To VC or not to VC

Much has been written about the challenges many startups face in finding seed and early-stage investors for their ventures.  The Internet crash indeed scared away many Angel investors while forcing many venture funds to shift their focus to investing in more mature companies.  Even to this day, Canadian VCs who call themselves “early-stage” investors are more likely to gravitate towards companies with experienced management teams, a mature product and a business model with a proven path to revenue and profits.  To me, this does not define “early-stage” investing. 

Entrepreneurs often find themselves frustrated with the financial community and the lack of risk tolerance that comes hand-in-hand with the startup process.  Are there other alternatives?  Do the risk-takers still exist?  I’ve always tried to get out our message out that a viable financing alternative does exist.  Our team strives to find these very early companies with passionate entrepreneurs or technologists who believe in a market opportunity.  Do we need an experienced management team?  Not initially.  Do we need a completed, scalable solution?  Not yet.  Do we need a proven business model?  Eventually.  That doesn’t sound like a typical VC talking, does it?  I’m proud to say that our firm is far from typical. 

At Brightspark, our bets are placed on world-class technology which, we believe, forms the heart of any great software startup.  The reality of focusing on seed investments is that we quite often meet domain experts who are world-class experts in technology, but who don’t often have the skill or the desire to be the CEO of a company.  Without a management team or a revenue stream, these experts are generally turned away from traditional venture capitalists for being “too early”.  I like companies that are “too early”.  To me, that is what our whole business is about - finding and supporting the best and the brightest and helping them to get started. 

We need the next Canadian success story…and it all starts by taking a risk and placing a bet.  We’re up for it…are you?

Comments

[Jeremy Wright]

Sounds like the perfect kind of attitude to me. Almost comes back to "find the right team, help them find the right market and they'll deliver the right product."

Not a Canadian VC type of perspective, but certainly one that's becoming more and more pervasive.

Good stuff :)