CALGARY - Calgary-based Accolade Capital Inc. has launched
a "Garage.com of the North," modelled after Silicon Valley's
highly successful incubator.
The firm, eMedici Capital Inc., is the first of its kind in
Canada to not only link technology start-ups with "angel"
investors, or seed capital, but provide them with mentors and
business services through a who's who of national firms.
eMedici, launched this month, has attracted six companies:
PricewaterhouseCoopers; TD Bank Financial Group; Ericsson
Canada Inc.; Jennings Capital Inc.; recruiting firm CNC
Global; and law firm Macleod Dixon.
They will be known as charter members, providing consulting
services to the start-up ventures at preferred pricing with an
option to reduce their fees further for an equity
interest.
Brenda Sali, regional vice-president for the prairie region
with Ericsson Canada, said the Garage .com concept gives the
Canadian consulting firms access to promising high-tech
businesses, without the need for time-consuming due diligence
of their own.
"I jumped at it," Ms. Sali said on Friday. "This one
[eMedici] will obviously be watched by others in terms of what
kinds of companies do come through the process. I'm presented
with business cases quite regularly of a company that sees the
value in partnering with Ericsson and I have to do the due
diligence, or I have to send it to our head office, and that's
not where our expertise lies."
Named after the Italian Renaissance family renowned for its
sponsorship of the arts and sciences, eMedici is modelled
after Silicon Valley's Garage.com, founded just over two years
ago by Guy Kawasaki, former Apple Computer evangelist.
"We figured there was a need for a Garage.com in Western
Canada and we Western-Canadianized the model to be more
appropriate for companies in Alberta, specifically," said
Stace Wills, co-founder of both Accolade and eMedici.
"This has never been bundled like this before in this
country," added Grant Howard, also a partner in both firms.
"Companies off the street can not go in to these firms and get
the pricing structures that we've negotiated through eMedici.
They [the national firms] are making an investment up front so
they get rewards down the road when the companies grow into
full clients."
eMedici has established a list of 25 mentors and an initial
pool of 50 "angels," high-net worth individuals, to match with
potential clients.
Scott Bolton, a partner in PricewaterhouseCoopers'
technology division, said the accounting firm, a founding
sponsor of Garage .com, has had success with the venture south
of the border and sought to replicate it here.
"This is the way for us to initiate a contact with a
potential growth company and help them succeed," he said.
eMedici joins a growing list of companies in Western Canada
vying to fill a void of venture capital in Alberta's high-tech
sector.
In the past, technology start-ups in Alberta have had to
look outside the region for seed capital and management
support. But that's changed in the past couple of years with
the launch of firms such as Sigma Technologies Corp. and
Launchworks Inc. both of Calgary. Divine InterVentures Inc., a
large U.S. venture capital firm, recently purchased 31% of
Launchworks.
"There's certainly more activity than there was even a year
ago," said Mr. Wills. "But there's still a massive need, in
Alberta specifically, for private seed equity. We don't have
the labour-sponsored funds and the government-sponsored funds
that B.C. and Ontario and Quebec have. So, in many cases we
found companies going public too early because there's been no
source of organized angel capital."
Mr. Wills, who cut his teeth on venture capital firm Oxbow
Capital Corp. in Calgary, joined Mr. Howard in 1995.The pair
founded Accolade, a venture capital firm, two years ago.
Accolade then joined forces with Hot Start Technologies
Inc., which will provide technology expertise, to create
eMedici.
"The idea of eMedici is to stay with the process in the
long term," said Mr. Howard. "Not only do we raise money
through our own network, but we put together advisory boards,
we help with management issues; how to structure the company;
how to structure a deal. It's all of those business dealings
that complement the money because you can waste money pretty
quick."
Mr. Howard, is a former television crime reporter who left
journalism in 1981 to become a crisis consultant for the
Calgary city police department. In 1988, he moved into
business consulting, launching Howard Group Inc., which has
raised about $30-million for public companies.
Technology start-ups that approach eMedici go through a
vetting process online and further due-diligence. If the
concept has legs, prospective clients are matched with
investors.
Mr. Wills said eMedici expects to expand nationally next
year, once the concept is tested in
Alberta.