With Startupfest 2019 wrapped up, tents packed away, and delegates returning to their daily routine, it can be pretty easy to forget all the value and benefits that were packed into a busy few days in July. For some, the experience centered around creating new connections in the startup industry, others focused on soaking up the valuable information presented by a strong cast of speakers. Either way, there was plenty to take away from this year’s edition of one of the best events in the startup scene. Here are 5 things we got out of the festival:
It is typically at the onset of creating their company, that founders start to make plans for raising money from VCs. However as serial entrepreneur Randy Smerik explained brilliantly, raising money from VCs is not the path that most startups should be taking, especially if they don’t understand the world they will be getting themselves into. We won’t attempt to summarize Smerik’s insightful presentation but in a nutshell, founders need to be aware of the very high expectations that come with signing a Series A term sheet with a VC. By their very nature, these investors are seeking high returns (e.g. 15-20x) in order to keep their LPs happy. However, the math can be somewhat misleading given that the average amount of money generated by startup exits in recent history points to failure being a more likely outcome. Smerik warns that before having any thought of discussing with potential VCs, founders need to be absolutely sure to understand the objectives of a VC and all the numbers behind how they approach transactions.
In a topic similar to Smerik’s, event goers benefited from a laundry list of questions (28 to be exact) that founders should be able to answer prior to raising money from VCs. The list ranged from Are you willing to accept more money to Are you speaking to other investors and the difficult Would you be willing to step down as CEO. While some of the answers appeared to be obvious at first thought, speaker Jonathan Lowenhar clarified that more thought needs to go into how these typical questions should be answered. Not only can the right answer be the difference between raising or not, well presented thoughts and answers show VCs that the founders have put in the appropriate time to prepare and can lead to high valuations or better overall outcomes for founders.
Through the thundering rain, Tamsen Webster was able to captivate her audience with her valuable insight on how to get more “Yes”s. Her guests, ourselves included, were able to walk away with a better understanding of the concepts that need to be included to walk away from any meeting or presentation with that coveted “Yes”. The main point: Founders tend to focus on where they want their counterpart to be (her figurative right side of a cliff) instead of focusing on where they are now (the left side) and creating that rope to connect the two sides together. Her message definitely had a thunderous impact on us 😉
While startup founders may feel alone on an island working on a problem that they believe has been previously unsolved, Startupfest showed exactly why it is the opposite. From investors, to community players, government organizations, and other founders, there are a lot of resources out there that founders should tap into to help solve their problems. More importantly, founders will be surprised how much these other people are willing to help and generally are happy to spend time assisting and mentoring less experienced founders.
Regardless of where you were on site, it was very common to meet founders from coast to coast working on projects in a multitude of industries. While certain Canadian cities are excelling at growing into hubs competing with international strongholds (think Silicon Valley, NYC, and London), this does not take away from the fact that all provinces are being well represented in the startup space and having all these brilliant people together at Startupfest really helped remind us of the great talent and innovative ideas this country is producing.