John MacInnes was contemplating the idea of finding new investment for his young software company when he made the trek out to the Banff Venture Forum last fall.
The company’s product, which helps other businesses analyse and reduce their printing costs, had been in development for two years and on the market for a year. MacInnes heard about the forum – which unites early- and growth-stage firms with angel and venture capital – and thought it would be just the ticket to give his company more exposure to the investment community.
He was right. But instead of being a font of capital, the venture forum instead proved to be a strategic source of information, which convinced him that his company didn’t need financing at its present stage of growth.
“At the time, we were considering looking for financing, so it was perfect timing,” recalls MacInnes, president of Calgary-based Print Audit. “We had a lot of interest from investors in the U.S., but we decided almost immediately after the forum that the company was doing quite well, and we weren’t going to specifically take investments at the time.”
Instead, MacInnes says he made so many contacts at the two-day session that his 10-employee company is now well-positioned to source new capital for growth financing when he needs it down the road.
Organizers of the Banff Venture Forum, to be held Sept. 5-6 at the Banff Centre, are hoping an expanded event this year will help draw more of Alberta’s early-stage hardware and software companies that may be discouraged by the tough investment climate.
The forum is hosted by the InfoTech Alberta, an alliance that advocates on behalf of Alberta’s information technology (IT) community.
The fourth annual affair offers new and growing high-tech businesses a brief window of opportunity to explain their company’s product and potential in front of 40 potential investors from around North America.
“We can’t guarantee they’ll put money in, but if there’s an opportunity, I think this is the best place to showcase a company,” says Susan Miller, president of Inno-Centre Alberta and chair of the Banff Venture Forum’s steering committee.
While deals aren’t necessarily closed at the event, she adds, relationships can be seeded and small and medium-sized companies can begin generating some buzz about themselves through networking.
For Adrian Banica, president and CEO of Synodon Inc., this year’s forum could hold the key to $1.5 million in financing. The Edmonton-based firm, which has developed a prototype for a helicopter-based gas-detection system, made its debut at the forum last year and is now ready to take its product to the marketplace.
“Last year, they didn’t have any angel investors in the mix. But we decided to participate anyway in order to start raising our profile a bit in the community in anticipation of this year,” says Banica.
“Just because you have a killer story the first time around, they’re still probably going to want to look at you a bit more. If you shop at Banff or any venture forum out of the blue, you’re not likely to get activity or any real investment from a VC for at least six months to a year . . . Just getting them to talk to you is a challenge – most of the time they’re not even returning your call.”
Additional angel investors are being invited to this year’s event to encourage more early-stage companies to participate, although the forum will still remain focused on venture-capital opportunities.
Companies will be screened ahead of time by a six-member investor panel, and then go on to participate in pre-forum “boot camps” in Calgary and Edmonton to learn the basics of developing an effective business plan, how to make a 10-minute pitch in front of investors and how market conditions affect the investment climate.
“Investors are looking for what kind of recent and imminent success there is in a company,” says Rus Matichuk, a lead partner in Capital Business Solutions, an Edmonton-based firm that helps companies with acquisitions, mergers, divestitures and raising debt and equity funding.
Matichuk, an advisor at this year’s forum, says that if given a choice, most investors would prefer a company that boasts an “A-level” team and a “B-level” product and service, rather than the opposite.
“The team is a really key component,” he says.
“If you just have good technology, that’s only one factor. One of the prominent things investors are looking for today, maybe even more so than in the past, is traction – do you have accounts that are formally interested and excited about working with you?”
This year’s forum will feature keynote speaker Guy Kawasaki, the CEO of Garage Technology Ventures. In addition, VCs and angel investors will be brought together in a session called: Where Angels Fear to Tread, which will examine differences between angel investors and venture capitalists.
Miller says the more companies who attend the forum, “the more there will be a sense that there are things in which to invest in Alberta.”
“I think it’s going to be a real shot in the arm for the industry,” she adds.
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