Vancouver seed-accelerator Bootup Labs announced tonight that Wertz joins board, first funding completed, portfolio reduced. There's no doubt that tonight's annnouncement was accelerated by a growing unfavorable thread on Y-Combinator's Hacker News forum titled Moved to Canada to participate in a startup incubator that had no money. The thread points to a blog post by Statusly co-founder Jamie Martin that tells his side of the story.
Bootup Labs Managing Director Danny Robinson prefaces his blog post announcement with the following...
We were going to be posting this tomorrow, but some people are asking for our side of the story this evening. We’re excited about the group of companies that we’re working with this year, and with the companies that we’ve funded in the past year. We have provided value to everyone that we’ve worked with, even if we had to ultimately make some hard choices recently.
Let's start with the bad news that has everyone talking tonight.
Late last month Bootup Labs booted four of the seven companies from their January 2010 cohort well in advance of their scheduled six-month occupancy. Blast Ramp, Statusly, Zedmo, and AppSocial have left the building and Compass Engine, Foodtree, and Summify remain.
Robinson explains how it all went down:
We had informed our 2010 cohort when they arrived that it was going to take a little while to close the fund because of some new canadian venture regulations that we had to abide by, and because one of our investors was unable to fund when we made a capital call. It was outside of our control, unintentional, and communicated immediately. It took two months to recover but eventually realized that we were going to have a limited fund in the beginning of the year, and we had to make some hard choices. Either starve everyone with partial funding, or reduce the portfolio and fund them fully? We made the decision to cut the cohort to 3 companies, from 7.
I guess the silver lining in this story is that Bootup Labs is now funded.
Robinson reports the first close of their 2010 fund which includes Boris Wertz of W Media Ventures, a number of angels and Venture Capital firm Growthworks. The local tech community is very familiar with Wertz as he has been the most active investor in Vancouver over the past two years.
I suspect many will continue to cry foul or claim that this indicates Vancouver isn't ready for a TechStars-style seed accelerator. After hearing rumblings about changes at Bootup Labs over the past couple weeks, I would have agreed with them.
But now with Wertz on board, new funding secured, and the spotlight of this story, there is no doubt that the next cohort will do their own due diligence before accepting an offer.
Let's call it Bootup Labs 2.0.
Disclosure: Boris Wertz is an investor in Techvibes Media Inc.