The TSX Ignite live event series kicked off in Toronto earlier this week. The events have taken place across the country since 2014 with the expressed goal of bringing advisors and business leaders together to help develop small and medium sized enterprises.
Consisting of of six rapid fire panel discussions, the event canvassed every part of a business’s life cycle, from pitching to investors, the conversion from startup to a “legit” company, looking for funding, unorthodox methods of funding, and the fine points of when and how to approach acquisition. The event then closed with a keynote interview between Dax Dasliva of Lightspeed POS and Pamela Ritchie, the anchor of Bloomberg TV Canada.
After welcoming remarks from Michael Kousaie, the business development head of the TSX, the first panel on how to deliver great pitches was underway. Panelists Miriam Tuerk (CEO of Clear Blue Technologies) and Kristen Dickson (VP of Technology and Financial services at NATIONAL Equicom) were moderated by Roger Chabra, a partner at Rho Canada Ventures.
The secret formula to a great pitch was not uncovered during the conversation. What became clear is the beauty of a pitch is in the eye of the investor. Panelists and the moderator disagreed on many fundamentals of pitching, from the simple, when to include a team slide, to the more abstract, like how much personal narrative should be involved in a pitch.
Some things though are steadfasts truths in pitching. Customized pitches for each audience, for example, but only up to a point. “Don’t reinvent your pitch for every audience, that way you’ll never master it,” said Tuerk.
After a thorough but quick discussion, the next group of panelists were on the stage with a new moderator. This time it was David Lloyd (Senior VP Global Service Delivery & Managing Director at 7) and Jesse S. Moeinifar (CEO and founder of ViaFoura) with Erin Bury, the managing director at 88 Creative as the moderator.
The focus of the conversation was how to effectively transition from a startup to a ‘legit’ company. Conversion from a startup to a company is a nebulous idea, but both panelists had succinct answers. For Lloyd, financial independence and operating on revenues rather than investment is what establishes a company as legitimate. “When you start filling your sails with the wind you’re creating, you’ve crossed that chasm of legit,” he said.
Moeinifar was tempted to say a definitive answer, like a million dollars a year in revenue, but ultimately conceded that, “Your clients force you to become a legit company. When we signed the CBC, they forced us to mature very quickly,” he said.
What both panelists agreed on was the real difference between startups and legit companies, outside of extraneous technical differences, is a team that can work well together for the long term. For Moeinifar, that means having key performance indicators so that even people who are with a company for a long time, including founders, are held accountable. For Lloyd, it means that having people who can say no to you, and who can engage in productive debate. “It’s easy to do a lot of stupid things with $10 million in the bank and try and take things in a hundred different directions,” said Lloyd.
The next two panels both concerned funding. First was Grand Lui (Collins Barrow Toronto LLP), Henry Harris (Gowlings WLG), Bill Demers (EY), Adam Kline (McMillan LLP) and moderator Robert Peterman from the Toronto Stock Exchange and TSX ventures, to discuss preparing to raise money.
The discussion started with Demmers sharing the results of a survey EY conducted about the non-financial reasons investors chose not to invest. The far and away number one answer was the credibility and quality of the management team.
The other factors that entrepreneurs should prepare when gearing up for funding rounds is corporate governance, and a solid understanding of their company’s financials.
“Good governance isn’t just necessary to run a company, it can add value,” said Harris.
Grand Lui was especially ardent on entrepreneurs knowing the financials of their company cold. “Align investors not only from a passion perspective, but from a quantitative perspective. Think about key metrics and a detailed business plan,” he said.
“I can guarantee you’ll reduce the diligence time if you have clean information,” Lui added.
The fourth discussion centered around funding again, but this time avenues of funding that many entrepreneurs might not consider. Will Hutchins went into tax credit financing as an alternative to traditional equity investment. Annie Theriault explained the benefits, and restrictions, of paying royalties in return for capital, as her company, Greenville Strategic Royalty Corp. does. Other options presented included listing your company in the TSX private markets, as explained by Zulf Karim, and government grants, Which Zoltan Tompa, from Sustainable Development Canada, said should be leveraged for long term innovation strategies.
The final panel of the day was between Paul Crowe (BNOTIONS/Symbility) and James Swayze (Symbility), moderated by Eric Lam, a Bloomberg reporter.
Crowe’s company BNOTIONS was acquired by Symbility in June of last year. Much of the conversation focused on the minutia of that specific acquisition, but offered insight to entrepreneurs as a group.
For Swayze and Symbility, there must be copasetic culture between the two companies in an acquisition. “People are critical to the business. Ultimately it needs to come down to a cultural fit.” Swayze said. He added later that during the grueling negotiation process, it’s even more crucial to look beyond the paperwork at the people involved. “A deal has to excite both parties. You can get so caught up in the deal, and you haven’t really looked at the people on the other side. It’s important to think of integration,” he said.
For Crowe, one of the most surprising part of the acquisition process was how lengthy and labour intensive it was. “It was a very busy six months keeping everything going with the business and going through the due diligence,” he said.
After two information-dense hours and 14 speakers, Dax Dasliva and Pamela Ritchie took the stage for the final keynote interview. The interview focused on Lightspeed POS’s success and growth over the past few years. Dasliva, whose company raised $61 million last year and is rapidly expanding, said that Lightspeed would be love to be IPO ready, “in a few years.” The pair also touched on the blending between physical retail space and online shopping.
Toward the end of the entire event, Dasilva offered his path, which included seven years of no outside funding, as a model for entrepreneurs.
“Seven years of bootstrapping might not be a reality for everyone, but I think it’s smarter to learn who you are and create your own revenue stream,” he said.
Photo: Rick Chard