Giving innovative entrepreneurs a kick-start through business incubation and early-stage venture capital is an investment in the future, a Calgary conference heard last week.
The two-day event, hosted by the Conference Board of Canada, featured speakers from the private sector, research groups, universities, and community-based incubators including Calgary Technologies Inc. – all talking about the value incubation and new venture research can bring to young companies.
“Almost every city in Canada has the same question – how technology commercialization and technology-led economic development can play a role the way the economy is changing,” said Bob Armit, organizer of the conference and an Ottawa-based technology business consultant.
“Part of it is incubating new firms, helping the firms in their first two years in terms of administrative backup and support for their entrepreneurial efforts. It gives them a better foothold . . . we know that the failure rate in new companies is very high, and it’s important to help them get beyond that two-year period so they can achieve their objectives and become viable entities.”
Dave MacKillop, manager of CTI’s incubator, notes that the 20-year-old organization is getting more aggressive in the financing side of incubation by helping marry early stage investors to small companies and entrepreneurs, and by setting up an angel capital network.
The incubator already offers a variety of business-development services, like sourcing capital, mentoring and coaching and client marketing, to a stable of clients at the 120,000-sq.-ft. Alastair Ross Technology Centre located near the University of Calgary.
The downturn in the economy has meant more vencap money is “sitting on the sidelines,” MacKillop said. “Most of the venture capital companies are stepping back and managing their portfolios.
“But they are getting lower valuations for their companies on the front end, and from a vencap investor perspective, that means opportunity.”
More than 90 people attended the conference at the Palliser Hotel to hear presentations on how private and community incubators are increasingly forming wider partnerships to help promote new ventures.
Bill Croft, president emeritus with CTI, noted that different models of incubators are offered by private venture capital companies, universities, communities and federal research laboratories, each working to leverage opportunities, create jobs and diversify economies. “Overall, it’s clearly one network that needs a lot of collaboration,” he said.
Providing a viewpoint from the private sector was Stephane Boisvert, the general manager of Emerging Markets and Venture Relations with IBM.
Boisvert said IBM is seeking to help entrepreneurs by exposing their projects to a global presence through Big Blue’s international portfolio of corporate customers – and by working with vencap firms, IBM can build its own customer base.
“I’m a big believer that communication will basically fast-track some great ideas across the country,” Boisvert said, adding IBM has built long-term relationships with vencap companies that can help commercialize technologies. “I believe that an entrepreneur cannot go solo anymore,” he added.
“We need to stimulate investment at the early stage . . . In bad times, the VC basically retracts to later-stage financing, which is not good news for the guy who’s just started his own business. But all the participants here need to try to attract that private equity investment at lower levels so we could help Canadian entrepreneurs.”
