Angel investing in Montreal (3)
Roberto Rocha wrote an article at Friday’s Gazette about angel funding in Montreal, after meeting investors and entrepreneurs at Red Herring Canada. The article outlines the large avalaibility of capital in Québec, but the problem is that all of the funds typically look for deals starting at $2m+, typically for companies who already prooved their business model and their product. If you think about it, it’s logical, because investing in a proven company is a sure way to lessen risks. There is also much less work for investors, and they also have to follow less companies. The problem now in Montreal is that “proven” companies are rare, and in order to be viable, a company has to get some kind of early funding.
Too many good ideas coming out of university labs or from cash-strapped tech wizards are ignored, [Austin Hill] said.
Some Internet hopefuls can create a product with as little as $20,000. But most VCs turn their noses up at deals below $1 million.
What I found particularly interesting is angel funds that are being created in Montreal:
- Brightspark, from Toronto “build and grow early stage software companies”
- JLA Venture Partners
- MontrealStartup
Garage Canada was also mentionned in the press this week about starting a seed fund. This is all great, although I am not sure what JLA’s definition of early funding is. The article also mentions the Caisse de Dépot and FTQ, although I would be suprised if they position themselves directly as angels.
In early 2007, there were a lot of questions about technology entrepreneurship in Montreal, namely avalaibility of early funding, avalaibility of talent (read: hackers and all) , lack of tech and community events, etc. They were of course a lot of entrepreneurs doing their own ventures, but they did in their backyard, without knowing what was being done by other montrealers.
Barcamps, democamps, MontrealOnRails, the web dev book club, tech entrepreneur breakfasts, have all changed that. The loop is not yet closed with these new developments, but today, I am quite optimistic of Montreal as a startup platform.
Angel investing in technology here is somewhat organized…but not all angel investor wants it to be. That’s because our angel investing community is mostly Love money investing…big difference. No need to be formal, no need to structure it…for them.
[...] MontrealTechWatch has a great post regarding Angel financing in Montreal. I spoke to a VC analyst some time ago and it’s true that VC’s want to invest as much money as possible in as little projects as possible. It only makes sense to them. If you have $100M then you’d want to minimize the workload by investing 1M$ in 100 projects. It’s sad to say but you don’t want to invest $100K in 1000 projects. That wouldn’t be efficient at all and I must confess that I agree with them on that point. Investing in too many projects require more resources to monitor those projects and it lowers any potential gains they can make over time. [...]
also, about the second part of your comment, i haven’t met all angel investors in montreal, but from what I have seen, there is stil a lot of things to do.
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