Raising angel financing in Canada has unique challenges that I’ve written about here before.   Part of what was most fun about raising this round was the number of incredible investors I was able to meet.   Many of them joined us in this round, but throughout the process I was impressed by the growing strength and sophistication of Canadian angel investors.

Completing a $1.9 million dollar round for a stealth project had its unique moments, but the confidence and support that our investors have shown for the project has been great.

I’d like to welcome all our investors to the Akoha project and thank them for their support.

Ben Yoskovitz, Fred Ngo and I are mentioned in the article.

Combine those two interests, and it’s easy to see why angels often want an active role in management and decision-making. Such a high level of engagement makes finding an angel who is aligned with your vision and business goals as crucial a task as perfecting your investment pitch. Austin Hill, a Montreal-based investor and serial entrepreneur, says the most common mistake business owners make is treating private-equity financing as a mere business transaction. “I had one entrepreneur show up at my house on a Saturday morning, shove his product in my face and ask me if I was ready to invest,” says Hill. “Entrepreneurs need to understand it’s a relationship, something they should begin nurturing well before thinking of asking for money.”

For Benjamin Yoskovitz, CEO of Montreal-based Standout Jobs Inc., developing that relationship began with volunteer work for BarCamp Montreal, a conference for the city’s bustling technology-startup community. That exercise led to chance meetings with Fred Ngo, his eventual co-founder and chief technical officer, and Hill, who became one of his investors and chairman of Standout Jobs, which develops Web-based recruiting tools.

There are some additional quotes from both Ben and I where we discuss the importance of aligning common vision and having good communication with your investors.

Getting the right angel investors is one of the most critical decisions an early stage company can make.   It is one of the reasons I’ve criticized the speed dating approach of obtaining investors that is showcased on the CBC show Dragon’s Den. The show is good for entertainment - but it is still just TV.

While the market for angel investing in Canada still has a lot of maturing to do I am very optimistic about the organization of angel investors into funds, networks and the exchange of best practices that is beginning to occur.

Last summer my friend Patrick Lauzon and I spoke about the need to create a new type of networking event that would bring together founders of technology firms, angel investors and venture capitalists.

We held the first Founders & Founders dinner last November with a private group of 75 people.   With the help of our sponsors, iNovia Capital, Neotech Capital and Montreal Startup the event raised $1,000 for the Montreal Barcamp community.

The event was a great success, and was quickly replicated in Toronto by our friends David Crow and Jevon MacDonald.

2nd Founders & Funders Montreal Announced

We are pleased to announce that we are going to be holding the second Montreal Founders and Funders dinner this coming May 14th in Montreal.

To help expand the community of people we invite to the event, we are opening up a registration form for invites allowing anyone who is a founder, angel investor or VC investor to request an invite. 

We are limited to 100 seats for the dinner.   The fee for the dinner will be $100 which will include drinks and dinner.

Given the interest we received after the first event and the fact that we won’t be able to invite everyone who has expressed interest to the dinner.  As a result we are also going to be hosting an after dinner open cocktail networking (A nice roof top terrace party).  The networking event will cost $20 and include two drink tickets.

Attendees to the dinner will be able to attend the networking event.  The networking party afterwards is open to anyone interested in the technology community in Montreal (not just Founders & Funders).

All profits from the event will go to support Barcamp events in Montreal.

How to Get An Invite

If you would like to attend the dinner, or the networking event after the dinner please fill out the following form and let us know who you are.

We will be contacting everyone with details on the location & registration for the dinner in the coming weeks.  We will also be announcing the great sponsors who are supporting us throw the event.

You can keep track of the event on the Founders and Funders blog.

If you would like to sponsor the event please feel free to contact me.

Illustration by Asaf HANUKA - Logo by Hamish Macpherson
Illustration is not an advertisement of the actual attendees  or events of Montreal Python.

Akoha and Standout Jobs are once again hosting MontrealPython 2 which is occurring tonight at the Standout Jobs office.

Date: Thursday, April 10, 2008
Time: 6:30pm - 9:00pm
Location: Standout Jobs HQ
Street: 3981 St-Laurent Suite # 615
City/Town: Montreal, QC View Map

The event notice is here on Facebook. 

Tonight the schedule includes,

Asterisk and Python
by Cyril Robert

Asterisk, allows the average user to do pretty much anything he wants
with his telephony system. It is open source and billed as the “future of telephony”.

The first step in using asterisk is understanding it correctly, which
will be the first part of Cyril’s lecture. The second part will
focus on how to take advantage of Python to make asterisk a whole lot
easier.

PyQT and PyOpenGL: Live hacking a toy app
by Yannick Gingras.

For the first 35 mins, Yannick will hack a toy app from scratch using
PyQt and PyOpenGL. After that, he will answer questions for 10 minutes.

Michael Deutsch also proposed we take a look at the introduction by Guido Van Rossum of Google App Engine if we have time.

For the Montreal Canadian fans attending I’ve already confirmed that a few people in attendance will be watching the game stream from CBC so I’m sure we can all keep running updates in between our Pythonistas presentations.

If you are into Python come on out and join us.

If you are a reader of my blog, I encourage you to also subscribe to the Akoha blog since I will be posting more often on this blog as well as here in the coming months.

Two new posts are up

• Video interview with me on Gift Economies by Tara Hunt
• Whuffie and Social Reputations

Silicon Valley loves risk taking and failure. Canadian investors are risk adverse and scared of funding real innovation.

-Many Canadian Entrepreneurs

This something I hear from many entrepreneurs who lament the challenges of raising capital in Canada.   It’s a gross over simplification, but a catchy idea when people are having a hard time raising funds.

It’s true that Valley based venture capital firms not only accept that failure happens, they celebrate it by recycling the best parts of the team, idea and lessons learned for a new project.

In Canada we don’t hear enough about our failures and the people who go on to find success with new initiatives.

I was thinking about these cultural differences when I read this post by Wade Roush “When Startups Fail” where he interviews entrepreneur Christopher Herot about Zingdom’s shutdown. 

Part of the reason high-tech entrepreneurs are attracted to Silicon Valley is the perception that it’s a place where risk-taking is encouraged. West Coast venture capital firms not only excuse failure, so this perception goes, but celebrate it: if a high-tech entrepreneur doesn’t have a couple of tanked companies on his resume, he probably wasn’t being innovative enough. By contrast, the perception about investors in New England is that they penalize failure, which therefore becomes a taboo subject.

Both perceptions are probably exaggerations. But whereas West Coast companies come and go like the butterflies in Santa Cruz, it’s still unusual to hear any of the details when an East Coast startup closes down. That’s why a blog post last week by Christopher Herot has been attracting so much attention.

I met Christopher at TED this year and read his post about shutting down Zingdom with a lot appreciation for his honesty in posting the details of shutting down his company.  I’ve had to shut down my share of companies and have had many failures that have contributed to my successes.

If you swap out New England & East Coast with Canada you have the same perception that investors penalize failure and attach a negative stigma to projects and teams involved in them, which therefore becomes a topic not often talked about.   

So it is in that vein that I ask Montreal local entrepreneur, Martin Dufort to answer some questions about his experiences with Kakiloc (a location based social networking web experiment that shut down in November, 2007).  I met Martin in the Barcamp community in 2006 and got to see the hard work that he and his partner Alain put into building Kakiloc.

They were innovating on a number of fronts and I enjoyed introducing them to various investors where they often impressed people, but ultimately were not able to secure funding.  (If you hadn’t seen their demo where you could watch them drive up to your meeting via the web - you missed something very cool).

I really would like to congratulate Alain & Martin for their failure. I can’t wait to see which eventual success they will be able to attribute this failure too. Their willingness to admit a failure, discuss what they learned and move on to new adventures is what true entrepreneurs do and they deserve a lot of credit for doing just that.

First I would like to thank you Austin for giving me this opportunity to tell the Kakiloc story. I’ve learned a lot from this endeavour and reflecting on it and the associated failures and the shutdown could be valuable for anyone trying to startup a business and being faced with the same challenges.

1) Tell me a bit about when you & Alain started Kakiloc and it’s original vision?

The inception and the ideas for Kakiloc were derived from an open source project I created in June 2005: Rufopode. This project still available on RubyForge, but no longer maintained, was a small library enabling the extraction of GPS receiver data in order to properly plot them in Google Earth. My goal was to view and visually compare multiple training sessions and provide insight into my training schedule. The ultimate goal was to provide a realtime view of other athletes riding the same course and compare performance accomplishments.

I quickly recognized this was targeting techno-savvy people and the audience size was very small. I then brainstorm on how to apply this to a broader audience: Locate friends and family members using GPS technology while on the move with your cell phone. After explaining the concept to Alain, Kakiloc was born and we started coding the concept.

2) How far along did you guys get in your development and what were some of the main challenges?

We started prototyping the concept in November 2005 at the same time that the Google Maps API was picking up steam. Within a week, we had a rough prototype using Ruby on Rails for the Web site and Python on the Nokia S60 mobile platform. We were able to retrieve the GPS coordinate from the phone and map it on Google Maps so we could follow our location in real-time. It was quite astonishing at first. We knew we had something interesting with a lot of potential so we went forward with the implementation without thinking about the underlying business model. At that time this was mostly another hobby project.

From there, we showed it to people and they were really enthusiastic. Our first public demo was at the OGRE meeting [http://location-based.blogspot.com/2007/08/looking-for-windows-mobile-beta-testers.html] and an iPhone version [http://montrealtechwatch.com/2007/03/31/the-future-is-mashups-and-mobile-services/]. Also it’s much harder to raise money in Canada if you are ill-prepared on the financial side or if you business plan is not rocket solid. The large number of VC funds in the US and especially in the Valley, allows you be much more successful and gather interest at a much earlier stage even if you are ill-prepared. We are still missing that initial commitment spark here to ensure very early-stage companies can continue to innovate and move forward within the Canadian ecosystem.

Companies like Loopt (with $12M in funding), Plazes ($2M Euros), and others are also exploiting the location-based aspect. However they started with a very focused goal and built on it. Plazes even tailored down their mobile functionality to respond to user’s criticism about being too complex. However, the market is still open and we are seeing more of these companies shifting their business model: Loopt is now providng Location-Based Ads (LBA) in collaboration with CBS. You have to be agile and follow the market wave. If you have a clear understanding of your roadmap and your capability, that’s easy to do. We did not have that 20/20 vision and that’s why the uptake on our service was pretty low.

6) One of the most important things I see entrepreneurs not knowing, is when to stop and move onto other things.  What went into your decision to shut down the Kakiloc experiment ?

We were maintaining stats about registration versus usage level. We had a very low usage rate. People registered, specified their initial location and then expected something return. For most of them, there was no reaction because none of their friends were in close proximity. The fundamental action-reaction paradigm was broken. We were unable to achieve a sustainable user base. At that point, we needed to take a huge decision. Either we re-launched the site to be more focused and easier to use or we shifted our business model to explore a specific vertical (a business model shift). Still with no funding available and nothing in the medium-term pipeline, if was very difficult to do either. We discussed the future roadmap, the re-shift, we weighted the pros and cons, we read the seminal book by Seth Godin “The Dip”.

After a number of days of insightful introspection and discussions, my partner Alain and I decided to split. We made an agreement that I could continue to use and operate the Kakiloc intellectual properties. This was a very friendly split. However, the service quietly died as a consequence. It is impossible for a single person to handle everything. That’s the reason why, starting a company solo is 95% of the time a big no-no. You have no one to bounce ideas to, discuss issues, promote and demote stuff. Kakiloc was shutdown on November 6th, 3 days after the death of my mother. The official announcement was actually sent on November 29th to all our contacts [http://location-based.blogspot.com]

The Kakiloc technology is still alive and I’m looking at the right fit for it. I’m also evaluating other options in the real-estate business where it could be applicable. Lately, interesting things are slowly starting to surface and I should be able to potentially announce something interesting very soon.

I’ll keep you posted. Thanks for the opportunity Austin.

Happy location reporting - Martin

Thanks Martin for participating in this interview. I’m looking forward to your next adventure as an entrepreneur.

Ben Yoskovitz wrote a post about celebrating failures that also mentions Kakiloc.

Check out Marc Andreessen’s headlines that could just as easily been used for this stupid article.

Mathew Ingram does a good round up of the discussion about the article.

I find it ridiculously stupid to equate writing blog posts to digital-era sweatshops.

Comparing the luxury of sitting behind a computer screen writing for fame or fortune (no matter how badly one may pursue this) with the daily work that billions of people do to barely be able to feed themselves is shallow.  Most of these people work to survive while doing truly horrendous, dangerous and labour intensive jobs and don’t wine about not having time for TV, Xbox 360 or being scooped by Valleywag.

I also find it amusing that most of the examples in the article are actually about entrepreneurs trying to build their Hearst inspired mini-ME-dia empires while searching for their own special rosebud.   People work hard at startups, and if you join a media startup to write content then yes - you are on a treadmill to deliver.

Any job can be stressful, but if you don’t love what you are doing and realize how lucky we are to be participating in the upper echelons of privileged society (Western industrialized culture with the many opportunities that Freedom, Capitalism and Education provide us) then a reality check is in order.

Many of us blog because we enjoy it, it’s fun.  While I stress about startups I’m involved in at times as well - I really wouldn’t want to be doing much else and consider myself lucky to be in the game having fun still after all these years.

Illustration by http://www.asafhanuka.com