2nd Year, Venture Capital… Growth Objectives!
I recently read an article about a very cool startup based in Montreal named Localmind. The article was featured in the Gazette and was announcing that Localmind had received funding for 600,000$ and will be moving its HQ to San Francisco. Great News! Good Job!!!!!
Shortly after reading this news, I looked back at the VC Industry here in Quebec – more specifically in Montreal. The industry is quite active but for a specific business segment: companies with usually over a 1M$ in annual revenue – operating in a specific manufacturing industry with a core unique technology (Averna, Mechtronix Systems, and the list goes on).
Is this really Venture Capital? Or regular financing program. In Montreal, Institutions that are suppose to be doing VC are CDPQ, BDC, Roynat, FTQ… Other than these institutions, the private sector become the number one resource.
I don’t believe that we have a real VC industry here in Quebec for startups in the media/internet segment (and we all know that Montreal has a lot of startups – I recall – Montreal Startup Festival). VC are usually critical in the second, third and sometime fourth year of operation for a startup. I noticed that we have a lot of seed funding programs: Year One Labs, Founder Fuel, CYNBF, BDC, FCAMC, but we do not have anything for the 2nd year, third year, and sometime the fourth year. This is where, most of the time VC is required to maintain growth or developement. Banks will never fund any startups unless there are assets to back the funding (which is rarely the case).
Planning Media was funded by BDC (Banque de Développement du Canada), CYNBF (Canadian Youth New Business Foundation) and a local community partner. After one year of operation, the company is now relying on private investors to fuel new projects , new online performance marketing and lead generation applications, and to ensure a strong growth strategy.
This article points a specific problem in the life of a startup. The goal: finding a solution! I am currently working, with a couple of partners, on a project called: Y2, a non profit organization to build a strong and real VC industry here in Montreal for helping startups in the second, third, and maybe fourth year of operation. I believe the seed capital industry is well served, now let’s look at what’s next!
