Silicon Valley-based Canadian ex-pats organize to assist tech firms back home

Giving back and making deals

Canadians living and working in Silicon Valley's tech sector have banded together to assist companies, entrepreneurs and investors back home to find the funding and expertise they require for growth — the latest initiative to find common ground between the two jurisdictions. C100 was officially launched last week in Ottawa with several of its principals featured prominently in a national conference on venture capital.

Although C100 is still in its infancy, the non-profit group has experienced a major outpouring of support from Canadian ex-pats in the Valley with 60 charter members and hundreds of general members signing up to participate. There are an estimated 300,000 Canadians living and working in Silicon Valley out of a population of slightly under six million, providing a rich pool of expertise from which to draw.

Modelled on similar organizations of Indian, Irish and Israeli ex-pats living in the Valley, C100 recently arranged for 20 entrepreneurs to visit Silicon Valley under the title 48 Hours in the Valley, providing hands-on mentorship. To date C100 can trace its mentoring impact to five companies that have received $45 million in venture capital, with another firm about to secure Silicon Valley-based financing.

In late May, several key members embarked on a cross-Canada tour to raise the group's visibility and gather support, culminating with an official launch May 25th and a panel session at the annual conference of Canada's Venture Capital and Private Equity Association (CVCA).

"I'm completely overwhelmed by how passionate Canadian ex-pats are. The last five months have been a whirlwind … We all talked about what was happening from our perspective and frankly the real need to give back. We all benefited from a great education — many people have had a tremendous amount of success — and felt it was important to support the entrepreneurs that were coming up," says Chris Albinson, managing director of Panorama Capital and C100 co-founder along with Anthony Lee, a general partner with Altos Ventures. "There's a networking and support element but also critically taking that community and tying it back into the innovation economy."

There's no doubt that Canada's tech sector and the investment community that supports it are facing stark challenges. Unlike the US, Canadian venture capital (VC) has never recovered from the double whammy of the tech meltdown and bursting of the dot com bubble in the early 2000s. The latest data from Thompson Reuters show that VC investment has hit its lowest point in 15 years with little sign that the trend is about to reverse (R$, May 21/10).

high-level membership

C100 is comprised of entrepreneurs, investors and executives of major tech firms such as Apple, Cisco, Electronic Arts, eBay, Facebook, Google, Oracle and Microsoft. Charter members pay $800 each to fund the group's activities and are accepted after a careful screening process to ensure top-notch leadership. In addition to its own membership, C100 has created ties with 12 so-called seed partners in Ontario, Quebec, British Columbia and Alberta — venture firms and incubators that are the Canadian eyes and ears for the group, which is in the process of hiring an executive director.

C100 already appears to be succeeding where a previous attempt at a similar venture floundered. The Digital Moose Lounge was launched several years ago with both networking and mentoring functions but the latter was abandoned when it became evident that the organization was being used by service providers with vested interests that conflicted with its stated goals of helping Canadian entrepreneurs back in Canada.

C100 has established three objectives: mentoring entrepreneurs, cross-border networking and policy. The latter, headed up by Lee, is in the early stages of development but plans to offer advice to Canadian governments to enact changes like the amendment of Section 116 that eliminated onerous compliance obligations of tax reporting for investments by non-resident venture capital funds.

"Section 116 is a great example of regulatory change to make it easier for that successful tech exec or entrepreneur in Silicon Valley to say ‘I like this idea and I'll write a $50,000 cheque and do a seed investment in a company'", says Albinson, a native of Kingston ON.

C100 has a host of networking and events planned including the Grow 2010 Conference in Vancouver on August 19-20, featuring a large delegation of talent from Silicon Valley focused on digital media. Its events also dovetail with initiatives being developed and implemented by the S&T personnel in Canada's consulate in San Francisco.

Last fall, the Department of Foreign Affairs and International Trade (DFAIT) hosted a series of California Market Access bootcamps across the Western Canada focused on assisting Canadian entrepreneurs in the new media and wireless spaces interested in pitching to venture capitalists in California. DFAIT personnel were also instrumental in assisting the ex-pats behind C100, leading to an informal dinner in April/09 that established the basis for the organization

"We've been bringing the best of Canada's entrepreneurs to Silicon Valley and with the Grow conference we're trying to bring the best of Silicon Valley up to Canada," says Albinson. "It's about trying to get the circulation of ideas, people, capital and get them moving."

Canada has a great international brand for its engineering talent but doesn't resonate for its efforts at commercialization, says Albinson, adding that Canada must divest its fear of brain drain and — like other countries such as China, Ireland, Israel and China — view Canadian ex-pats as a national asset.

"When you're starting a company, what you really need is people with good contacts, strategic thinkers and a person who can get in the trenches with you," says Angela Strange, an Ottawa native who moved to California to attend Stanford and stayed.

Strange was part of the C100 panel at the CVCA conference, as was Katherine Barr, a native of Perth ON and a partner with Mohr Davidow Ventures. Barr says Canadian entrepreneurs should take better advantage of the growing trend towards globally disbursed management teams.

"You can leave the development team where they come from and establish marketing and sales in Silicon Valley where there's great serendipity," says Barr. "You need to create a similar ecosystem in Canada.

Albinson agrees and says the Canadian government could do more to connect the players in the innovation system so that talent, capital and ideas flow more smoothly.

"It doesn't seem like there's the leadership in place that can look at the whole ecosystem and make two or three quick changes to get it all aligned," he says. "There are some easy things to do to more closely couple the innovation ecosystem. I think they (governments) need to look at it holistically so they can understand where it's breaking. What's coming out of the universities is breaking and the VC side is breaking. It's breaking because it's not leveraging and coupling with people like the ex-pat community in Silicon Valley ... But all the elements are there — great entrepreneurs, great companies and things to celebrate."

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