For a group that’s just seen a buyout in its midst – a buyout that might have been worth as much as $30-million – the entrepreneurs at Extreme Venture Partners seem impossibly young. So young, it’s hard to tell who’s an entrepreneur and who’s a university co-op student.
“Hey, everybody!” shouts Farhan Thawar, vice-president of engineering at one of its companies. “Hands up if you’re here on co-op!”
About 40 young heads rise from their computers: Almost uniformly, they look around 21, a little scraggly, and slightly nonplussed at being disturbed. About half raise their hands. Then they go back to work.
The triple threat of youth, algorithmic fervour and hedgehog focus echoes the two-guys-in-a-garage origin-stories of tech giants from Apple to Google. But they're are not grinding it out in a makeshift Silicon Valley office. Instead, they're on Yonge Street, part of a coterie of fledgling startups across Toronto. And they're wagering that, if they keep it up, the city that the Internet boom forgot won't miss out again.
“There’s a new emergent scene going on in Toronto,” says David Crow, a strategist for Microsoft, and a long-time organizer of the city's tech community. “We have great talent and great opportunity.”
After years of nurturing a tight-knit tech community, Toronto seems to be reaching a critical mass – not just of homegrown companies, conferences, and networks, but of ties to a global industry. Groups like Extreme Venture Partners “are building a pipeline between Toronto and the Valley,” says Mr. Crow.
Being close to strong computer-science universities such as Waterloo, McMaster and University of Toronto helps. The city’s size and vibrancy also make it attractive to young workers, and it’s a proven early adopter of platforms such as Facebook and Twitter.
Clustered in neighbourhoods like Queen and Spadina and Liberty Village, companies such as Polar Mobile (they make iPhone apps for big media firms), LearnHub (which connects international learners) and Five Mobile (who produce apps for The Score TV network) are part of the local tech resurgence.
At the same time, two Extreme Venture startups have been bought in the past year – most recently, BumpTop, a startup that designs 3-D desktop software, was scooped up by Google. Last August, another company they mentored, J2Play, was purchased by gaming giant EA. It's a strong start for a company that's not even three years old.
“Silicon Valley North” is a title that’s long eluded Toronto. Nortel, once a behemoth, helped make Ottawa a telecom powerhouse in the nineties. Canada’s only remaining tech giant – BlackBerry-makers Research in Motion – set up shop next to the tech powerhouse University of Waterloo. For young programmers with exciting ideas, Toronto was never the place to be – unless, as one local entrepreneur scoffs, “you wanted to write financial software for a bank.”
A lack of local venture capital is a long-standing complaint. But entrepreneurs say that money itself isn’t the problem: Toronto, traditionally a buttoned-down financial capital, needs a cultural shift. And that goes for its venture capitalists as well as entrepreneurs.
“The problem is, they’re bankers. They’re not venture capitalists. And there’s a huge difference,” says Mike McDerment, the chief executive officer of FreshBooks, a Toronto-based online-billing service with over 1.6 million clients. “They’re not people who go out and build companies. They’re not risk-takers. They’re people who understand a distressed asset and know how to take advantage of the situation.”
Investments here tend to be smaller and harder to come by than they are in Silicon Valley. And Canadians, according to some observers, are prone to thinking small.
BumpTop’s sale to Google was “a great exit,” says Brian Sharwood, president of Homestars.com, a Toronto listings site. “But is it an exit because the investors could take them to the next level, or didn’t want to invest bigger?”
