BDC Venture Capital dedicates another 6 million for new Canadian tech entrepreneurs
MONTREAL, April 24, 2012 /CNW Telbec/ - The Business Development Bank of Canada's venture capital arm will issue up to six million dollars in convertible notes over two years to graduates of FounderFuel, the Montreal-based startup accelerator program. Some 40 young enterprises from all over the country in the web, mobile, software as a service (SaaS), and gaming fields, will each be eligible for a $150 000 BDC convertible note upon their successful completion of FounderFuel's 12-week, mentor-driven business "boot camp". Convertible notes are short term loans that are usually converted into shares later on in the company's life. This investment is part of BDC Venture Capital's larger commitment towards accelerators across the country, a key element of its strategy to support tech enterprises in their early, most fragile, stage.
"Entrepreneurship and venture capital investments are on the rebound in Canada; but there will always remain this 6 to 12-month critical period for many new companies when the start-up capital from the partners themselves, their families and friends starts drying up and before financing from venture capitalists and angels can be secured. Too many promising companies have not made it to the next stage of financing for lack of operating capital," explains Senia Rapisarda, Vice President, Strategic Investments and Initiatives at BDC Venture Capital. "Canadian tech entrepreneurs should be confident they can compete with the best in the world, but they need a strong, supportive "ecosystem" to get the edge. Our convertible notes program, which is one of the means we use to bolster the Canadian venture ecosystem, is bridging a financing gap that few institutional and private investors can assume".
FounderFuel, which was created by venture fund Real Ventures, is one of several accelerator programs that have emerged across Canada in the last year. Accelerator programs offer a select group of entrepreneurs the opportunity to bring their new businesses to "venture-ready" level in a short timeframe. During their 12-week stay in Montreal, FounderFuel participants spend their time in the high-octane environment of the program headquarters housed in a downtown historical building called Notman House. Over a hundred startup veterans are available to mentor the entrepreneurs and help them refine and accelerate their businesses.
"Our current cohort is very excited about this development," says Ian Jeffrey, General Manager of FounderFuel. "The potential to obtain substantial financing right off the bat is giving them an additional incentive to make as much progress with their businesses as they can during the build-up to Demo Day". "Demo Days" are the accelerators' popular public graduation ceremonies. They are attended by hundreds, including venture capitalists and angels from all over the world who come to discover the best and the brightest.
Thanks to connections made at FounderFuel's previous Demo Day last November, members of that cohort (Playerize, OOHLALA, Wavo and Seevibes) have successfully raised close to $2.5 million. The Demo Day for FounderFuel's current crop, which is open to all, will take place the morning of May 23 in Montreal (free registration at http://founderfuelspring2012demoday.eventbrite.ca), just before another important gathering for the Canadian tech startup scene, C100's AccelerateMTL. It is also on that day that the BDC Venture Capital and FounderFuel joint committee decides which of this session's teams will be offered the convertible notes. The process will then start over with a new class when FounderFuel's Fall 2012 session begins August 13. Budding Canadian tech entrepreneurs have until June 15 to submit their application directly at http://founderfuel.com/en/apply.
About BDC Venture Capital
BDC Venture Capital is a major venture capital investor in Canada with more than $1 billion in current and planned investments. It is active at every stage of a company's development cycle, from seed through expansion, with a focus on innovative technology-based Canadian companies with high growth potential, which offer unique products or services and are positioned to become dominant players in their market. Investing primarily in companies involved in Energy/Cleantech, Health and Information Technology, BDC VC makes both direct and indirect investments, often through investment syndicates with industry partners. It also undertakes strategic initiatives and investments targeted at stimulating the Canadian venture capital and innovation ecosystems.http://bdc.ca/venturecapital
FounderFuel is a mentor-driven startup accelerator program based in Montreal focused on web, saas, mobile, and gaming. The FounderFuel program features two cohorts a year (20 teams), has a network of 100+ mentors, and culminates on Demo Day in Montreal with investment pitches to a room full of investors from all over the world. http://founderfuel.com
Source: Business Development Bank of Canada (BDC)
Information: Eloi Courchesne, 514-923-3564, firstname.lastname@example.org