At the MaRS Discovery District yesterday, members of the venture capitalist and startup community gathered for Venture North, to talk about Canada as a place to invest and grow. Featuring a rockstar group of speakers and panelists, a general consensus emerged that, in the past five years, Kitchener-Waterloo and Toronto have turned into hubs of startup activity that are a force to be reckoned with globally. Here are some of the biggest takeaways from Venture North.
Government investment is a key to fostering a startup-friendly environment in Canada
“Back in 2004, the city made an investment of $110 million to an economic development fund to be put into the city over the next ten years, so we partnered with places like Communitech and re-developing old factory buildings. That decision, coupled with the LRT development, really started the interested in downtown Kitchener.”
– Berry Vrbanovic, Kitchener Mayor
“A basic core requirement is infrastructure. We need to improve transportation between Toronto and the Waterloo region, because if we’re going to keep this corridor alive, it needs a well-functioning transit system. Other places in the world would consider this an embarrassment. A lot of people want to live in Toronto because they want a job, but they have to be able to get to these places.”
– John Tory, Toronto Mayor
The Canadian startup community is loyal
“The people who are building are not only great engineers, they’re in it for the long haul. They’re building for the future and you don’t need to have the same kind of indulgences in the present. We had to look our team in the eye and say, ‘we can’t pay you a salary’, and they just said ‘it’s okay, we’ll get through it’. And now almost everyone on that team is on our next venture.”
– Steve Woods, founder of Eloqua (acquired by Oracle), and CTO of Nudge software
“Staying in Canada is something we evaluated. We have offices in New York City and San Francisco, so we could shift the centre of gravity to those places, but we choose not to. And I think the key reason why is because we find that the talent in Waterloo is good but also very loyal. We’ve been able to build a billion-dollar company from Canada with 70 people. The only reason that that’s possible is because people come, they sign up for the mission, and they stay. Versus when you go to the Valley, people are always leaving. I’ve had people working at my company for six years. What that means is you can put a lot of trust and pressure into a single person and not always have an exit strategy for when everyone leaves.”
– Ted Livingston, founder of Kik
Being in Canada forces you to think globally while scaling cheaply
“Being here [in Canada], and not being part of Amazon and not having the same kind of capital coming in, we needed to think bigger. If we’re not going to win the US market, or we’re going to go bankrupt, then we have win 19 of the 20 G20 markets and become #1 or #2 in those markets. And that strategy worked with the cost structure here — while prices went up south of the border, we rolled out that strategy.”
– Mike Serbinis, founder and CEO of LEAGUE, and co-founder of Kobo Inc
“I’m a bootstrap entrepreneur at heart, so what gets me excited is how inexpensive it is to run a business in Canada. Canada is on sale, it’s 25 per cent off. Everything from operating, to growing a company, it’s so much more capital efficient. Raising capital is just diluting the company… you can preserve your capital, you can reinvest your capital. You can grow a significant company without suffering delusion. It’s significantly more expensive to run your business in the Valley.”
– Razor Suleman, founder of Achievers
Canadian startups are starting to prove themselves (thanks to Shopify and… RIM)
“Everyone keeps saying, ‘why invest in Canada?’, and I say, ‘why not invest in Canada?’. Instead of saying we’re a special case, what it comes down to is if you’re a great company, the capital will follow. One thing about Canada is that we have been getting the big wins like Shopify, Hootsuite is on its way, and what you’re starting to see is that VCs are starting to pay attention because they have a fear of missing out.”
– John Soberg, co-founder of Expansive Ventures
“Shopify rung the bell, went public, had a made-in-Canada, financed-in-Canada, raised-in-Canada story, and that was a pivotal moment when it came to Canadian tech.”
– Razor Suleman
“We were at a Canadian top 10 event in Boston, and there were 10 startups doing 10 minute pitches, and Razor was number 10. And you have to make these pitches interesting because by pitch nine I’m sticking cocktail sticks in my eye. And Razor gets up and when he starts, it’s the passion, conviction in terms of what his vision was, to transforming the employee rewards industry, that got me excited. We spent an hour in the cafeteria afterwards and I wrote him a cheque right there, and we ended the Series B.”
– Tim Wright, general partner at GrandBanks Capital, on investing in Achievers
“There was a company called RIM. They hired the best and brightest in Canada, they trained them in things like logistics and reverse supply chain, and opened them up globally to incredible tech, and then they fired thousands of them so they could seek hardware companies all over the Toronto corridor. We have half a dozen working for us.”
– Ariel Garten, InteraXon CEO, on why Toronto is a world-renowned hotbed for wearable innovation
Photos courtesy Jeffrey Beardall.
