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So you are taking over from the founder…
Canada abounds with great entrepreneurs for whom succession is the most significant future threat their companies will have to overcome: Magna’s Frank Stronach, Roger’s Ted Rogers, Bombardier’s Laurent Beaudoin, Four Season’s Isadore Sharp. When planned and executed well, as in the case of Microsoft and Dell in the U.S, or Biovail, Cognos, and Tundra in Canada, succession builds on the success of the founder and increases the company’s ability to create shareholder value. When not, it can have explosive effects as in the case of firms such as McCain’s and CARA.
DangleTech Admin
DangleTech
The Elusive Goal
There’s a saying in the VC business that “lemons ripen sooner than plums.” Fruit farmers know that lemons “show” earlier than plums. In the venture metaphor, the lemon among investments ripens (starts to smell) earlier than the plum, which takes time to ripen into a powerhouse. Sandvine in Waterloo received initial seed funding from Celtic House the week before Sept. 11, 2001 and achieved the elusive $100 million run-rate by 2007. That speed of ascension is impressive and rare in any geography, particularly in Canada with many fewer technology start-ups than the U.S. Memsic, a Boston-based Celtic House portfolio company, which has filed an S1 to go public, is expected to take eight or nine years to reach that run-rate. Vixs Systems, a Toronto-based Celtic House seed funded start-up, is expected to get there in seven or eight years. The question germane to a VC is, “How can I know in the early years whether a start-up should be scuttled to avoid wasting more money or strengthened with additional cash to continue its climb to $100 million?”
About the Author
Andrew Waitman is managing partner of Celtic House Venture Partners, specializing in early stage investments in high technology companies.
DangleTech Admin
DangleTech
Where is Scale?
No, I’m not suggesting we measure obesity in Ottawa’s technology sector. The scale I mean is the size-of-success scale, measured for startups in two ways, by revenue and market capitalization. They are of course related. Last column I put forward the thought that Ottawa could reinvigorate venture investment interest if we improved the risk/return perceptions of investors by demonstrating consistent and substantial (scale) success. I use $100 million in revenue as a benchmark for venture scale success. Ten startups of this scale in ten years would be a good indicator of consistency of returns from any region. Before evaluating the challenge of meeting these targets, consider this question. What high tech company (including life sciences) founded in the greater Ottawa area (including Gatineau) during the past decade has reached $100 million or more in revenue. Exclude companies such as Cognos, Newbridge and Corel, which are vintage 1980s. The answer, as far as I’m aware, is none. Do this exercise for any major city in Canada. It’s a short list. Why?
About the Author
Andrew Waitman is managing partner of Celtic House Venture Partners, specializing in early stage investments in high technology companies.
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Searching for Certainty in Hiring
You hear the word ‘certainty’ a lot these days. Hockey fans were deprived of their favorite pastime for an entire season as NHL owners and players waged labor war on the issue of ‘cost certainty’. In the United States, the ‘politics of certainty’ has become one of the defining dictums of the post 9/11 federal administration. The word punctuates the letterheads of scores of companies, as well as the mission statements of hundreds more. Legal proceedings are decided using the yardstick of certainty, and finally, better than any other word, certainty describes the relationship we expect with our essential service providers, regulators, institutions and corporate leaders.
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From Guesswork to Assumptions… The peculiar way we select our political leaders
The federal Liberal Party will soon elect a new leader. The contest is intriguing as it marks the first instance in many years in which there is no clear favorite among the many contenders. While the process by which party delegates will render their decision is well publicized, the criteria they will use to make that decision is not. Ideology, vision, intellect, and personality are invariably in the mix, as are judgment, discipline, decisiveness and drive. It can even be assumed that ‘darker’ attributes such as ruthlessness, guile and cunning will play a role as the ‘elbows come up’ in the corners of political competition. However, assumptions will have to suffice, as a framework or even a useful list of attributes by which to compare candidates is elusive. This is dangerous as guesswork has a tendency to produce all variety of surprises. Consider Canada’s two most recent Prime Ministers as illustrations.
DangleTech Admin
DangleTech
Marketing Outlook 2008
This comprehensive online study was conducted in partnership with e-Rewards and co-sponsored by Deloitte Consulting LLP, Marketo and TechTarget. Marketers in companies of all sizes address the challenges they face in the year ahead along with the operational and organizational changes needed to drive performance, efficiency, accountability and value.