Pitch Please

Searching for Canada's best start ups. The pitch, please. Podcast hosted by Mike Thibodeaux. Give us your best pitch, connecting with Canada's startups to learn about their business and the amazing people behind them. Follow along and hear some of the most interesting ideas in start ups from across Canada. Welcome everybody. This is a fun Friday, Cinco de Mayo.

I've got some soul in my hand. We're gonna have some fun today. Um My name is Michael Thibodeaux. Uh I lead our Azure business here in Canada for all S M BS startups and high growth companies. And um I'm the least important person in the room because we have some amazing panelists here today. Looking forward to talking about the future of the Canadian startup ecosystem, but also taking some moments to reflect on the present.

Maybe what we'll do is we'll kick it off with a quick introduction starting at the far end. Uh Christa, if you want to introduce yourself and we'll kind of work our way towards me, everybody. My name is Chris Jones. I'm the chief delivery officer at Mars Discovery District, which basically means I run all of our venture and corporate and sector based programming um for a lot of the work that we do in the community. Um I've been in the startup community in Canada. How many decades um previously as a CTO head of engineering, but most of the competitive telecommunications infrastructure in Canada is the engineer. Um And in the last uh 15 years at Mars working to help build um all of the companies that, that we support. Awesome. So, thank you so much. So, hello guys. My name is Arnav Mishra and I have a fun job at Dyne.

I'm sometimes the intern, sometimes the CEO but really happy to have all of you guys here. So, on behalf of my entire dying team, first of all, a big shout out to the entire Dyne team for pulling this off and also a big shout out to all the partners in Microsoft 1 11 and Mars for supporting us in this. So my background is that I'm just 23 years old and I'm still a student. I have not graduated. So there are a lot of people in the room who are young entrepreneurs who are just starting out in their journeys. And I was once like you, I have been a seal entrepreneur with multiple startups and have might exited one. But at the same time today, I'm here to talk about this ecosystem.

We are in to share the insights on how dying scale from just a small student startup out of U BC. All the way across Canada from Vancouver, Toronto, Edmon and Calgary. And we are so happy to build a community and a family which we can call home and that home is this. So, thank you so much for coming in. Hope to share some insights, take some questions and of course, it's a dying event. So you gotta have some food challenges and some surprises along the way. So excited. Thank you. Right. Hey, everybody. Uh My name is Matthew Lombardi.

I'm with 1 11. So just a quick little background on us. So we are a space and accelerator just down the street for venture backed companies. Uh We're very pleased to have dine as members of 1 11. Some other members are here. I think Bill Murray from Padi. Uh That is, that is his real name. Um Alexi and Roy from Unified are here. Uh Really excited to be here and to chat with you guys. Um The future of startups is a pretty awe inspiring topic, I guess.

I guess when you're the co inventors of open A I, you can, you can brand things that, that big. I don't know. We're, we're excited, we're excited for the discussion. Well, um, as you can all tell, we've got some amazing people that are highly credible and definitely gonna have a great input on the current and future state. I think maybe to kick us off, it would be great to get each of your respective opinions. And perspectives on the Canadian ecosystem as a starting point. Um I and maybe some others have had opportunities to go talk to some people in other ecosystems, but it would be good to get your thoughts.

What makes Canada different. And if you've traveled and had a chance to talk to or understand, you know, Silicon Valley Europe, uh I know there's a big tech hub now. Uh in, in Lisbon, what are your perspectives on what is different out there and what is different and unique about the Canadian ecosystem, anyone can start? So the first thing that's different is we're all so polite.

No one wants to start. Um Krista, do you want to kick us off? Sure. Um So one of the things that I, I think we have to start with a major difference in Canada, which is the people and the type of, of uh of founders that we actually attract in this ecosystem.

We have one of the most diverse set of founding um groups that you see in many of the other ecosystems around the world. And I actually think that that's part of why the types of the type some companies that we start are I think are slightly different in the way that, that most of the founders approach, at least the ones that I work with. So if we, we always talk about, um you know, even in to, we talk about, you know, immigration is our key and we're a diverse society, but there's no place in Canada where that is as true as in the founding community. And if you think about the community that, that we support at Mars, um I think over 50% of the no, it's probably close to 75% of the companies that we support have um at least one of the founders that actually is a new immigrant to Canada under the first or second generation. And, and I think it's a global perspective for problems and solutions that really helps us develop in the unique sort of ideas and, and, and things that we support. So that, that to me is a fundamental basis upon which our ecosystem is founded, that makes it very unique.

I can go into a whole bunch of other things, but I'll, I'll kind of just start with one uh place to begin and pass it or maybe no, I completely agree. And uh honestly, I just want to gauge the room as well. How many of you guys are immigrants here? People, international students. Great. And how many of you are founders are still students, young entrepreneurs? Great, amazing. So the thing is uh you know, I faced it myself as well and by the way, I am still a student, like I said, and I came to Canada just five years ago in 2018. So I'm relatively new and it is true, Canada is very immigrant friendly. It has a lot of opportunities for growth and innovation. But the ecosystem is different than our home countries and we all will feel that. So let me tell you what my personal experience was and when I changed the ecosystem, so I come from traditional business family in India and the values of business, there are much focused in establishing a business, like it's a mansion you dig in, you build the entire empire so that your families can take over your kids, their kids. And it's a generational thing. But when you move to the west in Canada and us especially, I saw it's like building a skyscraper, it's like building a team and increasing the valuations, your cap tables are getting filled with different investors.

You are bringing in more people. Your team is so solid and important to you and it rises quickly and you need to make sure that you still manage that. And that was the biggest shock I got because I was never used to that line of business. So when founders like especially I can speak to at least some of the international students and the people coming in, we have different mindsets. But the core of the business principle is simple.

It's about people and partnerships and that's what Canada does best the Canadian people. I mean, come on, we can all agree. That's so nice. They say sorry and thank you in every sentence even I have started doing that. And the second thing is partnerships. People in Canada love partnerships, they love coming and supporting each other.

Maybe it's the hockey that unites us or maybe it's the maple syrup. I don't know, but honestly it keeps us together and that's what I saw in this community as well. The ecosystem in Canada has the biggest advantage that if you take the step out, people will start helping you. And the first time I met, let's say Matthew, it was maybe during collision last year. And all I did was just have a five or 10 minute chat with him saying that, OK, I have a crazy idea. I don't know how I'm going to scale it across Canada, but I need your help. And he was like, sure, let me see what I can do with it.

He started making introductions when I met some founders in Toronto and I see a couple of you guys here as well. They helped me out with making small but meaningful things in terms of setting up my team, in terms of giving me connections to universities to get talent, in terms of introducing me to investors and mentors. And that's exactly how our community is formed. So much like us trying to build a family, we establish a business, the business has core principles of people and partnerships. And that's what Canada does best. It introduces us to good people, like minded individuals who want to do good and partnerships that people when they take initiative. They're actually honored and they actually take incentive in your success and that's what matters the most in business, I guess. So. Yeah, that's my take. What are you, what about you?

So, I, I'll riff on a couple of things that you both said. Um, so 10 years ago, 1 11 didn't exist, uh Mars would have probably been half the size and offering a quarter of the services that it now offers. Microsoft would have had almost no presence in Canada. Um You would have been playing with Power Rangers and, and so, so what I'm trying to riff on here is the speed and pace of growth, right? So Roy Pereira is sitting at the back. Um Roy is a four time founder with three exits, nobody, there was nobody with four under their belt and three exits 10 years ago in this ecosystem. And that's all due to the speed and the pace of growth.

Newcomers coming into this country, particularly into Toronto. We know that newcomer communities are more entrepreneurial. Statistically speaking, uh the majority of businesses that are located at 1 11 are founded by a newcomer to the country or co-founded by a newcomer to the country. I'm I'm sure that's the case throughout uh you know, the Mars ecosystem as well. Um So I think all of this has created a virtuous cycle and a loop where founders exit, they become investors in other companies.

We had our showcase day at 1 11 2 nights ago, which, which are not presented at among 10 other companies. And there were 55 different sources of capital in the room. There wouldn't have been 55 sources of capital available for, for startups to do venture investing 10 years ago in Toronto. And what do you think is the shift which bought this like, is it the entrepreneurs or is it the community that came in together? You've been here longer than us, the the shift that led to Toronto becoming this sort of entrepreneurial growth space. So I, I think it's exactly what we just said.

It's, you know, the pace of change and growth, especially in immigration, bringing more entrepreneurial communities here. And you know, as you reach critical mass, you start seeing that virtuous cycle of, you know, exits uh capital, reinvested into the ecosystem, new venture firms being founded, infrastructure like Mars and 1 11 growing to support it and it just becomes this virtuous cycle. OK, Mars has been around for 20 years and when we started, when our founder built the building, um you didn't, we didn't have the language that we have today. So it, and, and even if you look globally, you know, globally, there's only a few places that are really known for entrepreneurship and in terms of tech entrepreneurship, which is what we're talking about, which is very different than building legacy and, and, and different types of businesses. And when we started, I joined Mars and we had literally three advisors and we were supporting 60 companies and we spent the majority of our time trying to uh talk to people about how to start businesses because we didn't have that as, as kind of the uh as, as kind of a muscle in our ecosystem. So we spent a lot of time bringing scientists in, bringing technologists in and writing what we call 81 oh one.

We did that for probably the first 5 to 7 years. And, and what, what's interesting is I was talking to a government minister recently and they asked, you know, what would happen if Mars didn't exist? I said, well, we would do what we were doing 10 or 15 years ago. When we were starting to do this, we used to take planes of, of entrepreneurs in the valley. We used to take planes of entrepreneurs to New York City to actually go and meet the other ecosystems and to get connected. And now instead, what we're seeing is the planes coming to Canada. Um And it's because of the Founders Act that came here, right? Because the money follows the founders, the, the ecosystem follows the founders and it really was based upon getting that group of people going. And if you just see the evolution of how that has evolved, um you know, we're, we're a much more mature ecosystem in 2023 than we were even in 2018 in terms of what we were doing. But we just happened to hit the growth curve actually where the technologies that are universities and our experts and and the entrepreneurs that we had really started to, to find that sweet spot between them. So we actually ended up with a depth of, of knowledge in the exponential technology sectors, which was a lot around the software side of the evolution. So we just ended up the ecosystem was growing at the same time as the um as the technologies that we are actually quite known for, started to really take off here. So I think you actually have to look at kind of like a longer, a longer time period. And just for the record, I'm 1/7 generation Canadian. So I am I am the exception to the rule, I think on both sides of my parents. So it's um um uh I, I've been, my family has been for a long time and um most Canadians that I know from the small town that I grew up in, they don't understand entrepreneurship, they don't understand technology because that's not, that wasn't kind of in which Canada did, they just had resources, forestry, mining. Um some of the, the more that was what we were good at, but you come to Toronto and you see our universities and you see like Waterloo and you have Tea and Toronto Metropolitan, you got it.

I mean, you look at these areas. It's, it's that leading edge that actually combined with our, with our sectors that actually enabled us to really grow. So we have been a lot that we were at this great time that, that, that uh the ecosystem is happening, but that's why we haven't grown the same way. And I always hate the, how do you compare to other ecosystems? Because I actually don't want to compare to them. I actually want to build on the strengths and the assets of this community because I think we're fairly unique and I think partially the immigration combined with the Canadian attitudes like when people come here um uh uh is actually what makes the types of companies that we've been unique and different on the global scale. Yeah. No, I love that.

I just want to rip on exactly what Chris is saying about how people come over here. So there's a Canadian history Twitter account that I follow and, and it tweeted something just this morning and it was a photo from the coronation of King George in 19 oh four. And Canada sent a float into the parade and the float said come to Canada free homes for millions. And this would have been back when Canada was attracting immigrants by saying, you know, here's a tract of land to farm. Um The coronation is tomorrow, Canada does not have a float but Canada is now attracting people not on free homes, but on the Canada startup Visa, right?

That's how we attract people now. I I love it. This makes me like super proud that we even started in this way. And you guys each respectively talked about so many elements that I think we should touch on.

I heard things around the talent, especially around founders. I heard aspects of our collaboration and humility. I heard aspects about the funding and growth and reinvestment back in the startup community. Um Maybe we start by talking a little bit about what you were saying. Um Chris and maybe I'd love to get all of your perspectives to dive a little bit deeper on this talent notion. And, you know, very specifically, we talked about how immigration, young entrepreneurs. But if you were to sort of talk about the specific um characteristics that you're seeing that's different in Canadian founders that's really helping them thrive and succeed, or at least the ones that you would look for um in budding entrepreneurs and, and thriving founders.

What are you seeing as like the top skill sets out of Canada or in general that people should be, you know, building that, that there's, there's a um I could say a bunch of areas where we need more of that here. But when I look at founders themselves um the factor. So there's the passion and the knowledge they have about the problem that they're trying to solve and then the ability to um utilize it and the the product that the, the technology that they're working on, it's, it's having those core capabilities at that original spark. But I think it's what's really um the most interesting and one of the things about uh Canadian entrepreneurs because we talked about all the good things about our ecosystem, we have some gaps. So, so when I look at our entrepreneurs, um um the, the, the willingness they have to get on a plane and go find the smart money that they need to help them build their business to find those partnerships because they get our ecosystem. We don't have good adoption from our, from our companies. Like our, we could talk data later about what we're seeing, especially now in 2023 about how our, our seed stage drums are finally um almost on par with the size like the average size deal of the US. But if you get to 1/4 or 1/5 round, um the data that we looked at for last year was there's a marketing fraction.

We all know it was a marketing fraction and um uh the US valuations went down 30%. Who could guess how much Canada's valuations went down? Yeah, I'm gonna say less 77%. So I think we're on par at the early stage and we're, we're um as long because the companies got worse. It's, it's actually a AAA systemic failure in our system that, that we really need to look at so the good news is that our, our seed stage deals are doing really well. And so when you think about kind of the what makes the, the founders that have been successful and exited? Um And, and got to that stage, it's the fact that they build here and they're, they're staying here and they're the ones that are getting the companies to the next stage and having the credibility and the capability of pushing our valuations comparable on a global, on a global level.

I get that we have a market fraction. I don't get why the hell we traded the discount to any other ecosystem. Um Based on the quality of what I see, um at least in the companies that we support and that's a, that's a systemic problem that we have. So it's um don't need to be a downer, but there are some, you know, we could, we could talk the rest of this, the rest of this session positively about the people of the ecosystem. But if we really want to talk about the state of what's happening, we've got some systemic barriers that are more than, than just founding companies that, that actually have to do with enabling um the enabling our, our economy to actually take, continue to grow in the way that we did and, and be a global presence based on uh um based on the strength of what we see and we're hamstringing them in the later stages it gets, it just progressively getting worse and it, we just had, had, um mars impact health this week and the data holds fast in the, in the drug development. You know, we can't get anybody past clinical trials, you know, like we, uh, and we have some of the biggest, um, you know, sort of the most advanced drug discovery um capabilities globally.

So, sorry, I just thought, I think it's going on the people but it's, it's, we're, we're hamstringing up by some of the conditions at the later stages. It's good to talk about the challenges and maybe it'd be good either time on that or I'd love people's thoughts on like when you look at these challenges, are there any thoughts or ideas around the things that you know, us here on the on this panel, the people in this room can go out to be doing to help, try to break through some of these barriers together. I know Arnav referenced collaboration as one of the most important differences that he's seeing here in, in Canada, but would love to welcome any thoughts you have around how we start to, you know, create a dynamic change in this or maybe it's already happening. Yeah. So I can chime in on that. So how many of you guys are foodies over here, by the way, it's a dine event. So I ask, and how many of you guys don't have jobs?

I don't have a job ok, I'll hire you guys for sure. So anyways just, ok, that's a joke. But I'll give a big shout out. So there's one gentleman in the back of the room, Eric. So, Eric is our CEO at, he went through over 357 applications in the last one week for just summer internships. And that was because I completely agree with what you just mentioned.

The talent in Canada is very diverse and there is both and I of a pro and a con. The pro is that there's a lot of diverse candidates. The con is that we are constantly in a struggle with startups are being pushed against bigger companies and are being pushed against harsh market conditions. And it's not like we don't want to hire. It's about that we want to create a team that will go longer and further away. So the people in the room who are there with us as founders, as entrepreneurs, as even students and investors, maybe the thing which I always say as a founder is that my team currently and that's the biggest ride for me. And so you can call it a lot of different things.

It's a, it's a fun machine learning company. It's a Foodies app. The biggest success of dying as a team.

We have people from 11 different countries. We are a team of 21 individuals. We are all under 25 we have been able to scale this from a company which was just having 20 clients last May to 786 paying customers in this May. And this growth has been when we were all part time, as well as as students. The thing with Canada and the talent ecosystem is that I have always tried to see this landscape in terms of what we can offer to learn from each other. The thing with Canada is that, you know, and this goes across all different regions.

I have worked with about 16 universities. We have folks from like by the way, nine team. Can you raise your hands, by the way, how many of you guys are from York right here? Uh One, how many guys off you are from U F T here? 12345. How many guys are you are from T M U?

Here, there we go. So we have representation from what's the other one? I'm forgetting. I'm sorry, I'm not from Toronto. So I get the thing I might have forgotten one of the universities. But thing is we have students from a lot of different universities. When we look for talent and we like to build our teams, we look in terms of what your skill set has been in terms of your academic background, but also what is it gearing towards the future? Because when I'm making a hiring decision and this is what Eric and his hr team does.

We like to see what skill sets do you guys possess, which will actually help us in the next six months of the startup or in the next 18 months of the startup. Because for us, when we, let's say, go for an intern, we'll usually work with federal government grants, we work with provincial government grants. These grants are geared towards at least four or eight months. And we like to see a project which can be done, which can help us scale. But when we look for someone long time, full time and we want someone to actually join the executive team, we want to see our academy background. Yes, we want to see what you're passionate, but we want to see exactly what skill sets can you add in the future, how adaptable you are to build the team. And that's what I did. So when I started out initially, even in U BC, I had a couple of my best friends and that was not the best decision. I'll agree. We were all talking about girls.

We were drinking a lot and we are not focusing on business, that's not good. But then we had some changes. What we did was we like to see what we could learn from each other. I saw that my C O partner, he's the youngest machine learning up in Canada right now.

He has like six published papers. That's what he says. Uh maybe he has more. Um let's say I'm a entrepreneur and I have a lot of like experience in terms of finance, in terms of business development. And all we like to exchange skill sets in the last eight or nine months and I have exchanged skill sets with each other which has allowed us to scale both as entrepreneurs. He has taught me basics of understanding database management.

Now, I can understand what a system architecture diagram looks like. I understand what a process flow looks like and he understands what it means to go in front of a venture capitalist pitch about investment deal. Talk about collaborations, understand term sheets, legal documents. Now, this was not taught to us, this was not at all planned in our educational curriculums, but this was something which we exchanged and that's what startups do usually. And for all the entrepreneurs in the room, I'll give that to you as my secret recipe.

I exchange my skill sets with all the members of my team, including Eric. By the way, Eric is on mining engineer managing ops across five cities in nine and he has been able to do it because yes, he has an act for all the details, but he has also been able to work with the people because he's so detail oriented that he notices everybody's positives and negatives and that's what comes in when you're talking about talent. The talent pipeline in Canada is a little bit complex. I see there's a lot of diversity. There's a lot of challenges and yes, the market is difficult because there are harsh conditions on us. But as entrepreneurs, as a founder myself, I always look into the bright.

I I know I'm the cherry boy optimist. These are the hard eye realist of women in front of me. But the fact is that I like to see people that they can learn from each other, they can adapt into skill sets in the future. And by the way, when I'm making the hiring decisions, this was just this morning, I hired a marketing intern, not because she was in marketing because she knew at least 18 A I tools which could do the job of a marketing person in just 30 seconds. I hired her because she knew all these 18 tools because what you need to hire us, not for what they know and what they have learned, but what they are willing to learn and what they can prove in the future. And that is what will lead you to expand.

Your teams, will lead you to expand your businesses and lead you to scale across different provinces. And yes, I'm quite young. You don't have to listen to me, but I guess Din has been scaling and you should listen to the people behind Dyne. That's the team. So talk to the team, they'll tell you the same thing about the talent pipeline in Canada. And of course, we want to help you guys as well. So give us your feedback and we'll be more than happy to chat about it.

The dine guys are all at the back eating because they can only get a break when Arnav is on a panel. If I'm talking, then they have to like, you know, enjoy the show. Um Jo joking aside. Uh So, so I want to riff on a couple of things. Uh Mike just first on talent. Um And I, and I want to use that to pivot to talking about where our institutions need to go to support startups.

So, um again, I'll just go, go to 10 years ago, 10 years ago. Um you know, the University of Waterloo kind of a call it a middling university in terms of the rankings, uh T M U formerly called Ryerson, again, kind of a middling university in terms of the rankings. But uh you know, challenge was identified by organizations like Mars uh that, you know, Canada needed more software engineering talent. And so, you know, a number of the folks we talked already about immigration, folks are coming here on the startup visa. Folks are coming here on, on in all sorts of ways to found companies. A lot of those folks are coming here on student visas, right? So fast forward 10 years, uh you know, with the leadership at T M U and the leadership at Waterloo. Uh and you know, T M U is now the most applied to school in Canada. Uh a huge chunk of that is for software engineers and a huge chunk of those are, are immigrant software engineers who are here on student visas. Uh University of Waterloo is now considered the gold standard anywhere in the world for software engineering. And then that's happened in under 10 years. Um You know, if you, if you're a software engineer and you want to apply to a Google or Microsoft to work on open A I. Uh they're looking, there's a, there's a drop down box for University of Waterloo Engineers.

That was not the case uh not too long ago. So from an institutional level, I think on the talent front, Canada has done a pretty good job pivoting to uh you know, identify a need and then try to fill that gap. Um The flip side of that coin uh from an institutional response perspective is um I, I wish I could say I could count on one hand, but it would take me about four hands to count the number of startups just at 1 11 who routinely will say to me, you know, we have and specifically in fintech and health tech to Chris this point who say to me, uh we have much more luck selling into the US market than into Canada. Um And that's both a public and a private sector challenge um that, you know, Canadian large institutions uh are not as active buying our own technology that's developed here as American corporations and institutions are. So we, we do need to get better. Like I, I really do think it takes a whole of economy, institutional approach. Um you know, Christos colleagues and the Board of Trade have written about this on the procurement side. Uh You can check out uh I think an op ed that young wrote and I think it was in the Toronto star just, just a, just, you know, two or three months ago. Um It's a major challenge that, you know, uh Canada needs to get better at. OK. We spent a lot of time talking with legendary talent, which we produce great engineering talent and talent over your universities.

One of these of some of the States, it goes to different places, we bring people back but not enough to go around. But one of the things that we don't have enough of in Canada, um and it's not really where I think it's, it's not a problem that's talked about a lot. It's just pure commercialization talent, people who know how to sell people who have the networks, who people who know how to actually don't build the proper dashboard on it. We've seen a significant difference in the longevity of a company depending upon when they bring in CFO on. Like we just see the difference, you can have the best founders in the world. And if you, if they, if they're not four time founders like who have e the stripes of all the financial mistakes that you make along the way as you learn how to do it. Um uh it, it, you can see the difference it makes in a company ability to plan for the future when they, when and they can focus on unit cost to get their profitability and manage kind of their cap table with experience and knowledge and capabilities. So when we talk about our educational systems and we talk about our immigration policies, we need to make sure that we're taking in the business side of these, these companies as well because that's often the make or break. And you know, we can build great products.

If we don't actually grow them and scale them, they're not actually gonna remain and be uh be the the kind of the the potential that they actually achieve. So we have, when we talk about the, the startup ecosystem, we have to get beyond the conversation about engineering because if you actually, if you actually go, you know, the the the ecosystems that have strong kind of finance and sales and, and headquarter companies that buy the, they're the ones that get bigger, they get companies that buy actually the products and, and services that they're the ones that the companies grow and actually get bigger and self regenerate. Whereas if we don't do that side of the ecosystem and that's a sign of maturity ecosystem, when you move from one side to the other. So yes, we don't have enough engineers. It's one of the biggest I hear from a lot of our companies, early stage companies, what I hear as they start to grow is we don't have enough commercialization talent, which is on the more uh customer success sales go to market marketing. Um And, and that understand more Canada has been A B to B market for so long. And if you look at the way the world is buying, it's people who have network effect experience, people who actually understand kind of how to build different types of models that aren't just B to B sales and in a lot of ways. So we have, we have these gaps in terms of things that we need to focus on. And that's when you look at the university where I'm excited is that we now have sales training in the university cities and, and, and, and starting to be able to focus on that side of the ecosystem. Because if you look at it to have a vibrant ecosystem, you need to go across the board in terms of uh not uh in terms of making sure that you fill in all of the gaps that exist. So that's kind of um when, when we sit at bars and we look at the, the ecosystem and the things we do, we, we run a momentum program which is for a later stage and really what we do is we help finance teams, we help sales teams, we help customer service teams, we help kind of deep in the marketing and the talents and the culture. Um you know, and, and, and, and kind of try to provide that added support into the ecosystem. So it's, it's really important when you talk about institutional support that we have um uh you know, we have all of the ingredients except for experience to be able to really make this so big and, and it's, it's interesting, right? Um Tech has the Chris has the two North list.

You know, we could have had a true north list 10 years ago, five years ago, five years ago, we could have had a true North list. We didn't have enough companies getting to that size and scale of what we need to do. And one of the things that's interesting is, um we wrote a paper in 2021 parts that we call good better best because our government was, was looking at the startup ecosystem and they're reviewing exits as a negative, right? So we, if you think about Canadian attitudes, they reviewing when I, when I found her exits, they're like, well, they're selling out and I'm like selling what they're privately owned company, it's selling out the, the risk that they took. Like, what, what do you mean they're selling them? What are they selling though?

The Canadian dream, the Canadian Dream is that, is actually supposed to be built on the backs of people taking risks to doing what they do. And that's a lack of maturity and understanding that when you build an innovation ecosystem, you need exits at the early stage, you need some to get to the later stage, you need ones that are big. I mean, we spend, how much money did we just recently spend to bring, to buy a branch office, uh, um, an R and D center for Erickson and to buy a manufacturing plant for Volkswagen. Like how much money do we spend to buy that?

That's a good outcome and a good, better, best model. That's a good outcome. You're gonna get good economic returns from that activity. So I'm not saying we don't do that. But imagine if we spent the government spent the same amount of money to actually find headquarter companies here, like to pick some winners and to actually anchor them here so that they could be the supply chain that we need. So for me, when you start to look at this, we have to be really, you have to look at the long game and what we're trying to build and it starts with the people and it starts with the founders and it starts with all of you starting companies like dying, getting through that person phase, getting it and then we need to all start to focus and generate around these other ecosystems that are developing. So when you, you, you know, you asked a question earlier about, about, you know, what, what do we think of the Canadian ecosystem?

And, and I'm like, we're so close to being there in 2023 we're in danger right now. The pullback of capital in this ecosystem is a problem, right? It's a problem in terms of, um in terms, the valuations at the later stages is a problem. Companies will fail. That's part of the risk, not say companies shouldn't fail, but we can't afford to lose a whole generation of series a companies right now. And that's the risk that we're at.

Maybe it's worth talking about this funding bit for a little bit because maybe not everyone's as deep in it. What's the um current climate looking like in the Canadian ecosystem or beyond for Canadian founders looking to raise? And what do you see that is working versus what isn't working today? How do you break through some of these challenges that you've described um and navigate these turbulent seas to, you know, rise to the top or at least try to survive long enough until the dynamics change again. And do you have any thoughts or perspectives on that?

I'm gonna, I'm gonna put Arnab on the spot because they've, they've recently raised. I knew this was gonna start with me. So, uh as most of, you know, just uh had oversubscribed crone and you're happy about it. Thank you so much for that community. Uh But the fact is that it is difficult for founders to get this. And uh Christie is very right.

The funding vehicles in Canada are putting valuations down. And this is a challenge which every founder faces. And by the way, for all the founders and entrepreneurs, students over here, how many of you guys want to raise capital this year, including me as well? And the challenge has been that uh how many of you guys want warm introductions to your V CS or angel investors? Warm introductions like one degree introductions. Great. So the challenge with this is that yes, Canadian ecosystem is good. Like I spoke about people introducing me to a lot of others, but you'll be surprised, raised its entire round within 11 weeks. And in 11 weeks, we were raising a small seed round of about 1.5.

We over subscribed to two and still had $3.6 million on the table when we walked away. And this was all possible because of a different philosophy. One of my mentors taught me this mentor, I would not name him because he's a very high executive in Amazon. No offense to uh Microsoft collaboration.

He's not an A W I can definitely assure that he is an Amazon prime and retail. He has never done anything of a, he is actually a supply chain guy. He taught me something very basic about people. He told me that his entire supply chain network works with people. And I was like, why are you telling me this? You know, founders don't give a damn board supply chain right now.

I'm, you know, I'm building a tech company. I need to build my team. I need to build my valuation. I need to build my data home X Y Z. And he was like, no, you need to realize that you're gonna raise in the next six months. You need to start building connections with people. And he started pushing me to go play golf games, pickle ball, uh swimming by the way, I don't know how to swim. So it's kind of funny and he pushed me to go and present myself in all these weird things, everything but conferences, he's like in conferences, you will meet great people who are willing to bet on you because you are a fun little thing.

It's like, you know, going to a match and trying to see which team is going to win. You're supporting one team or the other. But the real thing, the real fans are there every goddamn game, which means that the investors who want to back, you will be there in that event when you're pitching. So what happens with investor relations in Canada which worked out for us? And in just 11 weeks, we were able to do an oversubscribed round even in this market condition was that my entire game began, began last collision. So about a year ago, I started building six months of relationships.

I never pitched them dying. I never pitched them about money. I never asked anything. I just build relations by doing simple things, like doing cocktail challenges, going out for a game of golf, going out for a game of pickle ball. I didn't even know that sport and like, you know, enjoying different things as experiences and trying to learn from them. And when the time came in December and everybody told me that, you know, December is the worst time to raise because everybody's going for Christmas and holidays.

I just gave them a no, I was like, oh, by the way, in January, I'm planning on raising but, you know, I don't know what to do and how to do this. Uh Do you think you can make some introductions? And can you guys help me out a little bit here? Everybody stepped in. I had sent out exactly 12 emails and 11 of them responded saying yes. When I asked those 11 to make introductions, all 11 of them said yes.

When I asked those introductions to have meetings with me, everybody wanted to see the dime product. And by that time I had to keep up my word and that was setting up my team. So all those six months, I was trying to go lobby and do all the networking, which was not investor relations. It was just building friendships. I actually was able to build my team, I was able to focus as a founder and CEO building my team, my operations, my K P I S and all that stuff to build a data room, which was able to present itself in January. And between January till like February mid, we had the entire round coming in together with a couple of V CS and our founder mentality was very simple.

We wanted to raise our series A. We knew that Canada is very difficult with series A. So we wanted our series A which is going to be in the next one year, I can say to be in maybe entirety of North America having us investors and Canadian investors coming together. So what we did was we split the round into two halfs. We took Canadian investment money. All Canadians focused V C money about 60% of it and the last 40% we filled in with some strategic investors who had connections to states who had LP S in States because rather than going for the V C firms, we went with the ones who give money to the V C firms and we saw that they can convince the US V CS to now come towards us in Syriza. And that's what we're gearing up right now. So when it comes to raising capital, when it comes to raising the fund and fund raising, it is challenging, I'm not gonna deny. And personally, by the way side note, I have mentored about 40 startups in U BC.

I was an entrepreneurship director for U BC as a student. And out of the 40 startups I've helped about 16 of them do fundraisers and each of the fundraise cycle takes eight or nine months and it is difficult. The founder is completely drained, he loses, the motivation is very difficult to keep up the team and a lot of things. But at the same time, the ones who succeeded were always the ones who work behind the scenes. They never cared about raising the money.

Just to keep the team afloat. They raised the money because they believe in the product and they built the team to actually keep up with the business. So for all the founders and all who are listening, maybe I would recommend that if you're raising money, don't do it just because you need the money to keep your business afloat, do it because you need the money to get your passion to the next stage and to all the people who are building the teams, you should build the team to deliver on that money. You need a team which can execute that. And when we did that, we saw the success with it. And of course, it's not just dying.

I've seen a lot of other startups doing it, but the ones who fail in the Canadian ecosystem are the ones who think that yes, if I go to investment summits and pitches and I make an introduction and the guy takes a meeting with me that's done. No, that's not the end deal guys. Come on, he's meeting you for the first time. He's not gonna be the one watching for you. You need to go beyond that.

You need to actually meet the person, understand the investment thesis, they need to understand your business model and once you have the trust and credibility with it, you are ready to take the next step. It's like going on a date. You know, the first date is essentially you just checking the vibes. The second date, you have done a little bit of background research on each other. You know who the company is, who the investor is the third date. Now, you guys are legit thinking about it seriously. So don't mess it up, actually take initiatives, go ahead, play along, see what life takes you and it's experience and that's what investor journey is all about. And I think, I mean, Matthew, you've seen so many startups do it as well. I'm glad he didn't go past the third day and I know Matthew probably have so many thoughts, but I saw everyone write down, pick a ball like as like a super important like fundraising, Tim, can you just explain what the hell pickle ball is?

No, I mean, honestly, I'm really bad at it. I just do it for sometimes fun. I'm a tennis player. I enjoy tennis more than pinball. But yeah, I was just giving it as a reference point. I was sharing my story.

What worked out for me may not work out for you, but what work didn't work out for me should be something you guys should avoid because these are things which some founders make as takes in early stages and you need to really foster the relationships with your investors, build their trust within the community. So that when you guys are actually raising funds and when even nine wants to raise funds, people will say that, you know, let's support them and it's not like you want something in return. It's just the fact that you want to be part of this journey and that's what makes entrepreneurship so exciting for me. So a couple, a couple of lessons that I would draw from, from your successful fundraiser, one great companies can still raise and they are. Um and two uh you know, you guys obviously ran a very tight process, right of building your pipeline, you know, building relationships before you needed to make an ask, right? You guys, you, you guys didn't just start making asks that the day you needed money, you ran a meticulous process leading up to it. And so if you run a disciplined and meticulous process and you have a strong company, you can't raise money.

The other thing that I would say is capital is borderless. Um I think my, I think you guys are probably tired of hearing me as a broken record saying, well, 10 years ago, but I'm gonna give you one more 10 years ago. Anecdote. So 10 years ago, Microsoft Azure along with Aws and Google Cloud, approximately 10 years ago made it possible for startups to build anywhere because of cloud infrastructure, right? You didn't, you didn't need to be located near a server farm. It took about eight of those years up until basically the start of COVID for that to become realistic as a cultural norm, right? Even immediately before COVID and Krista can tell you the same uh big time V CS were still saying to Canadian companies. Yeah, we'd write a check but you got to move down to the valley, right?

Nobody says that anymore. COVID finally made realistic what Microsoft Azure and the other cloud providers made possible a decade ago, which is you can build anywhere and capital is borderless COVID for the first time, made it possible for an American BC to say to a Canadian company. Yeah, we'll invest in you and you can stay where you are on zoom in Toronto or wherever you are. In fact, we've never even met you in person and we'll write a check into you now. That's the norm. Right? Absolutely. I, I didn't want to get into the dry tax stuff. Um But yes, but yeah, Poli policy infrastructure and then suddenly COVID as the cultural norm that build where you're strongest. Um It's OK to be remote.

There's no more requirement that you have to move to Silicon Valley uh to be physically near your V CS or be near server farms to build a great company. Um You know, Arno's company is being built out of Vancouver and Toronto. Uh I presume nobody wrote you a check with strings attached saying, well, we need you down in the valley that that would have happened in 2018 or 2019 even. So what do you think is the future of this? Like where does this lead us? Oh, man, what a question.

I mean, the topic is future of startup. Uh Well, look, I I think the Canadian uh ecosystem, it's still early innings. Uh We need more of everything, more immigration, more V C funds to pop up. We've got some great investors in Canada. But uh you know, you can still put together at 1 11.

We have what's called the V C look book and it's for V CS at the stage of growth that our companies are at. It's still only about 200 firms, right? Uh In the US, you would not be able to put together a look book that you can scroll by in, in two clicks of the mouse. Um So we do need more sources of capital that is happening, right? Like we're starting to see that network effect, that virtuous cycle.

You're starting to see people who say exited early at Shopify. Um and, and made really good money and now they're becoming angels and they're writing angel checks into the network. So they're encouraging the germination of more companies. So you're starting to see that happen. But uh more of everything, more infrastructure like Mars, uh more sources of capital, more people starting BC firms, more young people in the stream starting companies and trying something out.

I think it's 65% of capital invested to Canadian companies as well. So it's, it's, it's more than 50% of all the capital that is put to use to build our companies comes from foreign um V C. So when you, when you look at the uh your, your investor networking, it, it, you need to start early, you need to start early with uh and the good news is before you start to get on planes to meet them. Oftentimes they're here, they are coming to Canada. Um And that's uh that's the important part to make sure that, that, that you, that so that you meet them early, not necessarily to your props, you meet them early, not necessarily just when you need money in four months, you need them early. And that's, that's part of what, what is the, the, the big for off of this ecosystem is that they are coming to Canada and they're coming looking for companies, right? And they, they're looking for Canadian type companies because they're building the solutions to the problems that the world has. And that's, that's why the world is coming here to the best in our companies um in, in a big way.

We're, we're getting close on time. So I want to ask one more question because I think it's so core to partially what we're seeing here today. But also what we've been talking about, which is this like super friendly Canadian collaboration. We've got Mars, we've got 1 11, we've got Microsoft, we've got uh you know, an amazing budding Canadian startup dine. What do you feel you would love to see to be true over the next 12 to 18 months around collaboration and partnerships to help amplify the Canadian ecosystem.

You can touch on anything. I know Chris, you've talked a lot about larger enterprises that are Canadian adopting Canadian built tech, maybe that's somewhere you want to go. But I would just love everyone's kind of thoughts on that collaboration in the next 18 months of how we can go work together to make this true. I want to go the other way. I want to go the other way on your question, Mike. Um uh And, and, and I'm uh sort of provoked or inspired by um you know, having seen a showing of the film Blackberry last Night, um which is not yet in theaters. But um you know, for, for those of you who are maybe super new to Canada, the smartphone was invented just down the road in Kitchener Waterloo by Blackberry. Uh you know, after a few years, it was usurped by the iphone. But in, in the grand scheme of inventions in history, uh the smartphone is up there with insulin as you know, one of the most notable global things invented in Canada. And so I want to go the other way from collaboration.

I want to see Canadian companies get their elbows up and say we want to be the globally dominant player doing acts. Uh And I want to hear it more, Arnav doesn't have this problem but, but a lot of, but many Canadian companies do, right? They sort of hide their light under a bush and, and they're afraid to say maybe what's on their mind, which is we want to be the globally dominant player doing acts and we want to be, you know, a Blackberry or a company that's become globally significant and dominant even for a period of time. So, um yeah, I want Canadian companies to get their elbows up and, and not be afraid to, to state the fullness of their ambition. Get a little less Canadian and a little bit more bold.

Yeah, I think so. So it's the generation, seventh but seventh generation makes you atypically Canadian, fair enough, fair enough. Um When I look at what, what I would like to see. So of course, we, we, we talk a lot about bold and, and going going big in terms of what they have, what happens. There's a, there's a um there's a little unknown fact about the Canadian sort of funding is, is how good we are at revenue funding. So I am gonna go to the, I am gonna go to the procurement side of this because um because I think you can only build the globally leading companies if you actually get people using the products and stuff that you actually serve and, and you need to spend um over index on that in, in the short term. So it, it's one of these things that uh when I look at it, it's um pre pandemic and pre 2023 the tech ecosystem used to be the ecosystem that trialed a lot of the new adventures, right? It was, they were always the early adopters, they were always the ones that you went to. So what I would like to see happen is between entrepreneurs, between ecosystems, between um uh just relationships that you build uh is to get is to get the word out and the adoption driving on how to actually use the technology that's built here. So for me, what I would like to see from the big collaboration and our government needs to buy all the way to our, I call them sneeze. But I heard, I heard people tell me that that's not a thing that it was actually sme s but when I say sneeze, that's what I eat because I was laughed at recently for my colloquialism of sneeze.

But, um, uh, it's, it's that ability to get when you get to know a start and you're talking to some of your, tell them about it, tell them about the next one. So that's where I would like to see more partnerships. I'd like to see more conversations. Those of you collisions coming soon. You go there. Uh, don't just talk about your own, talk about the three other startups that you know, and just keep trying to get that adoption growing because we're not going to be globally category leaders if we don't actually encourage the adoption side of the work that we do. So that's where um uh I really like to push on people to solve the hard, hard problem in Canada of adoption very well said, like I look forward to getting that in the next 12 or 18 months as an entrepreneur as well. So the biggest thing for me uh as a founder, as an entrepreneur is that I love being in an ecosystem. And the reason I chose Canada uh against us, which is a decision our entire team made about four or five months ago, whether to expand from Vancouver towards eastern Canada or to go south towards the Bay Area was because we saw that the Canadian ecosystem was something which usually people don't tap into. So in the next 18 months, I would say the biggest things I look forward to coming up with partnerships with other startups. And by the way, 1 11 and Mars are a great place for it because we meet so many like minded individuals that we want to discuss collaborations, we want to share resources, we want to build with you guys. And the biggest aspect of any ecosystem, the reason it's called the ecosystem is because a lot of organisms, a lot of companies can live there together and that's what Canada needs to build on. So if I have to look up to something, it will be just two simple things. Like I said, it's people and partnerships.

I want to see us taking a little bit more risk and us trying to say that yes, we are a niche community, but at the same time, we are bold like what Matthew said, we are daring that we can take the next step in terms of putting our ideas and working on them and trying to see how these ideas can be transformed into reality. And that only comes through only if we support each other. And that's the partnership angle. If we work together and collaborate on these things, it is possible and being honest and frank with you. If a 23 year old kid from Vancouver could bring a couple of you guys together and all the partners together through a network of my lovely team and individuals, then what stops each one of you from doing it and people in this room are already doing it. And I just want to see this more exemplified, more amplified and make a case that we each can take a small step towards a better community. And if the community comes together, I know collision is coming and we all will be crazy next month in Toronto. But the fact is that if the community comes together, it needs to stay together for a little longer than just one or two big events, it needs to come together for every event, every month, two or three months down the line, supporting each other, bringing founders, founders, friends, families and also making sure that we can enjoy from learning from each other because none of us are perfect.

Yes, there are a couple of extra years of experience which people in front of me as well as beside me have. But the fact is that, that inspires me that tells me that when in the next 10 or 20 years, I'm gonna be sitting potentially in your seats in this seat or even push my kids to do something else. I'll tell them that, you know, I would not look back and regret anything. I took my best step forward and I'm so happy that everybody with me was able to take that risk and that only comes to one simple thing. Just take the initiative. Don't be afraid. All you got to lose is some extra hours a day, but that couple of extra hours a day goes a long time and that's what we need to build together the Canadian economy. And I'm very proud to be a Canadian entrepreneur.

I look forward not just to scaling down across Canada and North America, but making this go global in the next five years. And while I'm at it, I might, you know, share some couple of drinks, have some fun challenges for you guys. So stay around support, not just me but my team because they are the ones who are really pulling this through. So yeah, that's my answer that in the next 18 months, I'm hopeful. So just people and partners, Krista Arnav Matthew, thank you so much for today's dialogue.

I learned a ton. I think everyone hopefully got a lot of value out of today's conversation. I learned not just about our current climate, some challenges and good things about the Canadian ecosystem. It can't always all be good and you know, Ro roses, but you know, we, we got into some hard topics and I think we talked a little bit about what's gonna make us successful and we should all be doing in the months ahead. So thank you for joining today. You've been listening to the pitch, please pitch pitch, please hosted by Mike Thibodeaux. Tune in for regular episodes and show notes at pitch, please dot C A and make sure to give us a follow on your favorite podcast platform.