Two Toronto-based entrepreneurs and angel investors have launched what they say is a novel pre-seed fund and accelerator/foundry that matches large company problems with startups that they subsequently invest in. Highline BETA is a model dubbed, "co-creation", that its founders claim dramatically improves the success rate of startups while providing Fortune 500 and Global 1000 companies with solutions to challenges for further growth.

Launched in July by Marcus Daniels and Ben Yoskovitz, Highline BETA builds on the expertise gained from Highline, Marcus's previous venture that was borne through a merger of GrowLab Ventures Inc and Extreme Startups, Canada's first pan-Canadian accelerator platform.

The goal is to use the co-creation model to build venture-ready startups based on the premise that large corporations should innovate from the outside as well as within. The company hopes to raise between $10 million and $20 million from investors with an initial pre-seed investment expected this fall.

Highline BETA will focus on fintech, insurance tech/insurance, food tech, retail, media and entertainment. After identifying corporate problems in those sectors that need to be addressed, a foundry program is utilized to determined whether a startup can be help to solve it. To date, the response to the model from larger firms has been positive.

"It's been excellent. It's slower in Canada than US... but we firmly believe all the companies will be co-created in Canada," says Daniels.

To bolster the model, Highline BETA recently partnered with Toronto-based Cookhouse Lab which offers dedicated space for large insurance companies, technologists, designers, and academics to collaborate on solutions for the insurance tech industry.

It has also launched one of the first AngelList Syndicates in Canada. AngelList is a US-based website established in 2010 to link startups, angel investors, and job-seekers. Its recently added a syndication component that boosts the prospects of startups securing financial backing by exposing them to potential syndicated investors and achieving accelerated response time.

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