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Gagglescape tracks the flow of venture capital and angel investment in a global economy.
What Are The Top Emerging Companies? Be Ready For A Surprise
On the weekend, Funding Post announced the winners of the "Third Annual Pitching Across America" competition. They claim that it is the largest venture capital competition ever held. Think "The Dragon's Den" to the power of 10 and you'll have an idea of their process. Over 100 venture capital funds and angel investors judged the pitches of some 300 businesses in the United States. Rated on a scale of 1 to 10 of venture worthiness, the emerging companies vied for top place in the competition. Who won? Was it a Web 2.0 company? Nope. It was, drum roll... a glass manufacturer. SPD Control System produces a controllable window that enhances energy conservation. Sounds like a worthy product. Who was second? Surely a social-networking firm. No, again. Graft Solutions Inc. grabbed the runner-up spot. They make surgical grafts. O.K. Third? No Internet company again. This time it is a nanotechnology company, NanoPolyQ of California. Here is the top ten list: SPD Control Systems Corp. NY
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Posted by the editor on 11/02
Income Trusts Die A Well-Deserved Death
 I have never been a fan of income trusts. First, they offload tax to individuals who are often less capable of managing the load and, far more importantly, they stymy innovation in our financial sector. Why bother investing in companies that may have a strong future when you can invest in an income stream from a mature business? Income trusts vacuumed up strong but infexible companies like the Yellow Pages but had no interest in the possibility of new markets. R&D investment? What's that? That is why when BCE decided it wanted to become an income trust the government had no choice but to say, "hold on there, somebody has to keep us competitive in the non-energy sector." You may remember that when BCE said it was going that route it also decide to concentrate on "well-established" businesses. No. More. Innovation. That was bad enough but here is a IT side-effect that no one seemed to talk about over the past few years: one of the reasons, I speculate, that Ontario's venture capital market has been so soft is that with everyone in Toronto's financial sector chasing big, fat income trust conversions they had no time left to prime the entrepreneurial pump. That left a lot of good startups at the bottom of a Darwinian, survival of the fittest, pond. So, the income trust king is dead! It is about time and we wonder how the markets are going to react this morning to the news. Entrepreneurs, it is time to dust off those financing pitches and hit Bay Street again. Who knows, they may just have time to listen to you now.
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Posted by the editor on 11/01
Is DIGG Worth $150 Million?
 According to Techcrunch.com, the upstart story ranking service http://www.digg.com, is being offered $150 million by News Corp. If a firm offer isn’t made in the next week or so north of $150 million, look for Digg to close a $5+ million second round of financing later this year, possibly with Greylock Partners. Greylock is already an investor in Digg, leading their $2.8 million Series A round in October 2005 (Omidyar Network and several angel investors also participated in the round).
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Posted by the editor on 10/30
Guaranteeing Failure
Persistenceunlimited.com has a concise, funny, and truthful top ten list of what to do to guarantee failure in your life. Want to know what not to do? Here is the list:1. Make your goals vague. 2. Make your goals difficult to visualize. 3. Think and speak negatively about your goals. 4. Avoid planning incremental steps. 5. Don't do - talk. 6. Wait until you are motivated. 7. Don't set a date. 8. List why it's impossible. 9. Don't research your goal. 10. Think of anything except your goal.
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Posted by the editor on 10/26
Where Do You Stand On The Algorithm Vs. Group Intelligence Question?
In the Web 2.0 world there is one great question that determines if your an Internet Republican or Internet Democrat: Are you for algorithms or for group intelligence? As everyone who doesn't live under a rock knows, Google believes in the power of the algorithm. Their famous Google search-engine rocketed to the top based on its proprietary web page ranking system. No need for the subjectivity of mortals there. They are all about the power of government.Sites like Digg.com, on the other hand, are all about what its readers think is important or interesting. Ah, democracy. The problem is, sometimes democracies can make governing a messy process, interesting but not in line with quarterly reports. Still, Digg is a rapidly growing service. Touchstone has an in-depth blog about the great divide. Take a look.
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Posted by the editor on 10/25
Marc Canter on social-networks and location-based blogging
This video was shot at a Web 2.0 conference in Ireland. Canter gives a four minute overview of Web 2.0's end game.The synergism of social-networking and the Net are just now beginning to gel. This short video provides a glimpse into where market forces are taking us.
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Posted by the editor on 10/18
Leaving Toronto: A Non-Rapid Tranist Story
I am on my way to New York to present at an urban design and sustainability symposium hosted by the United Nations. I decided to take the only mass transit option to get to the airport rather than take a cab. I hiked to the TTC subway station and had a relatively easy 23 minute ride to Kipling station. Then things got funky. Instead of the 192 "Express" bus arriving on time, it was ten minutes late. One normal city bus connects the subway to Canada's biggest airport. It runs every twenty minutes. Sort of. There wasn't room for one additional passenger and their bags when the bus left. Can you imagine if London, England or Paris offered similar system? Not easily. This is why Porter Air is allowed to exist. people have no faith in our public infrastructure and, if today's experience is an indication, it is understandable. Think of how fewer taxis would be polluting our air if we could do something as simple as having a real express bus system leaving the Kipling station every five minutes. It would be an inexpensive solution to a grave problem. Even if it cost $5 more I know many people would pay if, only if, they could depend on it. This Thursday evening I am moderating a panel (see Sunday's posting) with some local politicians. While the panel is not about our transit system per, it is about community development. Without a sustainable, effective transit system community development in our city will always be an illusion no matter how well-considered.
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Posted by the editor on 10/17
Analyse This: Google’s Return On YouTube Investment
 " Instacalc.com has this financial analysis of the Google/YouTube deal. It is a reveiling picture and their instant calculator software is fun too.
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Posted by the editor on 10/17
Friendster’s Precautionary Tale
 The New York Times "Your Money" section offers up a precautionary tale to all of those entrepreneurs who think they'll be the next Google or YouTube. Back in 2002-03 when online social-networking was just beginning to get traction, the biggest player was Friendster. Google offered owner Jonathan Abrahms $30 million for his product. he declined. Had he taken the money and stock offer Abrahms would be worth over a billion dollars today. Not bad for one year's work back in 2002. Instead, Friendster has slipped down the scale of social-networking properties to rank in the mid-teens. it still is a worthwhile property but . . .
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Posted by the editor on 10/16
More About YouTube
David Dalka has put together ten unanswered questions about the YouTube Google deal:10 Unanswered Questions: 1. Will users stay with the recently scrubbed and censored Youtube or will they migrate to other alternatives? 2. Why are the investment analysts and “major media” only allowed on the announcement conference call? Why not bloggers, why not the person, Michael Arrington, who broke the rumor and story in the first place? 3. Why can’t the Investor Relations, Press and Blogs at Google ever be in sync? The Official Google Blog still has no information about it. Instead there are posts on “Inside Macs at Google”…very strange. 4. This is what a multi-million dollar rat looks like, will the next of kin receive their fair share? 5. The Google Press Release states “This afternoon, we announced that we are acquiring YouTube for $1.65 billion in stock. YouTube will operate independently following the close of the transaction, which is expected in the fourth quarter of this year.” Why is this the first company that Google has ever kept independent? 6. There are a few theories on number five. I’m no lawyer, but if it’s kept as a seperate legal entity, it might be able to limit any content liabilities to that entity? 7. How much is 44 seconds of everyone’s time (maybe a bit more now) worth? 8. Eric was forceful in the call about stating that these will remain seperate entities and curiously he asserted Google Video will become even more important. Am I the only one that is mildly confused by this statement? Or is there some larger segmentation or story here? 9. Many people have asked “Why didn’t Microsoft buy Youtube?” With a large stake held by the people who funded Google, it was clear that Google had the right to make (...read more...)
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Posted by the editor on 10/12
Trigence CEO DEMOs Virtualization Value Proposition
 Trigence CEO David Roth Trigence Corp., a Kanata-based tech company, took the wraps off of its Trigence virtualization software at this month's DEMOfall 06. The company's CEO David Roth asked a very simple question to this tech event's top dogs: "What if enterprise applications just worked?" Trigence is moving virtualization to the next level by focusing on the application. Using Trigence, applications are isolated from their underlying infrastructure and put into Capsules. Once applications are encapsulated, they are ready to run and become easier than ever to deploy, configure, clone, move and manage. Trigence was one of only two Canadian companies among the 70 others showcasing their wares at DEMO - the self-described worldwide launchpad for emerging technology - where tech notables like Java, VMWare, and Salesforce.com were once launched. Trigence offers an entirely new approach to application management by eliminating the common and expensive problems related to application deployment, updating and ongoing suppport. When Trigence virtualization software creates an application Capsule, a single file contains the target application, all of its configuration files, and any elements it requires from the OS in which it was originally installed. Together, Trigence's Capsule Creator and Capsule Controller supply the intelligence needed to ensure the virtualized application just works - when, where and how you want. http://www.trigence.com
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Posted by the editor on 10/11
Google Buys YouTube
To Canadian VCs who have long been timid about entering the Web 2.0 market, yesterday's announcement by Internet behemoth Google should provide the incentive to make some long-delayed investments in the Web 2.0 sector -it's not too late. In case you haven't heard, Google bought upstart YouTube for $1.65 Billion dollars. Not bad for a company little more than a year old founded by two twenty-somethings. Of course, many of us have seen this phenomenon coming for months now. It was clear that when a surplus of digital devices in the hands of people with high-speed Internet access crossed with social-networking massive new markets would result. Maybe it is because of my experience in the academic world as Director of the Information Technology Design Centre at the University of Toronto, but it was obvious Canada offered start-ups with similar or even superior technologies to YouTube's two years ago and yet they wallowed for lack of seed funding. Too bad for them and for the Canadian investors who could have captured some of that wealth. UPDATE: The last paragraph may sound optimistic but we have to remember, there is no technical reason why a YouTube cannot have been launched in Canada. Their success is due to access to capital willing to take risks. That is the difference.
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Posted by the editor on 10/10
B5 Media Breaks The Canadian Web 2.0 Logjam
B5 Media announced yesterday that it has received an investment of $2 million from a syndicate of Canadian Venture Capitalists. Hurray for Brightspark and JLA Ventures for being some of the first Canadian VCs to join in what we are sure will be a big, lucrative market for those with the foresight to enter it now. At this price B5 is a bargain especially considering the recent string of acquisitions by traditional media companies. You may remember that we covered B5 when CEO Jeremy Wright spoke at the MESH conference earlier this year. B5's business model is premised on creating: a global new media network featuring more than 150 blogs on a wide variety of subjects ranging from entertainment and news to technology and sports. With content written by passionate people from all over the world and visited by more than two million unique visitors a month, b5 is among the world's largest online new media networks.
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Posted by the editor on 10/06
When The Dragons Bite
 Images from the Dragons Den The CBC ran the first episode of its new venture oriented reality program last night. Dragons' Den panelists Robert Herjavec, Jim Treliving, Jennifer Wood, Laurence Lewin, and Kevin O'Leary lost little time in eviscerating the first few entrepreneurs. The "Fast Recliner" exercise machine was an obvious no-go. "Time Out Naps" was too embarrassing to mention. "THE MAGIC BANANA!!!" may just be the sleeper product of the decade. But not for this audience. "It's My Card" was so-so. The "Green Tide Energy" project really is a great concept but won't even get off the drawing board for less than 100 million dollars never mind the $500K asked for (and let's face it, the engineer who pitched this idea lacked the social skills needed to pry money away from this crowd).  The evening's winner of a sort was "Cenebal Organics." Jennifer Macdonald was the evening's most polished presenter and her product, an Omega 3-based salad dressing, was easy for the panel to wrap their heads around. Her decision to give away 50% of her company for $200K was questionable. Given the growing demand for organic products and her obvious skill at selling the idea, she probably was a few weeks or months away from getting market traction. All in all, Dragons' Den did not disappoint but a few of the presenters probably should not have been there.
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Posted by the editor on 10/05
The New MIT Enterprise Forum Makes A Splash
The MIT Enterprise Forum launched the first night of its ongoing speaker series with former Motorola Canada CEO, Frank Maw. Mr. Maw entertained and informed the assembled group at Cassels Brock with his many insights into Canada's rapidly changing communications sector.Did you know, for example, that this country's ITC sector boasts some 3400 companies who generate more than $10 Billion in yearly revenue? Paradoxically, our universities are not producing enough educated workers to fill the industry's demand. With massive changes taking place in the communications sector, there are correspondingly massive opportunities being created for local companies Maw maintains. "The transition of the telcom industry to the world of broadband Internet is opening new doors for a huge number of services," says Maw. Of course, the Canadian VC industry has to get off the sidelines and commit some dollars to local entrepreneurs or the broadband revolution and the new wealth it creates will end up south of the border. Please note that the MIT Forum is open to everyone who is interested in entrepreneurship, not only MIT alumni. Thanks to Mark Lawrence of NorthCrest Partners for chairing the evening. Come to the next event. Your time will be well spent.
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Posted by the editor on 09/29
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Local News
Certicom Corp. (TSX: CIC) announced that Michael Epstein, manager of technology and standards at Philips Electronics Intellectual Property Division, will speak at the Certicom ECC Conference on November 14-16 in Toronto, Canada.
Simon Tuck over at Globe Investor has a story on the cost and the benefits the country's "Technology Partnerships Canada" fund. It is worth reading if for no other reason than to realize how much the technology sector in this country depends on government aid. U.S.-based Global CONNECT and MaRS - a Canadian convergence innovation centre - announced they will hold the 2006 Global CONNECT annual conference in Toronto, Ontario. The conference will be held December 6 through 8 at the MaRS Centre in Toronto. Communitech: Waterloo Region Technology Association, announced that it will receive $1 million over the next three years from the Ontario Ministry of Research and Innovation to help entrepreneurs and researchers transform innovations into marketable products and to bridge the gap between the business and research communities. BDC and Flintbox - an online platform for marketing and licensing academic research in Canada - announce a partnership to create a new research commercialization solution. Bluestreak Network, Inc., a leading provider of mobile TV and digital television technology, announces the completion of $8 million in C-Round equity financing by internal investors Solidarity Fund QFL, BDC Venture Capital, and First Capital Group. Nexient Learning Inc. announced that it has raised gross proceeds of approximately $5,087,000 to date by way of previously announced debt and equity private placements. Chrysalix Energy LP, a global venture capital firm focused on Clean Energy technologies, announced in August that it has closed a total of $70 million in capital commitments for its second Clean Energy fund. VenGrowth Private Equity Partners Inc. announced it has successfully exited its investment in Quake Technologies (Canada) Inc. ("Quake") following the completion of an acquisition by Applied Micro Circuits Corp. ("AMCC") for approximately $US80 million. BioSyntech, Inc. announces the appointments of Mr. Francois Michaud C.A., C.M.A., as Chief Financial Officer and Mr. Richard Lacombe Ph.D., M.B.A., as Vice-President Clinical Affairs of the Company.
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