I’ve made a mid-life career as a chief executive seeking equity capital for Canadian start-ups in knowledge-based sectors like biotechnology and medical-and-assistive devices. These are established technology categories yet where we have still to prove that Canada has what it takes to create enduring world-class enterprises. With associates, I have recently begun sifting through our shared history of experiences with venture choice and financing to surface lessons that can be applied to promising newer categories where the verdict on how well we will do is still open – areas like nanotechnology, cleantech and Web 2.0.

Along with cash, venture capital has commonly promised counsel and ‘connectness’ to a community. But in our experience their return-on-equity model as traditionally practiced rarely delivers much beyond hard dollars. They leave unsaid that it’s too costly for Canadian VC firms and angel organizations to acquire the bandwidth to deliver true added value to their investees in ever more complex and diverse technology marketplaces. By global standards we too often innovate in a relatively small and depressingly thinly distributed expert community.

A consequence of this dearth of deep sector savviness is the way a slick business plan has become the sole entry point to the queue for equity investor attention. Getting that done too often gobbles up scarce time and resources that could be better spent on getting on with it – as Guy Kawasaki said so well in his great short book: Art of the Start. Worse, the growing trend to support business plan competitions, supported by universities and governments, can convince beginning entrepreneurs that the business plan lottery is THE route to making it, rather than getting out to hear about actual pain points and delivering solutions back in the garage, basement or lab!

Equity investors, start-up consultants and advisers all need to focus more on helping understand how to support inventors connect with whatever they need to succeed in today’s wired and online world. Clients will show up from that pool. How many of the great successes of the past came from guys who did the best Exels and PowerPoints?

Engineers and technology geeks are most often introverts – so why judge them on their ability to play the extrovert by dancing the best behind a podium? So let’s those of us with experience get out there more in person and online to seek out the shy and be simply helpful!

On one hand we have a sea of small businesses focused entirely on their own survival with very little capacity to even consider the needs of others. On the other hand we have a wealth of very successful companies that have grown so big and so distant that their founders and employees are really no longer a part of the community.

There are some gems in this ‘community’ that go way out of their way to help, but in the grand scheme of things, our tech members have a long way to go to becoming a true ‘community’. What we appear to lack is a committed social conscience where we put the needs of each other (tech and non tech) ahead of ourselves. It’s a cultural value that needs to be driven and reinforced.

I’m afraid that our tech community has demonstrated very little ability to do that lately. I have seen very few of our members do anything that was not self serving. I sit on many local charitable committees and there is a disgusting absense of tech people getting involved in either a volunteer basis or a financial basis.

What we need in our tech community is a cultural transformation. We need good leadership and extended management that will demonstrate, encourage and reinforce the value of giving. We need leadership that understands that in order to have a healthy future, we cannot forget to take care of the internal relationships. And most of all, we need leadership that will take action.

I want to thank you and the team at TechCaptital for continually being active in our physical community and our tech community. I hope by your example others will join in.

People, I believe, are naturally inclined to “want to help” but get stuck in the “busy trap”. For me personally, over the last year, I have become aware that I need to be intentional about creating more margin in my life so I have the space and time to both explore and “give back”, some of that in ways you outline here.

It’s amazing what can be discovered when there’s time to explore!

Glenn

We’ve been strong supporters of Funders & Founders get togethers, the Camps (Bar, Startup, Facebook, Demo), Montreal Tech Entrepreneur Breakfast Meetup, Blitzweekend, and we are now helping put together the Blitzweekend 2.0 (Montreal Startup Weekend and the Ottawa Startup weekend).

Taking action!

In the online technology space this is a basic necessity, having worked on this for some of the world’s biggest technology brands. I have actually seen this drive from 20% to nearly 100% of a product’s revenue and profit. And, on a more personal note, quite recently I experienced first-hand the overwhelming value and power of an amazing network of smart business contacts, friends and associates.

@JosephFung – I might just tackle that little project. Very interesting idea and I find myself with a bit of time on my hands and some pent-up need (and ability) to add real value to an ecosystem. What about a version on Sugar or CRX that could be open sourced?

“I am proposing that we spend a bit of quality time, interacting with entrepreneurs in our sectors and connecting them with potential customers/partners when/where we feel comfortable doing so”

As somene that’s been on the other side of the table – every time I’ve chatted with a VC/Angel it’s been specifically looking for that. Yes money is nice, but most of the time an entrepreneur will quickly realize they aren’t ready for cash yet, and just need some insight, validation of their ideas, and some introductions.

Your comments about opening your networks apply to more than just the VC scene – most business owners (including the ones funded by VCs) would agree that by providing a lot of value to their target customer base, they improve their customers, their industry and their position in the industry. It’s a win-win-win.

Finally – regarding your question about identifying targets, this definitely can be automated. Social Networks + Quick & Dirty Semantic Dictionary + NAICS/SIC Code Business Listing + Sales Force API = Automated Lead Gen Solution. Just need someone to find the time to put the code together.

Capital is only one piece of the puzzle. Starting to layout the pieces are key.

* Mentorship
* Networking/Connections
* Attention
* Training
* Goals and Timelines

I’ve started to think about what it takes to leverage resources locally (my thoughts http://www.startupnorth.ca/2009/04/13/incubators-accelerators-and-ignition/ ). And you are 100% correct that we need to help connect entrepreneurs and build successful companies. The connections are for business development, hiring, marketing, etc. We so often fall back on a consulting mentality, i.e., if you want access to my network you should pay me to have it. This is just wrong. A percentage of something worth zero is worth zero. We need to encourage and enable young entrepreneurs.

But this requires that they have a developed product and they need help getting to somewhere bigger.