Entries from the 'Venture Capital' category
Sxipping Out On Investors?
In this week’s Business in Vancouver, Curt Cherewayko reports that tech entrepreneur Dick Hardt has been named as a defendant in a statement of claim that alleges he made misrepresentations during a pitch to investors who eventually invested US$370,000 into Hardt’s Sxip Identity Corp.
According to the claim, plaintiffs Caliber Management Ltd., Polygon Financial 05 LLC, Ron Stevens and Danny Robinson advanced money to Sxip Identity (in the form of convertible bridge notes) after Hardt approached them last Summer to fund the sale of some Sxip assets. The claim alleges that Hardt told the plaintiffs that he was in negotiations to sell Sxip Identity to Google, Microsoft or another notable tech company.
When Hardt’s attempts to sell Sxip Identity failed, he told the plaintiffs that Sxip Identity was insolvent and that their notes has little or no value. This is where things get messy. The plaintiffs allege that Hardt failed to disclose that there were two separate Sxip entities (Sxip Identity and Sxip Network - he is CEO and President of both) and that only Sxip Identity would be a party to the notes.
Sxip Identity is indeed insolvent with a March 2008 balance sheet indicating that they owed Sxip Networks $4.7 Million and Hardt personally $275K. Sxip Identity’s total assets at the time were just under $1 Million.
The Plaintiffs allege that because of this “related creditor” debt, Hardt and the company has already redirected to themselves any value that Sxip Identity had. The plaintiffs claim an order for restitution and rescission for the money they advance to Hardt, as well as damages. According to BIV, Hardt is examining his options.
Vancouver’s tech entrepreneur community is small and everyone knows each other, so it should be interesting to see how this story unfolds.
Cambrian House gets the axe
So much for the wisdom of crowds. Techcrunch (and Mark Evans) are reporting that Calgary crowdsourcing up-start Cambrian House is headed for the deadpool. Apparently VC Spencer Trask passed on making an investment in Cambrian but instead has picked up their assets cheap - fire sale cheap. Techcrunch’s Erick Schonfeld reported today that Cambrian House’s IP, assets and website will be sold to Spencer Trask for far less than the $7.75 million that investors pumped into the company.
Spencer Trask plans on taking the assets and rolling them into VenCorps, a Cambrian House project that was exhibiting as the Canadian Innovation Exchange in Toronto two weeks ago. Vencorps community builder Will Pate was holding down the booth and did a great job demoing how they’re going to apply the crowdsourcing concept to venture capital.
BlackBerry Partners Fund Announced?
VentureBeat reported yesterday that Research In Motion, the RBC and Thomson Reuters invested in an $150 million venture investment fund, called the BlackBerry Partners Fund, to support developers of applications running primarily on the Blackberry.
Shortly after reporting on the announcement, VentureBeat pulled their blog post but the details lingered in RSS readers prompting many (including Techcrunch) to jump on the news and potential slip-up.
The fund will be used to invest in both applications and services for the BlackBerry platform, but it won’t be exclusively to support the Blackberry. Companies that support other mobile platforms in addition to the Blackberry can also apply for monies for the fund. According to our source, the fund isn’t designed to be competitive with the iFund, because it will be free to invest in applications serving that platform too.
The venture firm backing the fund is Canada’s JLA Ventures, a Montreal and Toronto firm active in mobile. That firm will co-manage the investing process, together with the investment group of Canada’s largest bank, RBC Venture Partners. RIM, RBC and Thomson are anchor investors in the fund, and will advise in the fund’s management. Jim Balsillie, Co-CEO, Research In Motion, is on the advisory board of JLA Ventures.
In the missing post VentureBeat claimed that they learned of the news in advance of the fund’s official launch and that an announcement will be made at an Orlando convention on Monday.
IGLOO raises $4 Million from RBC
Waterloo’s IGLOO announced today that they’ve closed a US $4 million equity financing round from RBC Venture Partners. IGLOO’s software as a service (SaaS) model provides a suite of Web 2.0 and Facebook-like services for firms, allowing their employees to improve in-house communications and share information. The financing will enable IGLOO to extend and commercialize its suite of collaborative social networking tools. The Globe and Mail picked up the news quickly thanks to a Research in Motion connection.
Dozens of technology startups ache to make a name for themselves in the social networking game, but only one has Research In Motion Ltd. co-chief executive officer Jim Balsillie on its board. For Igloo Inc., a Waterloo, Ont.-based company that develops corporate social networking software, Mr. Balsillie’s involvement is the difference between obscurity and instant credibility.
Ironically, Balsillie’s attempts to land a much larger Igloo (Mellon Arena) and it’s flightless inhabitants in 2006 was a popular topic for Canadian media as well.
BC Advantage Funds Leads Mobidia Financing
BC Advantage Funds announced today that they have completed a further investment in Vancouver’s Mobidia Technology Inc. as lead investor in a $7,500,000 round of financing. Interest in the offering was strong, allowing Mobidia to complete a second closing later this month to accommodate additional investors.
“This financing comes at a very exciting time for Mobidia, with the explosion of peer-to-peer communication and streaming video placing a heavy burden on wireless networks and demonstrating a clear need for our technology,” remarked Derek Spratt, Mobidia’s CEO. “This financing will allow us to continue with our aggressive growth strategy, and continue to build on our relationships with our partners including Vodafone, T-Mobile, Sprint, Cisco and Microsoft, among others. We are also gratified at the over-whelming response to our financing, and are pleased to see it over-subscribed.”
David Raffa, Partner & COO of Advantage, said “along with an impressive track-record as a serial entrepreneur, Derek Spratt has brought new strategic focus to Mobidia. We are very pleased with the progress the company has made in the first half of this year, and are excited about its prospects given the extent of its current engagements with its partners.”
I had the chance to attend Spratt’s presentation at the Canadian Innovation Exchange last week in Toronto and while he didn’t pick up the top prize, his pitch was obviously very well received. BC Advantage Funds’ Raffa was also in attendance and participated in a Meet the Investors panel.
VEF: What’s Hot in Tech
For their May 27th event, the Vancouver Enterprise Forum (VEF) is switching formats and running a panel discussion of what’s hot in technology trends, BC companies and tech investing. Rocket Builders’ Dave Thomas will moderate three technology experts - Paul Kedrosky of Ventures West and an analyst for CNBC, serial tech entrepreneur Dick Hardt of Sxip and industry analyst Duncan Stewart from Deloitte LLP. All three will give their thoughts on emerging technology innovations, investment trends and highlights in the local as well as global technology sectors through 2009. The bar opens at 5:30 pm, the panel gets underway 6:00 pm, and networking and dinner follow at 7:00 pm.
The VEF community is invited to participate pre-event by completing a quick online survey to provide their input on technology trends and their impact on BC. If you’re interested, complete the survey now.
Angel Forum Investor Choice Awards
Just a quick post to wrap up the loose ends from Tuesday’s 23rd Angel Forum in Vancouver. Overall, the day was a smashing success – investors rated the day at 4.25 out of 5 and made their votes count for the Investor Choice Awards (award sponsors in parentheses):
- Company Most Likely To Go Public (TSX Venture Exchange): Heart Force Medical
- Best Pre-revenue Company (PriceWaterhouseCoopers): Orelle followed by VanRX Pharma
- Company Most Likely To Be Acquired (Fasken Martineau): OneLight followed by NetSecure and Heart Force Medical
- Best Presentation (TSX Venture Exchange): NetSecure followed by Volo
- Best Exhibitor (Government of BC): Flight Motion Simulators
Congratulations to all the winners! And for those of you who are looking for money for your own venture, the next Angel Forum is expected to be in November. Start polishing those pitches!
CIX wraps up with Octopz winning the top prize
The first-ever Canadian Innovation Exchange (CIX) wrapped up in Toronto yesterday after two days of passionate discussions about VC funding and presentations by 20 up and coming Canadian startups. Octopz, which develops tools for advanced online collaboration, was selected by the audience as the top startup at the event, with Akoha, a casual gaming startup, coming in at second place.
Here is a video summary of the final day of CIX (provided by the event organizers):
In the closing session on the state of VC funding in Canada it was noted that the number of very active VCs isn’t that huge in the country (in the 8-10 range), which is why there might be a perception that Canadian VCs don’t take enough risk. Chris Albison of Panorama Ventures said that it is infact not the Canadian VCs who tend to be risk-averse, but Canadian entrepreneurs, whose approach tends to be on the lines of “I’ve got cool technology, now what do I do with it ?”. He contrasted that with the aggressiveness of entrepreneurs from other countries like Israel, China and India who seem to have the “ferocity” to make it big in the US market from the get go and immigrants from these and other countries reflect that hunger for success as well. Leonard Brody, a very successful entrepreneur and a partner at GrowthWorks Capital, was of the opinion that 80% of all businesses, whether bootstrapped or VC funded, fail, and it is only 20% which succeed. In other words, according to him, getting funded doesn’t guarantee or even improve the chances of success!
In addition to the informative sessions, the key value of the event was in the networking opportunity, as it brought together an incredible number of investors and entrepreneurs in the same room and I’m sure a lot of potential deals got their start at this CIX. Already looking forward to the one next year!
“What Angels Really Want” at NVBC
Mike Volker from Simon Fraser University spoke to a packed house at the Simon Fraser Segal Graduate School of Business (and president of WUTIF, the Western Universities Technology Innovation Fund) with his talk on “What Angels Really Want” at the New Ventures BC event held at the school on April 30th. With a background in technology start-ups, Volker was able to tie together advice between innovative entrepreneurs and the investors looking to take them to the next level.
Volker said that good companies will always get funded, but should try to avoid the “e-myth,” which is the assumption that technical-minded people have that they will also be skilled at business. Entrepreneurship and leadership matter, Volker said, and getting the two camps together is most important.
Current conditions, from low interest rates and R&D costs, to great infrastructure and easier financing and special incentives make it a perfect time to start a new business, he said.
New Ventures BC is a business competition, created to find new and innovative BC companies. The instructions to the New Ventures jury were to pick companies that are “the most likely to be commercially viable, with the greatest value.” Volker said the same principles apply when looking for investors.
CIX: PlanetEye & Redwood Technologies
Toronto’s PlanetEye is a destination site for travelers looking for a new way to plan a trip. First and foremost, PlanetEye combines geo-tagged photographs with leading edge mapping technology. On top of that layer PlanetEye aggregates advice from locals and travelers to inspire desitination exploration and assist in making trip planning decisions. PlanetEye’s Travel Pack concept allows you to treat their site as a electronic manila envelope for all your trip planning newspaper clippings. Affiliate relationships with partners such as OpenTable and StubHub allow travelers to book the majority of their itinerary all from one site.
Calgary’s Redwood Technologies is tackling wireless carriers biggest problem, the three B’s: Businesspeople Blackberrys, and Billing. While business people love using their wireless device all month long, the end of the month almost always results in sticker shock when they receive their monthly bill. Redwood’s primary service is momentem - a mobile telecom expense management subscription service for busy professionals. With momentem software on your handset, you have the ability to tag calls, emails, expenses and your activity in real-time. Allocate the information to clients and projects, attach notes or action items for reminder email follow-up, while flagging billable time or cost, all to assist in billing clients and/or making sense of your monthly cell phone bill via their reporting function. Sidenote - Redwood was Company Of The Year at the Banff Venture Forum last year.
