Funding: What’s in it for me?

On Tuesday, some members of Victoria’s tech community had their turn to experience a boot-camp style introduction to venture capital, courtesy of the California Market Access Program for Canadian Technology Companies (via the Canadian Trade Commissioner Service). See this PDF brochure for additional info, as well as previous posts on Techvibes announcing the program. Calgary already checked in how that city’s Sept.11 event went.

Victoria was the last stop on the program’s five-city tour. Although I didn’t attend this boot-camp myself, I caught up yesterday with Rian Bowden of Daily Splice, who did attend.

Here’s a nutshell recap: Eighteen Victoria companies participated. Some of the companies Rian recalled included start-ups like Oprius and Projjex, as well as Dark Matter Labs, and I believe Rian also mentioned EDS Advanced Solutions, a more established company. Each company was represented by several people, which brought total attendance to around sixty.

After an initial hour or so of presentations from the boot camp hosts, the day unfolded: the eighteen companies divided into two groups of nine, as eight judges (four local, four from California) listened to their pitches. Each company had ten minutes to present – with an additional five minutes allocated for feedback, mostly couched as potential investor questions.

Along with the expected, “What’s the business model?” question, another key question – which apparently had the most potential for throwing people off-balance – was the forthright investor question, “What’s in it for me?” That is, how much do I (as a potential investor) get of your company, if I invest in you? Most of the companies in the room had a clear idea of what the dollar amount was that they were looking for (it varied from between $300K to $1M), but answering what might be called the equity grant math question was harder to pin down.

Overall, it seems Victoria participants made a good impression at this event. In turn, the companies also came away with lessons on when and how to pitch, and that VC money isn’t the only source of funding. There are angel investors, family, and friends, small loans, boot-strapping, personal money, and – in Canada – government incentives (see the SR&ED, pronounced “shred,” program, for example).

But regardless of the source, proper funding remains an issue for any business. If you’re growing a company into that next level, it’s hard to compete when you’re underfunded, and hard to grow to that next level without burning out (or starving) first.