Crowdfunding will likely be one of the top trending search words on Google this year – as well as within the Venture Capital Community. It’s somewhat easy to understand the buzz around crowdfunding when reading about crazy-successful campaigns such as the $10M raise by Canadian-founded Pebble Technology, the $8.5M raise by Ouya, or even the Tesla Museum $1.3M raise. But there is more. While donation and reward driven crowdfunding leader Kickstarter prides itself for having enabled over $473M (as of March 2013) in successful funding campaigns, the peer-to-peer lending company Lending Club has originated over $1.5B in loans and are now filing for an IPO.

So, when will equity crowdfunding hit home? It already has!

Equity-based crowdfunding got the bulk of the media attention over the last year, in big part due to President Obama’s announcement of the Jumpstart Our Business Startups Act (“JOBS Act”) in late April 2012. But interestingly enough, since that announcement, the equity crowdfunding rules and the necessary changes in regulations seem to be stuck in limbo.

While the Securities and Exchange Commission’s (“SEC”) rule-setting period has taken longer than originally planned, it is taking the process seriously and many other security commissions have engaged in a series of consultations and reviews. The Ontario Securities Commission was the first Canadian organization to release a paper intended to initiate a broad consultative process to consider a number of potential new capital raising prospectus exemptions. This was quickly followed by British Columbia and Alberta, while the AMF, the provincial authority in Québec in charge of regulating financial markets, held its first public consultation in March.

Because crowdfunding is an excellent medium for small entrepreneurs to get their message out inexpensively, build awareness, engage customers and raise capital, equity crowdfunding is picking up speed and a number of platforms are already proving successful.

In a nutshell, there are three types of crowdfunding platforms to be aware of:

1. Perks & Donation Based Crowdfunding: Kickstarter and Indiegogo are the North American platform leaders in this category and Pebble Technologies is the poster-child. Pebble raised over $10M in donations and pre-orders. A startup founded by two young Canadian entrepreneurs who had trouble convincing venture capital funds of their smart-watch product market potential.
2. Lending Based Crowdfunding: Investors are repaid for their investment over a period of time and the higher the risk level, the higher the interest rate is. Lending Club is by far the leader in the US market, however, it seems that its Canadian equivalent, Community Lend, hasn’t been as successful and the regulatory hurdles got the best of the company.
3. Equity Based Crowdfunding: When investors get a piece of the company. This is pure equity financing, which is currently only available to Accredited Investors. The unofficial leaders here are Angel List, Founders Club and Crowd Funder.

Although the above list of crowdfunding platforms have made the headlines, our research already discovered over 800 different platforms around the world. And a recent industry report, from Massolutions and Crowdsourcing.org, highlighted that last year alone over $2.7B was successfully raised from a researched group of 308 crowdfunding platforms and it is expected to grow to $5.1B in 2013.

So, what does this mean for the future of seed and early stage financing – where angels and seed funds make most of their returns? Some will say that when unsophisticated investors enter into a new market it increases the likelihood of fraud and that the most promising startups still will go to traditional VCs for their industry knowledge and relationships. Therefore, the less likely to succeed companies will go to the crowds for funding, and by such, provide little returns.

The future of equity-based crowdfunding remains unclear, yet in my view, it’s inevitable and is critical that the Venture Capital Community understands its potential, its impact on the existing VC models and, most importantly, that we take a leadership role by providing guidance and direction.

While many professional investors remain concerned, many questions remain unanswered:

• Appropriate company reporting requirements;
• Status about the Audited Financial Statements and associated costs;
• Share categories and voting rights, or voting trust;
• Issues related to dealing with a large number of small stakeholders when the time comes to do a subsequent financing round or negotiate a sale of the company;
• The practically inexistent secondary market to support consolidation of shares and liquidity;
• The limits in terms of investment size for both an investor and the company;
• And the list goes on, and on, and on…

It is yet to be proven if equity-based crowdfunding will create a much more efficient early-stage capital market. But later this year, we will start hearing about some extraordinary tech companies literally “jump” from a crowdfunded seed stage to a late stage financing round – both in size and valuation. That will spark even more interest for this new type of financing.

 ***

Not that different from today’s “democratization of financing”:

Back in 1996, when the Media moguls met with a round table of early bloggers to better understand the “Web” phenomenon and what was behind the “democratization of content”, not one took the discussion seriously. Understandably, how could non-professional writers with a simple Internet access ever be able to compete with the massive, well funded, profitable and extremely well organized network of Media companies?

Impossible, is what they said!

]]> http://inoviacapital.com/2013/05/when-crowdfunding-hits-home/feed/ 0 http://inoviacapital.com/2013/04/do-vcs-bring-any-value-beyond-cash/ http://inoviacapital.com/2013/04/do-vcs-bring-any-value-beyond-cash/#comments Thu, 11 Apr 2013 11:04:35 +0000 Shawn Abbott http://inoviacapital.com/?p=5658 More]]> Let’s face it! Cash is the first and last reason entrepreneurs connect with VCs. And the VC model is based on returns. So how do investors differentiate from each other and attract entrepreneurs that can generate the best returns? By going beyond being a cash-dispenser to create value through knowledge sharing and connections. Getting portfolio companies to leverage each other’s learning is a challenge worth the rewards when done right.

The recent iNovia CEO Summit brought more than sixty of our CEOs, Founders and Partners together in New York, where we got the conversation started (here’s proof!).

I distilled some of the key learnings from each speaker:

Dan Martel, Clarity.fm, Flowtown (Demandforce)

• “Be uncomfortably narrow in the problem you solve” has particular significance for me because I’ve seen so many folks fail by trying to be all things to all people.
• “Take 52 shots on goal”, where Dan helped us think practically about rapid – one week long – learning cycles.
• “Get the Measure-Try-Test” cycle going as quickly as possible, use Mixpanel or Kiss Metrics

Alistair Croll, coauthor of “Lean Analytics”.

• “Metrics are like a stress ball: the metric you squeeze bulges the related metrics.”
• “Don’t establish metrics unless you’re prepared to act on the results!”

Yona Shtern, CEO of Beyond the Rack

• While we all instinctually focus on people’s aptitude when hiring, it’s attitude that gets people fired thus he advised to turn that around and make attitude a key hiring criteria.

Kipp Bodnar, Director of Marketing for HubSpot

• Inbound marketing is a key topic for all our startups, Kipp challenged us to think about, “Renting rather than owning your market’s attention”.

Denis Grosz, SEO Yoda

• “SEO should augment your customer acquisition strategy, not BE it. Budget a year to build your rank and don’t bother unless (a) your vertical has meaningful query volume, (b) competition isn’t extreme, and (c) Google is unlikely to compete.”

Michael Litt, CEO Vidyard

• “Video and Social are like peanut butter and jelly”

Rahul Sood, GM & Partner, Startups at Microsoft

• “Think Big, act small.”

Ray Muzkya, Threshold Impact

• “Humility is internal honesty. Integrity is honesty demonstrated externally”

References:

www.linkedin.com/in/dmartell

ca.linkedin.com/in/alistaircroll

www.linkedin.com/in/kippbodnar

www.linkedin.com/in/denisgrosz

www.linkedin.com/in/voodooftw

ca.linkedin.com/pub/ray-muzyka/0/435/bb/

In fact, the pilot simply didn’t put enough gas in the tank.

Pilots are given to dissecting accident reports in a cold, analytical manner, not for lack of empathy but simply due the overriding imperative to learn from the mistakes of others. Starting a mission without adequate fuel is akin to starting a company without enough cash in the bank. Given good management of the situation — and a board that knows how to operate — there is no reason for it to cause loss of life.

I can assure you that no engine start happens on a casual, “that should be enough gas”. For me, fuel is a, “stick my finger in the tank, do the mental math to measure, calculate range in gallons then a cross-check in pounds, write it on the day log and sign my name beside it” item. The NTSB cited fatigue as a contributing factor and mistakes do happen. And certainly he may have allowed himself to be distracted by that addictive “bleep” of a text message at the wrong time. Humans do not multitask well. The accident report press release did cite distraction as having “likely contributed to errors and poor decision making”. But this merely started a chain of events that warrants closer inspection.

As VCs, we’re similarly diligent about a capital plan for our investments, including building effective syndicates that can accommodate the kind of contingencies that we’ve learned to expect in building category-leading company.

This initial error was compounded by a failure to monitor the fuel level and act accordingly. Fuel is not a one-time checklist item prior to each flight, piloting is a constant review of assumptions and mental preparation of Plan B. And Plan C. And Plan D.

This is like that part of the board meeting where the independent director — having drank less Kool-aid than the CFO — winces at the CEO’s revenue hockey stick and asks, “exactly how long is our cash runway if this miraculous jump revenue doesn’t materialize?”. That’s called doing the range calculation.

Is the weather still adequate enroute and at my destination? What if I don’t get the airspace clearance I’m looking for? Are my instruments all giving me valid information? Does everything sound right? What’s my alternate if headwinds increase my estimated time enroute beyond the threshold? How much daylight do I have left? Is there any traffic on my course? Does my fuel consumption match what it should be? What factors would need to collude against me to compromise my legal minimum 20 minute fuel reserve on landing?

Are customers really delighted and likely to continue buying our product? What if Google decides to compete in our sandbox? Am I getting the straight goods from the CEO or do I need to go talk to a couple VPs? How long is our revenue runway if version 2.0 is delayed another quarter? What milestones must we hit for new investors come to the table? What “soft landing” exits are available if we can’t hit those milestones? 

The NTSB report notes that the pilot did become aware of his fuel level, and in fact reported that he had more fuel than he knew he had to the base operator. I’ve seen people tell a “white lie” so as not to look stupid, but clearly he should not have started the mission. It’s funny how a benign error can become an emergency when we succumb to that human foible of wanting desperately to look good at all costs.

This is the second board meeting after a fundraise, where the CEO knows the current year plan isn’t going to happen, but fundamentally the business still has every reason to be winner in its category. Why bother the board with minor details that shouldn’t ultimately affect the outcome? Experienced board members are thinking, “What acquirers have we built a relationship with?”

Now the pilot made a decision to take-off on the second leg of his mission, with three innocent souls on board trusting his good governance. Knowing fuel was inadequate, he changed his destination to a closer airport with fuel. But his only closer option was a mere 2 minutes closer than the original.  He must have been in a cold sweat, doing the fuel calculation every 30 seconds or so, hoping rather than knowing that it would be enough. And perhaps spending more mental energy thinking about how to not be caught having allowed the situation to get this far rather than focusing on how to not let it go any further.

At this point, it’s like the board that secretly knows the plan is flawed, but the CEO is putting up a good front and shows huge passion for one more pivot to a new business model that will really pay off. Everyone agrees it’s tight, so in a decisive act… management agrees to cut expenses by, by, by 10%!. 

As you might expect, it’s generally straight-forward to land a helicopter almost anywhere if there is a problem; it’s actually unlawful not to land immediately if the low fuel warning light illuminates. Ah, but it is very hard when you’re close to your goal and the whole team is mentally committed to Plan A.

Board members are wondering, “What would a wind-down of operations cost? What fiduciary obligations are outstanding?”

The pilot did not land. He kept flying when the machine when told him it was out of fuel. He was only one mile from the airport when it suddenly became very quiet.

I really hate it when a CEO suddenly gets very quiet. Then comes the emergency board meeting where everyone realizes there was no Plan B. 20-20 hindsight reveals that it was a “bet-the-farm on a long shot”.  Too late for a “soft-landing” sale of the Company because the engine is no longer producing power.

Unlike a startup out of money, helicopters actually glide quite nicely. Provided the pilot knows what to do, has practiced recently and has some favourable terrain in mind. Now landing without power is a sphincter test to be sure, but I’m baffled as to why this pilot didn’t have the wherewithal to enter an autorotation. No you can’t get to your goal today, but everyone gets out alive and the aircraft may even fly again.

If a board has the integrity and experience of winding down a company, I’ve seen everyone walk away without any lawsuits or blood on the floor. Unfortunately that requires skilled operators around the table, else the aircraft stops flying rather than being guided to a nice power-off landing. This is a sale of assets. 

I am in no position to judge a professional who has paid the ultimate price for his mistake.  I’ve reviewed the report over and over to ensure I won’t fall prey to the same sequence of events. And I believe that any pilot who truly internalizes this tragedy can escape a repeat of it.

The corresponding question becomes, can we internalize the spectacular startup failures we see in such a way as to assure the companies we’re involved with don’t fail in the same way?

Another thing that one needs to know about a position in venture capital is what environment you will find yourself in. If you join a large fund ($500M+) in a junior role you will likely be one of many Analysts or Associates and do a ton of research, building spreadsheets and administration. This is not going to look much different in a smaller fund, however, within a smaller team you will also be directly involved in investment discussions, interacting with portfolio companies and working directly with the partners in the fund. We believe that personal growth is built on being challenged, supported and mentored by individuals with an interest in your success. iNovia currently has an investment team of 7 members that work closely together and push each other to improve everyday. You will work closely with this team out of our Montréal office.

Rather than list a bunch of qualifications and skills for an Analyst we thought it would be more valuable to describe what an ideal team member looks like to us.

• The idea of staying up late building a spreadsheet model sounds like a great way to spend a night.
• You can defend what a reasonable revenue multiple is for any business.
• You have worked in a startup (bonus points!) or have strong aspirations to do so in a couple of years.
• Without being told, you implement a new CRM for the team because the current one was just too inefficient.
• You do a full market assessment before buying any product.
• The idea of having a ‘normal job’ is not very appealing.
• You are not a “Know-it-All”, but rather a “Learn-it-All.”

We recognize how important every person is in a small team. Not only are we looking for an extraordinary individual, but they have to be a fit with our team. We encourage any interested candidates to check out our team, portfolio and ramblings before reaching out to us. We look forward to hearing from you and meeting the next iNovian!

All interested applicants can reach us at build@inovia.vc.

We all know the Hustler. Relentless in connecting with people, customers, partners, investors, etc. Always at every event, following up on every lead and never taking no for an answer. You give them a lead and they turn it into ten new opportunities for their business. They will iterate through their MVP (whoops, I just used a buzzword) 20 times to reach product-market fit if they have to. They never give up and their tenacity is off the charts.

Like most buzzwords, they start off with good intentions. There is nothing wrong with the Hustler. In fact, I wouldn’t want to invest in, or work with, anyone that doesn’t hustle! But, being a Hustler is not necessarily going to lead to success on its own. In fact, it can have the counter effect of resulting in a very inefficient way of building a company.

The entrepreneurs that I have come to truly respect and admire have a characteristic that hustle can’t replace. The only problem is I don’t yet have a buzzword to describe so I will just use this:

savvy /ˈsavē/ : having or showing perception, comprehension, or shrewdness especially in practical matters

The best entrepreneurs have an amazing ability to navigate a startup through all the ups and downs, risks and opportunities and challenges it encounters. They are never caught off-guard by a development and always have a plan B. They can spot opportunities and paths to take that most can’t. Having an engineering background I often think about making things efficient. Savvy entrepreneurs are just that – efficient. Where a pure hustler is running around trying ten different approaches to a problem the savvy entrepreneur has a calculated plan that nails it in the first couple attempts. The savvy entrepreneur uses their time, relationships and public appearances very stringently. They don’t take a ‘throw it at the wall and see what sticks’ approach. They are thinking three steps ahead all the time. They know the next steps they have to take and aggressively push forward.

In my experiences these entrepreneurs are not that common. If the low costs, low barriers to entry and ability to iterate quickly have had one negative effect it is the belief that a successful startup can be the result of a bunch of experiments and hustle. Sure this works sometimes, the startup world is built on outliers. But, these are just that – outliers. The majority of successful companies are built by savvy entrepreneurs who know their domains, have an unfair advantage and are always three steps ahead of everyone else.

OMERS Ventures led the round alongside current investors iNovia Capital and SoftTech VC – further reinforcing its commitment to the Vidyard story. In addition, Jill Rowley participated with a personal investment in the company. The Series A financing positions Vidyard for continued hyper growth as they fuel the demand from marketers for powerful, actionable data for their video content.

“Our journey to this point has been nothing short of remarkable and I’m happy to announce that we’ve secured Series A financing from an amazing group of investors. This deal comes on the tail of significant momentum as we continue to develop the “video marketing platform” category. We are now poised to grow our market leadership via world-class product integrations and a continued focus on enhancing the features that our marketers crave,” said Michael Litt, founder and CEO of Vidyard.

By breaking open the “black box” of video with their industry-crushing analytics and built in marketing tools, Vidyard is transforming how companies use video content to grow their businesses. Marketers can now measure, optimize and drive their video campaigns and content to generate more leads, convert more customers and deliver an even stronger ROI, all from one platform.

“Vidyard’s simple brilliance addresses a clear and significant need in a rapidly growing market. Michael Litt and Devon Galloway, Vidyard’s founders, took the initiative to develop a valuable and easy-to-use solution for a challenge they faced every day in their own businesses. Their deep domain expertise and applied innovation is what attracted OMERS Ventures to make this investment,” said Derek Smyth, Managing Director of OMERS Ventures.

Vidyard’s Series A financing comes on the heels of integrations with leading marketing automation platforms– Eloqua and HubSpot. Vidyard’s innovation continues to empower marketers with the most advanced video campaign marketing, measurement and analytics tools available today.

About Vidyard

Vidyard (Twitter: @Vidyard) is a video marketing platform that helps marketers drive results with video content. With Vidyard, customers can add video to their websites in minutes, get real-time analytics, syndicate video to social networks and YouTube, create calls to action, optimize search engine hits, capture leads, and brand their player skins all from one place. Anyone can try Vidyard for free at www.vidyard.com.

About OMERS Ventures

OMERS Ventures (Twitter: @OMERSVentures) is the venture capital investment arm of OMERS, one of Canada’s largest pension funds with nearly $61 billion in net assets. It is an initiative of OMERS Strategic Investments (OSI), an investment entity with a mandate to build long-term strategic relationships with like-minded partners. As both an institutional angel investor and a later-stage investor, OMERS Ventures is looking for successful companies with significant growth potential and market opportunities. We are seeking like-minded partners with a shared vision of building a vibrant and successful knowledge economy. For more information,  visit www.omersventures.com.

About iNovia Capital

iNovia Capital (Twitter: @iNovia) partners with exceptional entrepreneurs to build successful companies in high-growth sectors. The team is comprised of entrepreneurs and sector experts focused on Mobile, Internet and Digital Media. iNovia has $275M under management across three seed and early-stage funds. For more information, visit www.iNovia.vc.

About SoftTech VC 

SoftTech VC is one of the original micro VC firms, founded in 2004 and backing over 135 early-stage start-ups. Based in Palo Alto, the firm manages two institutionally-backed funds and invests in Silicon Valley, New York, Southern California, Boulder and Canada.  SoftTech VC is among the most active investors in early stage consumer Internet and B2B startups, consistently investing in 20 new opportunities a year.  We seek great entrepreneurs, differentiated products and large market opportunities. For more information, visit www.softtechvc.com.

Those ten words will resonate with me forever.

Those ten words explain why we first funded Vidyard and why we re-invested now.

Those ten words remind me that we spend too much time glorifying investors and entrepreneurs. We don’t talk enough about the team that builds product, sells a vision, supports customers and provides the foundation for future growth. We don’t spend enough time appreciating the fact that the brain trust of a Company extends far beyond its board room. We don’t give enough credit to where it’s needed the most – to the men and women who work their asses off to make the rest of us look good.

Yes, we have invested millions of dollars in Mike and Devon. But, just as importantly, we’re investing in Tyler, Blake, Steph, Ian, Mitch, Cody, Kristina, Amar, Padraig, Brian, Amir, Matt and the dozen or so other people who’ll share an @vidyard.com e-mail address over the coming months. We aren’t investing in a product demo or PowerPoint slide or financial model – we’re investing in a team that we think can continue to grow, execute and mature into a category defining organization.

Looking back on the last two years, it’s amazing to see how far Vidyard has come as a Company along all three of those axes. This is a special team doing some really ground-breaking work. I’m no longer surprised by their speed, success and ambition. If you knew the calibre of talented individuals that’s been assembled together under one ubiquitously-painted green roof in Kitchener, you would share my sense of optimism.

We’re excited to have everyone at Vidyard as part of our own iNovia family. There’s obviously still a long road ahead for all involved in this endeavour, but this financing shows we’re on the right path with the right team. Thanks to everybody at Vidyard for letting us along for the ride.

Vidyard Raises $6M Series A Financing

The funds will go toward marketing Pressly’s platform, which automatically converges numerous online content sources, such as websites, blogs and social channels, into an interactive mobile experience for tablets and smartphones.

“Our product gives businesses a fast and easy way to take their huge investments in content to mobile users everywhere, in a beautiful, highly engaging way,” says Jeff Brenner, CEO of Pressly.

Publishers and marketers are struggling to capture the attention of a growing mobile audience. Pressly allows its customers to curate their own content from around the web, including social and RSS feeds, into a branded HTML5 web app, that their readers will experience from a tablet or smartphone browser, rather than downloading an app.

“In the time it takes to load a web page, you can hook your readers with an amazing mobile experience,” says Brenner.

This innovative way to capture mobile attention is what drew iNovia Capital and OMERS Ventures to Pressly in the first place.

“We know brands and publishers are looking for a platform to amplify their message on mobile devices – which is a far cry from the keyboard and mouse world. Pressly absolutely nails it with this product,” said Karamdeep Nijjar, a Principal at iNovia Capital.

“At OMERS Ventures we invest in companies we believe can become global leaders. We think Pressly has huge potential due to its innovative products, strong management team and continuing market traction,” said Derek Smyth, Managing Director of OMERS Ventures.

In stealth mode since 2011, Pressly has signed partnerships with leading media firms including Ziff Davis, The Economist and The Toronto Star as well as produced branded content marketing pieces for Global 2000 companies, such as IBM and Toyota. Last month Pressly started rolling out its platform to thousands of early beta users, and the response has been overwhelming from clients, said Brenner.

According to a study analyzing millions of mobile visits in 2013, clients using Pressly to power their mobile content can enjoy up to 10 times more page views, and 4.5 times longer visits on their mobile property compared to standard industry benchmarks.

Brenner says those numbers suggest Pressly is the perfect platform for organizations with a content marketing strategy, such as B2B marketers, as well as traditional publishers.

The cloud-hosted service is now out of beta and open to the public with a free 30-day trial. After that, businesses will pay a monthly fee between $199 and $499.

“We love that Pressly gives content publishers a low-risk, low-friction way to take their business to the mobile world, and experiment – the times are changing and that’s what’s needed to succeed,” Brenner said.

About Pressly
Pressly is a mobile publishing platform that gives publishers and marketers an easy way to engage a growing mobile audience. With just a few clicks, you can automatically converge your content from around the web into a beautiful, immersive mobile experience for tablets and smartphones. Trusted by major brands, B2B marketers and publishers around the world, Pressly is a powerful solution to take your mobile strategy into the future.

About iNovia
iNovia partners with exceptional entrepreneurs to build successful companies in high-growth sectors. The team is comprised of entrepreneurs and sector experts focused on Mobile, Internet and Digital Media. iNovia has $275M under management across three seed and early-stage funds. For more information, visit www.iNovia.vc or follow iNovia on Twitter at www.twitter.com/iNovia.

About OMERS Ventures
OMERS Ventures is the venture capital investment arm of OMERS, one of Canada’s largest pension funds with nearly $61 billion in net assets. It is an initiative of OMERS Strategic Investments (OSI), an investment entity with a mandate to build long-term strategic relationships with like-minded partners. As both an institutional angel investor and a later-stage investor, OMERS Ventures is looking for successful companies with significant growth potential and market opportunities. We are seeking like-minded partners with a shared vision of building a vibrant and successful knowledge economy. For more information please visit http://www.omersventures.com/.

Dr. Ray Muzyka has become an active participant in iNovia’s network. And now as a Venture Advisor, he is getting to know more portfolio companies as he advances his own mentoring and investing activities through Threshold Impact (http://thresholdimpact.com). Originally practicing MDs, he and Greg Zeschuk were the co-founders of BioWare and have recently retired as executives at Electronic Arts. They are already co-investors with iNovia and more recently both became investors in iNovia Fund III.

iNovia’s continuing focus on building digital media companies makes the connection with Dr. Muzyka a natural fit.  He was inducted into the Academy of Interactive Arts and Sciences’ Hall of Fame in 2011 for his lifetime of work in interactive entertainment as well as being named the recipient of the Lifetime Achievement Award from the IGDA’s Game Developers Choice Awards in 2013. Ray was named into Canada’s Top 40 under 40 in 2001, received Ernst & Young’s 2001 Entrepreneur of the Year award and the BDC 1997 Young Entrepreneur of the Year award, among other awards.

A true entrepreneur, Ray recalls what it means to work 20 hours a day and use a credit card to fund his startup. Now, in the case of Greg and Ray, their startup ended up being worth many hundreds of millions of dollars when acquired in 2008, and it also benefited from the investment of private equity capital prior to that exit. We believe there are lessons in that experience of great value to all our companies.

Ray’s experience overseeing such tremendous growth in company value, building teams from dozens to thousands across diverse international locations, working with private equity for investment, and managing public company activities post-acquisition, is a valuable resource for iNovia’s growth stage CEOs.

We are happy to have Ray join us as a Venture Advisor and excited to have him actively participate in iNovia’s inaugural CEO summit in New York on March 14^th!

Welcome to the iNovia network, Ray!

I had the pleasure of being part of yesterday’s CN Tower tech entrepreneur elevator pitch event: The Startup Festival Elevator World Tour. What a great event it was! And the pitches were done in THE most impressive elevator in North America – with over 350 attendees, 100 pitches, 12 elevator judges and the Nulman Duo (father and son, Andy and Aiden) doing the thing only the Nulman know how to do.

A question that kept coming up was: “So, what’s the best Elevator Pitch?” And truth be told, the best elevator pitch is the pitch that gets you that second meeting, the one you need and want! It’s the pitch that helps build a relationship with your interlocutor. The one that creates a “connection” between you and the person you are pitching to. That’s the best elevator pitch!

Obviously, some people are way more agile and comfortable pitching to people they don’t know, as easily as they are telling the story to someone they know intimately. Have you ever heard our Venture Partner and EiR Patrick Lor pitch? He is amazing, he gets to the core of the message extremely fast and efficiently and he gathers interest in a blink of an eye and quickly connects with his interlocutors. He has the ability to pick up someone else’s story, drill down to what’s important, what really matters, and within minutes, Pat regurgitates a business pitch better than the original one!  That type of skill set isn’t given to everybody and most of us must really work hard and repeatedly understanding what really needs to be shared, at what stage and how to share it while in a more comprehensive “story-telling” format.

But when you are in an elevator, with two camera crews, two investors, a by-stander and 58 seconds to pitch there isn’t much room to “story-tell” so it’s important to come across with the right level of detail, but not to enough to drown your interlocutor, and the key elements that will capture his or her imagination.

Here are a few key elements that should come across:

1. Skip the kind intros, jump into the heart of your pitch;

2. What are you offering? Describe the product or service;

3. What is the obvious pain or huge opportunity you are addressing;

4. Why this matters and who will pay money for it (business model);

5. If you have traction (customers) now is the time to name drop;

6. A 2-liner on what makes your team amazing;

7. Closing remarks. Answer the question: “Where is the magic?”
* Obviously, knowing who you are pitching to helps. By doing so, the inside knowledge or intimate understanding of what makes your interlocutor tick, allows you to instantly focus on the right interest cords. Knowing who you are pitching to basically increases your chances of building trust and interest quickly.

Of the 100 pitches, 6 finalists chosen by the elevator judges came up on stage and did a second pitch to the full crowd who then choose the best pitch of the day. The finalist were:

Dandy.co
Mejuri
Insta Radio
Sensor Suite
Shelf Life
Hover
Revelo Bikes

And I must admit, the winner, which was chosen by the crowd voting via SMS, did a fantastic job and simply nailed it in 40 seconds: Mejuri

At the end of the day, everybody should have a strong, clear pitch and should ready to share it at any moment. This pitch should be shared with your employees, investors, partners, clients, distributors, the pitch should be part of how you introduce your company.

Congrats to the Entrepreneurs, and a big thank you to Microsoft and the other #StartupFest sponsors, as well as to Phil Telio and his team, for a wonderful and utmost valuable event.

Check out Rob Lewis blog post on Techvibes: The International Startup Festival Brings New Meaning to ‘Elevator Pitch’ with World Tour

And don’t forget to register for the Startup Festival 2013 event, July 10-12th in Montreal.