Bienvenue à Silicon Valley, PQ

[mtlurb]

Wanted: Angel investors

 

Bright young inventors are being ignored, leading to a dearth of 'smart capital,' conference hears

 

 

ROBERTO ROCHA, The Gazette

 

Published: Friday, September 07

There's more risk capital available for new companies in Quebec than at any time since the dot-com bubble burst six years ago. But it's so, so hard to get it.

 

The amount of venture capital available may have grown, but it's all going to the same companies, say entrepreneurs attending a two-day Red Herring Canada event that brings together tech businesspeople, venture capitalists and bankers.

 

The event is meant to spur startups and showcase innovation, but the gap in early-stage financing was on people's minds yesterday.

 

 

Solidarity Fund's Jacques Bernier, John Stokes of Montreal Start Up and the Caisse's Éric Legault take a break at the Red Herring Canada event yesterday.

 

DAVE SIDAWAY, THE GAZETTE

 

"There is an abundance of capital, but it's at the wrong stage," said Austin Hill, a serial entrepreneur and one of the few prominent angel investors in Montreal.

 

"Many of those funds are only investing in companies that already have clients and cash flows."

 

Too many good ideas coming out of university labs or from cash-strapped tech wizards are ignored, he said.

 

And as a result, there are fewer young companies being nursed to the stage where they can score VC deals.

 

George Favvas, president of business software developer Reflexis Inc., called this a "lack of smart capital."

 

"A lot of VCs don't have business experience," said Favvas, who gave up on such funds after three years of running into roadblocks.

 

"They haven't been through the cycles of starting a company and leading it to an exit."

Startups who go to venture capitalists don't need a lot of money, thanks to cheaper computer equipment and free open-source software, he said.

 

Some Internet hopefuls can create a product with as little as $20,000. But most VCs turn their noses up at deals below $1 million.

 

Things are better, said Chris Arsenault, a partner with VC firm MBSi Capital. It's been a gradual learning process for VCs that were, before the bubble, totally naive about how to run a business.

 

Today, more and more funds have people with entrepreneurial experience who know what it takes to make a company thrive.

 

"VC returns haven't been great so far," Arsenault said. "So it doesn't really entice limited partners to join. It's improving, but we still have to prove that investments are making money."

 

Arsenault claims Quebec is ahead of the rest of Canada in early-stage venture capital. Since the Caisse de dépôt et placement du Québec and the Solidarity Fund of the Quebec Labour Federation started pouring money into new funds - about $1.2 billion - the money has been trickling down to early-stage ventures.

 

New arrivals to Montreal, like Toronto-based Brightspark and JL Albright Venture Partners, are among those nourishing brand-new startups.

 

"A lot of people aren't really aware of what we've been doing yet," said Jacques Bernier of the Solidarity Fund.

 

Necessity breeds invention, so there's a nascent movement to create a network of angel investors who can offer seed money independent of institutions.

 

John Stokes, an angel investor who came to Montreal from Asia, launched Montreal Start Up, an organization that aims to find more angels and link them up with entrepreneurs.

The goal is to get angels to pool their money and mentor inexperienced startups on how to proceed to the next round of funding.

 

"Until we have that repeatedly, we won't be able to compete with other tech hubs," Hill said.

 

"Right now, people with an idea just wait and wait. By the time they get their idea funded, there are four other people doing the same thing."

 

rrocha@thegazette.canwest.com

Technocité: Gazette tech reporter Roberto Rocha brings you more from Red Herring Canada. Only at www.montrealgazette.com/technocite.

[JCC-Fromthere]

Ottawa ?? de quoi tu parles, Montréal a 120,000 emplois directs en TI, rien de comparable.

 

Montréal a beaucoup de success stories "made in Montréal" comme Softimage, Autodesk, CGI, etc etc.

 

Je penses qu'il parlait de densité. Ottawa a une population IT directe d'environ 75,000 pour a peu pres 900,000 de population. Ce qui fait qu'il y a un plus grand pourcentage des jobs a Ottawa qui sont IT qu'a Montreal. En fait, a Ottawa, soit tu travailles dans le high-tech, soit dans le gouvernement. Le reste est plus marginal. De la meme facon, il y a surement plus de 120,000 jobs directes en IT a Toronto.

 

D'autre part petite correction, Autodesk n'a jamais été une firme Montréalaise. Ils ont des bureaux a Montreal suite a leur achats de sociétées de Montréal.

[imtl]

En effet, il y a de nombreux emplois en TI à Montréal mais attention, la sécurité d'emploi y est tellement faible qu'au cours des dernières années, de nombreux jeunes talents ont préféré mettre leurs aptitudes à l'œuvre dans des domaines plus stables.

 

Je ne ferai pas l'inventaire des petits (et grands) employeurs en TI qui ont ouvert en grande pompe pour fermer en catastrophe quand le cash flow venait à disparaître.

 

Ce serait triste pour ceux à qui ça rappellerait de (mauvais) souvenirs de pertes d'emploi.

 

Pour vivre "on the edge", les TI (non-couplées à une autre industrie) à Montréal, c'est tout indiqué!