Startups praised by Calif. duo

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This article was published 23/04/2016 (3647 days ago), so information in it may no longer be current.

After listening to a couple of investors from San Diego talk about the tech scene in Winnipeg, there probably were some local entrepreneurs who were surprised at the encouraging words and probably just as many who might think they have to go back to the drawing board.

Prashant Kantak, the retired founder of Qualcomm Ventures, a $500-million venture fund started by the big network technology company of the same name, said he was impressed with the technology and with the quality of the management teams in Winnipeg.

Mark Bernier, an early-stage and special-opportunities investor, asset manager and entrepreneur thought it was a good sign the Winnipeg companies he encountered, unlike many American startups, are already aware of and prepared to go after markets outside the country.

“I have owned a few small companies in Eastern Canada where they were content to focus on the regional market,” Bernier said. “But with a smaller population size, it severely limits growth.”

Kantak and Bernier were brought to Winnipeg by Mario Diez, the trade commissioner at the Canadian Consulate in San Diego, as a way to possibly forge connections between Western Canadian companies and the California market.

The two San Diego colleagues met with about 10 local companies that were vetted by officials with the Information and Communication Technologies Association of Manitoba.

Perspective provided from knowledgeable professionals from outside the market can often be invaluable.

For one thing, their observations on the health of the ecosystem for startups in Winnipeg had to be encouraging.

For the past five years, much effort has been made to build support mechanisms that allow companies to collaborate, use shared facilities and access common-use facilities in Winnipeg.

Kantak, who has been involved with startups of various sizes in the U.S. and all over the world, said he thought there was a good collection of technology companies here and had equal praise for the principals behind the technology.

“But I was also impressed with the openness,” Kantak said. “These companies have shown they are trying to get input from people, looking for suggestions as to what the best strategy should be. In the U.S., companies are more rigid. They are certainly more open, more friendly here.”

When it comes to accessing capital, Kantak made it clear the earlier the stage of investment, the closer the investor wants to be to the company.

But they said there are shifts happening in the traditional venture capital space, where the big Silicon Valley funds are so big they effectively operate like private equity funds.

Bernier said entrepreneurs need to be focused on how much they want to raise and should consider as many options as possible. The angel-investor activity is more organized, which is a good sign. He also said companies should also think about finding strategic partners to invest, which is exactly what the Winnipeg company PermissionClick just did in its latest financing round that included a healthy investment from Friesens Corp.

Although there was lots of positive reinforcement, Kantak was fairly clear the days of funding and high valuations of mobile apps or novelty social-media platforms might be a thing of the past.

“That market has reached a level of maturity,” Kantak said. “It’s not like it was six or seven years ago where you could come up with an app and hang out a shingle on the app store and hope that people would pick it up.”

martin.cash@freepress.mb.ca