Atlantic Canadian entrepreneurs received some hard-won lessons in the world of venture capital and angel investment on Wednesday, hearing the investing world had evolved in recent years.
The Atlantic Venture Forum opened yesterday and featured a few well-chosen speakers that highlighted the latest trends in backing startups. The schedule is packed with 22 of the leading companies in the region pitching to the assembled investors, but the speakers highlighted what is going on outside the region. I’ll have more on the pitchers tomorrow, but let me describe quickly some of the speakers in the first day.
Paul Singh spotlighted the changing nature of the investment world by discussing his work as Venture Partner at 500 Startups, an American VC that aims to invest up to $250,000 in 500 startups around the world. So far it has backed 470 companies and boasts 20 exits.
Singh’s central message was that modern investing requires more than a gut instinct and both investors and founders have to use readily available information to gain an understanding of their counterparties.
“If you're investing on subjective assessment alone you're in big trouble because the fact is that billions of dollars are already being invested based on data analytics,” he told the investors in the room.
Charley Lax, Managing General Partner of GrandBanks Capital in Boston, implored investors to use their own networks and all means possible to position their portfolio companies with larger companies that could eventually buy them up. “The last thing you want to have happen is to read in the paper that someone just bought one of your competitors because they didn’t know about your company,” he said.
Yona Shtern, CEO of Montreal-based e-retailer Beyond The Rack, described his journey from failed entrepreneur to the head of a company with 450 employees, 9 million members and revenues that have grown 35% this year to $200 million.
He said the company has relied heavily on celebrity-based marketing and developing a network of loyal followers. “We’ve always looked at our customers as advocates and we use them as much as we can to get the word out,” he said.
The day ended with the official launch of Canadian Entrepreneurs in New England, which will be the east coast equivalent of C100 in Silicon Valley. CENE -- pronounced the same as "scene" -- is clearly modelled on the West Coast organization in that it is a non-for-profit group whose members will help Canadian companies that need to make connections in the booming Boston market. It will be more involved in life sciences than the Silicon Valley entity.