Perhaps one of the most difficult parts of starting a business, getting funding can make or break many of these ventures. Gaining the confidence of one or more investors will help make the founders’ dreams become reality, but failure to do so could likely lead to an untimely end.
In Canada, small businesses form an important part of the economy, to such an extent that the government has created a litany of programs, courses and bursaries to help get these businesses off of the ground. And then there are companies like Montreal-based Fundica, who host nationwide events that provide opportunities for start-ups to increase their knowledge and present their ideas to a group of investors.
Such is the goal of the Funding Roadshow, which visits cities across Canada in search of the next great business ideas. The idea was conceived by Fundica CEO Mike Lee and his team a few years ago, and originally began as an online-only presentation.
“The Funding Roadshow started three years ago. When we first started, we only had the online portion, so we looked at how we could get out of just being online and be more present in the physical world,” Lee said at the Toronto stop of the Roadshow’s cross-country tour.
“We looked at different options, and we saw that the (domain name) Funding Roadshow was available, so we went out and purchased it,” continued Lee. “Within two weeks, we decided that we would go to a few cities, and we announced this online. We were able to get entrepreneurs and funders in each of the cities, and within 60 days of the idea, we had completed the Roadshow in five cities.”
Each Funding Roadshow event features a similar format. Several start-ups apply, and after undergoing a screening process, they are whittled down to around 20. These businesses then get to pitch their ideas to a panel of local investors. In essence, the pitch process works similarly to CBC’s Dragons’ Den and ABC’s Shark Tank, only without the presence of glitz, glamour, cameras, and the oft-polarizing presence of Kevin O’Leary-type financiers.
The pitchers are given eight minutes for their presentations. The first five consist of the actual pitch, while during the final three, they field questions from the panel, who evaluate each business based on five primary criteria.
“There are five criteria, and during the day, (the pitchers) are rated on them to determine the winner,” said Lee. “We look at the market, the product or solution and the team, which form the core of the business. Then we look at how good the pitch is and whether or not they are ready for San Francisco.”
Not only do the final scores determine which team is declared the overall winner, but do so the input from the panel. The pitches will generally run the gamut from strong, investment-worthy ideas to those that require some additional fine tuning. As one panel member explains, the quality of the pitches observed during the morning session was encouraging.
“I’m encouraged. They’re all over the map,” said Don Wilford, a partner with First Stone Venture Partners in Picton, Ont. “Out of nine opportunities, there are three that I want to talk to, three that should not have been here, and three that will learn some lessons, and will hopefully be back here next year.”
Wilford believes that the wide-ranging variety of pitches is what makes the Funding Roadshow interesting.
“That’s exactly what you would want,” he said. “If you have only outstanding opportunities here, it means that we probably should have expanded it because you want to give exposure to people across the entire spectrum, from the good to the bad.”
Events like these are a breeding ground not only for great new ideas, but also for Canadian small businesses in general.
“It’s important for (the funders) because we’re looking for deal flow, and it’s important for those who are pitching because they need to understand what the process looks like so that they can get money tomorrow,” said Wilford.
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