Context is Everything

Its the context stupid. A play on James Carville’s famous advice to Presidential candidate Bill Clinton in 1992. When marketing something complex like big data, economic policies, semantic computing, trade policy, etc.; best to keep it stupid simple. Customers don’t much care how a solution is delivered so long as the get the result they are looking for. How the solution is delivered matters, but principally in how it makes the customer feel about how they have achieved the desired result. Nobody likes feeling like they overpaid, killed kittens, or bulldozed a rainforest, but ultimately customers just want the result. Carville’s message to Clinton and ultimately to the American Electorate, is that the Clinton Administration will ‘fix’ the economy (implying the Bush Administration broke it), which will ‘create’ jobs, ‘raise’ wages, and ‘grow’ the economy. Clinton’s ‘customers’ (the electorate), did not really care how a Clinton admin would achieve these broad promises, they only needed to ‘feel’ that he could. You could fill a room with nobel prize PhD economists and political scientist and none of them could provide you a clear answer as to whether or not any of Clinton admin’s policies lead to the economic boom that coincided with his presidency, but none can argue that he can claim delivery of the promised result.

Complex business solution selling is not a whole lot different. Sure there are entire teams on the customer side and in many cases outside consultants assigned to understanding and influencing exactly how a solution is delivered in order to achieve contracted results, but in the end decision makers care little of the how, they are focused on the why. The Why is the context of buying and selling.

Ontario Startup Funding Roadmap

Over the last three and half years I have directly deployed over $1.4m in $30k private grants to about 50 of the earliest stage software companies in Ontario. We did this through an agreement with the Ontario Government’s Ministry of Research & Innovation (MRI). As our customer, MRI expected we place this capital with Ontario based software companies with growth potential. MRI’s objective for the program was job creation and economic output; we added measures of exits (M&A) and follow-on investment capital (Angel, VC, etc.). Over 250 Jobs (25% overachieved target), $12m (34% overachieved) of economic output through the projects, 5 exits, and $30m+ of follow-on capital were the results. Exits include; AlogAnywhere to 500px, Openera to LiveQoS, Liberate Health to NexJ, Health Media Today to VerticalScope, to Shopify. Growth companies that have raised funding and are continuing to perform are; Viafoura, The OMX, Vantage Analytics, Nudge Rewards, Thought Wire, Symanta, Cozumo, and Memex (TSX-V OEE). A number of other companies not highlighted are building sustainable businesses or are on the path to growth.


I am proud of our performance at Coral CEA and I am proud of the companies I had the opportunity to help get further down the road on their startup journey. I am grateful that the role also allowed me to help number of entrepreneurs outside the grant, providing guidance, a helping hand, and connections whenever I had the chance. I have learned so much from the experience.


One of the most valuable things I have learned through this process is an understanding of the funding environment for early stage tech companies in Ontario. I spent the last five years of my professional life helping the earliest stage companies figure out how to navigate this terrain. This post is my attempt to open source what I have discovered, I hope it helps.  I encourage feedback and contributions to fill gaps.


I will start with the Low Hanging Fruit; government tax credits. These are typically recouped after you spend the money, but do not leave this money on the table, it is cheap, and your business is entitled. Capture the credits and use them to grow.




CRA Listing of Provincial R&D Credits:

Ontario Specific:


Most well-known is SR&ED:


Less well-known but related to SR&ED are OITC: & ORDTC do not let your accountants miss these eligibilities.


If you are or can partner with an NFP / Academic Institution checkout  OBRITC: is a large pool (up to $4m).


If any of your employees are under 30 years old, dig into the Youth Employment Programs. The Government, both Provincial and Federal, are aggressively deploying money to support youth employeement The program to attack for startups is the Youth Employeement Fund that will provide up to $6800 per team member under 30: You can also capture $2/hour for interns, please pay your interns;) Co-Op placements can generate a rebate of up to 30%


When it comes to Tax Credits, I would always assume there are more. A good accountant who is specialized in innovation companies is highly recommended. My go to person is Dale Wilson of Collins Barrow My default recommendation is to use a big 4 firm PWC, Deloitte, KPMG, E&Y. Tax credits are found money, do not get risky with capturing them.


Funding Source Aggregators


Good accountants will help identify other sources of funds in addition to Tax Credits. However, these following services are explicitly setup to provide guidance and assistance accessing public funding.


The place to start is the service provided by the government its self: . The service is relatively new, so the feedback has been positive as the agents have ample time to provide help. It is free, try it.


The two services that I have some experience with, and are freemium models are: and The Funding Portal has more scale and is partnering with organizations like MaRS In this case I would tag that as an advantage. Mentorworks has the best website, an excellent shortcut to understanding government programs.


As a Founder I would do the following: Checkout Mentor Works to get an understanding of what is out there that I think we might be eligible for, then contact the Government Concierge to get feedback and more ideas. At that point I would engage a specialized Accountant, with a roster of clients that look like my venture, and send him/her to work preparing documentation etc..


Government Funded Programs


Do not under or overestimate publically funded programs. Yes most are bureaucratic, slow, and do not ‘get it’, but the capital is inexpensive. If you work the system the system will work for you. These programs should never be core to your funding or business strategy, any dependency here is a recipe for a problem. The programs are extra leverage that should be invested in as far as the capital and leveraged returned provides solid ROI. Simple rule of thumb, revenue dollars are worth 10x public funding dollars. If you are spending more time chasing government money than customers you have a problem.


Here are the key interchanges on the Ontario funding highway:


The Ontario Network of Entrepreneurs


The Ontario Network of Entrepreneurs is the umbrella for all the Regional Innovation Centres (MaRS, Communitech, etc). The RICs are intended and designed to be hubs to access resources. The large centres service a large volume of people from crackpots to Elon Musk. To access the resources you need to acquire attention from the Advisors. Like any other customer, sell high and have a clear value proposition. This institutions want to generate positive PR for their programs. Rounds of funding, customer wins, awards, patents, job growth are the basics they are looking for, sell them your success story. As a success story for a ONE program you have good leverage to make the programs work for you.


The RICs


MaRS, fill out the form, seriosely. I have a number of connections to the key people and I am happy to make referrals, but you will still need to fill out the form. Within MaRS there is the MaRS Investment Accelerator Fund (IAF) & Youth IAF Each require private capital lead investors. IAF caps at $500k, the Youth fund at $250k. Also, if you are trying to hire a leader into your Startup you need to consider the Embedded Exec program to fund up to $60k of the hirs: Within MaRS and the other RICs the staff has different points of value, be targeted, know what you want from the organization and focus on extracting it., I am not as well connected in KW, but I can still help. Communitech has a number of programs under its umbrella as well, which can add capital and value. Its accelerator, like MaRS’ Jolt (think its out of money) is an interesting option for very early teams. Google for Entrepreneurs is an interesting program with very little cost and access to a lot of upside if leveraged properly For more mature businesses the CDMN soft-landing program has been successful for several companies I have worked with and carries a positive reputation, if going out of market to build the business tap in this has a couple unique programs that are valuable, checkout for ventures targeting Hospitals, led by Dan Wasserman. For Seed ventures tap into Mike Betts and


Futurepreneur (formally CYBF) – provides services along with a $30-45K 5% BDC Loan. People get hung up on the personal guarantee of the loan. If you are that unwilling to invest in yourself its a very strong signal to investors. If you think a government backed program designed to encourage the risk of entrepreneurship is going to ship you to the Gulag for your debt, again you might not be cut out for this game. Lastly, you are going to leverage your personal finances. This is cheaper than your savings, line of credit, and credit card; take the loan.


The Ontario Centres of Excellence provides the Market Readiness program is targeted to exract IP from Academic environments and commercialize it:


The OCE Smart Start program is for Startup Founders under 30 and is very accessible All you need is someone on the cap table under 30, and / or be believably youthful;).


OCE also has programs to promote Industry to Academic partnerships worth exploring if you have R&D projects See more on OCE programs to attached MA-PhDs to your venture here:


National Research Council of Canada Programs


My general impression is that these programs are perceived as slow / expensive; however, venture companies with legit R&D activity report good results once the first project is secured.



IRAP ARP program $50k to optimize digital products.


BIAP is under utilized, to my knowledge. If you are Selling into the Public Sector (Hospitals,Universities, Research Facilities, etc.) this should be explored as a way to help customers find or augment budget


CAIP is funding for Accelerators & Incubators, if you are one, check it out:



Academic to Industry partnership programs are a great way to add bench to drive R&D.


National Research Youth Employment initiative to onboard post-secondary grads in SMEs is an attractive program



Is a very large pool of capital that is currently behind on deploying capital. This is an opportunity for entrepreneurs to take advantage of the organizations ‘Use it or Lose it’ mindset.


Investing in Business Growth and Productivity IBGP should be considered by any established SME working to make a substantial investment to grow the business, program is orientated to help small companies go global or expand facilities:


Investing in Business Innovation IBI is the most well known program that acts in partnership with NAO-O registered Angel Groups to add $0.50 on the $1 of private money: If you are raising Angel Capital you and your investors are leaving money on the table if you are not exploiting this program. As soon as you have an Angel term sheet contact NAO-O or an Angel Group (list later).



The Ontario Digital Media Fund, if you are building a digital interactive product or digital content OMDC should be engaged.


I am sure there are more programs out there, the three places I recommend starting are the Government Concierge, Mentor Works, and your Accountant.


On to the hard stuff, that is happily much more straightforward to access. If it is not straightforward, I suggest trying to find customers and not sources of funding. If you are not getting traction with government backed programs you most likely have one of two problems; one you are not eligible, move on; two you do not have a compelling story. If your story is not getting people paid by the government to deploy public money, at zero risk to themselves, interested I recommend you checkout (I funded them;).




General rules of thumb for Ontario Angels, have traction, preferably financial traction. I would highly recommend having a lead Angel before engaging with a group. Be prepared for diligence, every group will have players that are governance geeks, have your board book, etc. in order. These are good ideas in general, but I emphasis to support the common perception that Canadian Angels are conservative.


The best Canadian Angels are typically not members of the Angel Groups, at least not active members. They may, and in my opinion should, leverage the groups for the FedDev IBI benefit. The best Angels IMHO are exited entrepreneurs, if someone has a decent list of Canadian Startup exits over the last couple of decades that would be an awesome place to start. Here are my quick examples: Workbrain, Radian6, Eloqua, 724 Solutions, upcoming Shopify, Hootsuite, Vision Critical, etc.. Build relationships with the leadership groups of the companies that have gone all the way. Ask them great questions about how to get there yourself and the just might help you out with more than advise.



There are others (see NAO-O site) listed are the ones I can provide feedback on and make referrals to.



Seed Venture Capital


Seed capital is the least defined asset class, I have tried to focus on General Partnership with a specific Seed mandate from their Limited Partners. Qualified with the notion that there are VCs not listed here that will write Seed checks, and that some that are listed are super angels. I am qualifying Seed Investors as professional investors that will enter with a Seed Round deal, typically as the lead, from $250 – $1.5m. Rounds are above $250k and less than $2m, generally.





The three bolded firms behave the most like Silicon Valley based Seed Funds the rest all have variants on their approach. MaRS IAF is by far the most active Seed Fund.


Series A Venture Capital


Most Seed Investors will scale up to A rounds so I will not relist them. I am going to include some B round investors to save me making more lists. I am qualify Series A as rounds of $2m – $12m of funding.



I bet you are surprised how long the list is. To my knowledge these funds are active. I have tried to exclude funds like Summerhill Ventures that are inactive. I have tried to just highlight tech investors, though the investment thesis vary broadly. Agnostic of any particular scenario, I would most want to work with Real Ventures or Version One, or Extreme VP. I listed both Real & V1 as Seed Investors, but both have Series A capacity, EVP will be an active Seed Investor. I am drawn to those three because the partners have operated, have great reputations, solid track records, cred in the Valley, and are early in their fund cycles.


Choosing your funding partner is mission critical, not all money is the same, and cost of capital (valuation) should not be your prime concern. As a Founder know what gaps your VC will fill in your board / leadership and what operational leverage they will provide. Some situations will warrant patient, relatively passive investors (key word is relative) that let you and your team run the company. Other scenarios require your investors to bring leverage the table, helping you execute core pieces of the roadmap. Generally, the best VCs land in the middle, giving the leadership team lots of room to operate and create the vision of the company, while actively executing to generate leverage. Especially around Corporate Development, Business Development, Talent Acquisition, and Finance Strategy.


I am of the opinion that you can never be over capitalized, maybe over diluted, but hard to see having too much money in the bank as a problem. As always the best capitalization strategy is REVENUE. If you solve the revenue challenge, attracting investors will not be a challenge. Another rule of thumb, you are ready for investment when investors start asking you if you are looking for investment.

I hope this post is helpful and allows you to spend less time trying to figure out where to find funding so you can spend more time building your Revenue Development Engine.  

Thoughts on being a Startup Guy

I started this post over 2 years ago.
I spent July 13-15 2011 in Montreal participating in the first International Startup Festival, and found myself dreaming big. I love that I have chosen Startups as my industry. The energy of entrepreneurs building businesses is infectious, something only a tiny few of established businesses have. That said, the post (Darkside) that I had started before going to Montreal aligns with the narrative of the early presenters at StartupFest, Dave MacClure and Chris Shipley. Both took different routes to emphasize being an entrepreneur and specifically a tech startup entrepreneur is intensely hard and not for most people (Presentations here & here).

What I love most about startups

The challenge, the knowledge in the back of your head that success is so unlikely, and the fact that you will be fully tested by the process. The experience validated my working assumption that Startup success is about a great many things, but it is firstly and most principally about heart, and the power of perseverance.  As Chris Shipley postulated, the best entrepreneurs over time are typically proven to be a lot more talented/hardworking versus lucky. This fed my theory that luck is an outcome of being good and persevering. A successful entrepreneur needs to be successful at creating the conditions for their luck to happen. So many Startups are dependent on the confluence of market timing, market conditions, and having the right people working together to recognize the opportunity (even if it isn’t obvious to them) that success cannot simply be chalked up to luck. I am not going to take your time with case studies, there are plenty out there.

Let me plant this theory…

You need to be good to be lucky; to stack the odds of luck happening in your favor you need to be persistently good. I will leave my thoughts on the core essence of entrepreneurship being perseverance for my previous post. I want to turn back to Startup Fest.

The Canadian Ecosystem

Canada’s innovation centers, Montreal, Toronto, Waterloo, and Vancouver are doing the right things to build community and the ecosystem required to foster interesting-successful ventures.   None of these places will ever be the Valley. They are, however, doing a good job of learning from the DNA of the Valley and transplanting the key attributes into our environments in Canada. The key next step for them is to begin working on a culture shift within the Canadian ecosystem.

The Startup industry is fundamentally about innovation; success in innovation is about experimentation and being rigorous about the process of failure. FAILURE is the magic sauce of innovation. The core difference between the Valley and the rest of the business world is its cultural attitude towards failure, being good at failing is a desirable attribute for an entrepreneur in the Valley. See this interview with Steve Blank for more.

The Valley ecosystem trains the ability to fail in a way that drives innovation. So long as you ‘fail well’ the ecosystem has the ability to support you in that failure and keep you moving forward in the industry. Failure in other business ecosystems is a scarlet letter, few entrepreneurs outside the Valley have the chance to pick themselves back up after a being proven wrong by the market. It usually becomes time to put your tie back on and get a ‘real job’. So much innovation is lost in this leakage, the odds dictate that a lot of at-bats are required to hit a home run and experienced hitters have much better averages than rookies, I will link up a presentation from Startup Fest made by Jeff Clavier on this.

We need to figure out how to develop more veteran hitters. The take-away, more like validation, I took from the festival is that a strong community, an ecosystem, is critical to creating a sustainable startup/innovation industry, we need to give talented people room to fail.

An ecosystem is an evolutionary process.

The Valley was not a big bang event, the emergence of New York in the Startup industry did not happen overnight. The emergence of anchor companies like 37Signals and Groupon in Chicago is not luck. Austin is not a hub in the startup industry because of SXSWi. These communities were built and fostered over long periods of time. PEOPLE stepped up and led the creation of these communities, which then evolved into ecosystems.

Charlie O’Donnell of First Round Capital closed the Festival with this talk (link when available) about the long term view and personal engagement required to build an ecosystem that will sustain your career path in startups over time. He worked all three of the core components of a healthy startup ecosystem: he founded and worked for solid startup teams that produced economic value (Path 101), he put personal effort into supporting the community launchingnextNY, and he has provided capital (Union Square & First Round) to amplify break through teams and provide the economic fuel that sustains the cycle.

This ties to the evolutionary nature of the startup ecosystems. Too often I hear Canadians bemoan the lack of risk capital in our startup industry. The ‘Catch22’ paradox is what it is to be an entrepreneur, solving this problem is a big component of what it is to be successful.

I see a six phase process to developing a robust startup ecosystem:

  1. Community, people & teams rally around one another to support the creation of new companies
  2. Solid Companies emerge
  3. Companies generate exits
  4. Anchor companies emerge
  5. Risk Capital becomes local & more available
  6. People & Capital begin to cycle through the phases consistently.

A couple basic rules I have discovered to frame this, Investors invest in what they know, and Risk Capital flows to Innovation & and proven operators. These two rules beget a conclusion that I believe important to the successful development of an ecosystem; it is up to entrepreneurs to own all six phases of the process.

We need to…

  • Build our community, not the government (etc.).
  • Create solid teams by any means necessary (overcome the catch22!).
  • Produce shareholder value.
  • Build disruptive companies.
  • Bring back exited entrepreneurs & successful VC’s to re-invest returns back into the process.
  • Find people to choose Startups as a career and continually add value in the ecosystem over 10 – 20 years.

Final Thoughts

I will address Toronto, where I live and spend my time. We are generally in phase 2 of this process, we have some exceptions like Workbrain in phase 3, but for the most part, Toronto is still searching for startups to exit in 9 figures or build anchor companies like RIM in Waterloo (current issues set aside). Workbrain has driven the creation of several phase 2 companies like Dayforce, I Love Rewards and Rypple that are re-investing money, knowledge, and most importantly people from that successful exit back into the startup ecosystem. Companies like Freshbooks seem on a trajectory to build a Toronto Anchor company that will provide the critical mass of highly skilled entrepreneurs to fuel the growth of earlier phase startups.  Montreal is providing an excellent example on the capital side with Year One LabsReal Ventures and iNova who are driving capital into their local ecosystem.  In short, we still have a long way to go, and key work still is needed to solidify the foundation of phase 1 our community.

I think we need to put community effort into slowly shifting the Toronto attitude towards failure, to one that is productive and encourages innovation. I think the strength and growth of the Lean Startup Movement through groups like LeanCoffeeTO is a key starting point for this shift. Lean is a great way to learn how to ‘fail well’ and the meetup group provides a supportive environment to share experience both good and bad. So many businesses fail at failing, let’s get better at it.

I invite you to share your thoughts.