion of VC funds targeting entrepreneurs steeped in brine and barnacles.
- UserEvents. Jeff Thompson is a serial entrepreneur who has exited one company and has the personal gravitas to make people take notice of what he’s doing. His Fredericton-based B2B company helps mega-companies contact customers who are having problems with their websites.
- Series A crunch. There are probably 50 companies in the region looking for $2 million or more in a Series A VC round, and they’re competing with an estimated 4,000 American companies in the same market for capital. It will be interesting into see how many are successful—and how many find creative alternatives. Which leads us to . . .
- Busts. Not everyone is going to get the cash they need. Some companies could hit the wall, perhaps some that have been backed by public institutions. We could see a few failures. Which leads us to . . .
- Reaction to the busts. I’m talking about the political and media reaction. More companies are launching, so it’s logical that there will be both more successes and more failures. If a few investments turn sour (especially those involving public money), will hue and cry drown out the jubilation of the successes? I hope not.
- Novawise. The operative word in this Halifax company’s name may be “wise.” Co-founders David MacKinnon and Steve MacDonald were college roommates in the 1970s and are a seasoned tech-sales team. Their CRM product is gaining momentum.
- Equity tax credits. Jamie Nicoll’s proposal that the federal government implement a regional ETC for Atlantic Canada is gaining attention.
- At least three exits. I bet there will be a couple of exits that knock the ball out of the park. But I think we can also expect a less dramatic exit or two that return money to shareholders but don’t create the froth of some recent deals.
- Adoption of a big data strategy. Regional companies engaging in big data analytics are gaining relevance. It will be interesting to see a government or large Atlantic Canadian business publicly announces a big data analytics program that employs some of the systems being developed here.
Of course more exciting new companies will launch, and some funding announcements will get our blood racing. The above list is just a few areas to watch—and a sobering reminder that amid the successes, there will be pitfalls.
