Stuart Weinberg – November 11, 2010
It’s a meeting Hatsize Corp. could not have gotten on its own: three minutes to pitch its product to a major Silicon Valley company.
“When we got there, there were at least six or seven senior executives in the room ready to hear this pitch, plus one guy on a teleconference screen,” said Sue Miller, chief executive of Hatsize, a Calgary software company. “It was amazing.”
The presentation went well and other meetings followed. Hatsize is now on the verge of a multi-million dollar contract with the Silicon Valley firm, which Miller requested not be named for competitive reasons.
It would not have happened without the help of the C100.
Created earlier this year, the C100 mentors Canadian-led start-ups and helps them make connections in Silicon Valley, the traditional heartland of U.S. technological innovation. It consists primarily of Canadians who live in that part of California, and is providing a lifeline to Canadian start-ups in need of funding, guidance and networking opportunities. “We were just getting a lot of calls from entrepreneurs up in Canada saying that the country’s innovation system was really taking a beating. The venture capital industry was really down,” said Chris Albinson, co-founder of the C100 and managing director of Panorama Capital, a Silicon Valley venture-capital firm.
Tepid returns coupled with a sharp decline in investment activity have wreaked havoc on Canada’s venture capital industry. In 2009, deal activity in the Canadian venture capital market fell to C$1 billion, down from C$1.4 billion in 2008, and the lowest level since the mid-1990s, according to Canada’s Venture Capital & Private Equity Association. In the third quarter of 2010, the industry raised just C$35 million. In the U.S., nearly US$3 billion was raised in the same period, according to Thomson Reuters and the National Venture Capital Association.
Recognizing a vacuum needed to be filled, Albinson and another expat Canadian, Anthony Lee, arranged a meeting last December of prominent Canadians living in Silicon Valley. The idea was to create a group modelled after the Indus Entrepreneurs, or TiE. A networking group created in 1992 by expat Indians in the Valley, TiE now has 56 chapters with 13,000 members in 13 countries.
Albinson and Lee, a general partner at venture capital firm Altos Ventures, invited 65 people to attend the meeting. Seventy-five showed up and all but one agreed to contribute $800 to become charter members of the C100, Albinson said. “We’ve been on a tear ever since,” he said.
An estimated 250,000-300,000 Canadians live in northern California, according to the Canadian consulate in San Francisco. Many have ascended to lofty heights, including Robert Lloyd, senior vice-president of global operations at Cisco Systems Inc., Patrick Pichette, chief financial officer of Google Inc. and Chamath Palihapitiya, vice-president of growth, mobile and international at Facebook. All are members of the C100.
Since its official launch in February, the C100 has held five mentoring events, including two sessions of its flagship program called 48 Hours in the Valley, said Ron Piovesan, manager of corporate development at Cisco, and a C100 member. Start-ups must apply to attend the 48 Hours program and, as part of the application, they must identify a problem they’re encountering in their day-to-day operations, Piovesan said. In the most recent session in October, about 200 start-ups applied and 20 were chosen, he said.
Selected companies are matched with a C100 mentor. “It’s kind of scary because you’re revealing all the holes in your t-shirt,” said Miller of Hatsize, who attended the first 48 Hours session in May. “But, what’s great about it is, as chief executive of an early-stage company, there’s almost no one to talk to about this stuff, so there’s good advice.”
In addition to the mentoring opportunity, companies have opportunities to network, pitch venture capitalists and hear addresses from Silicon Valley luminaries, such as serial entreprenuer Steve Blank.
The C100 is helping generate buzz around Canadian start-ups and the funds are beginning to flow. Since its launch in February, six start-ups that participated in C100 programs have gone on to raise a combined US$47 million in venture-capital funding, Albinson said. “We want to educate our U.S. colleagues that Canada has great companies and you can make money by showcasing those successes and move the bar up for Canadian entrepreneurs,” he said.
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