You're a small Internet startup based in Canada, and you want access to U.S. venture capital, but you don't want to have to move to Silicon Valley or hand over 45 per cent of your stock to a big VC group. What do you do?
For Vancouver-based Dabble DB, you find a guy like Paul Kedrosky, a Canadian-born venture capitalist and former technology analyst who is based in Silicon Valley but has ties to Ventures West, a Vancouver investment group.
Dabble DB announced Tuesday morning that it had closed a financing round with Ventures West, and that Mr. Kedrosky would be joining the company's board of directors. Mr. Kedrosky's relationship with Ventures West is also changing, in part as a result of the financing deal.
The amount of the investment was not disclosed, but industry sources put the figure in the $2-million range (U.S.).
Dabble DB was founded by Andrew Catton and Avi Bryant, two veteran programmers who are in their late 20s and hoping to ride the wave of enthusiasm about interactive Web-based applications known collectively as "Web 2.0."
Their product -- which, unlike many Web 2.0 offerings, already has paying customers -- is an online database-creation application. Mr. Kedrosky describes it as a tool designed for people who are using Microsoft's Excel spreadsheet "but for all the wrong things."
Spreadsheets can be imported into Dabble DB with a single click, and then become more interactive than existing spreadsheets, say the company's founders. Data can be reconfigured easily, new categories and fields can be created or deleted on the fly, and data can be shared as an HTML document, PDF document, RSS (Really Simple Syndication) feed or text file.
"There are 30 million installs of Excel," says Mr. Kedrosky, "a big percentage of which use it for the wrong things."
Because Microsoft's Access database tool is not easy to configure and use, many people and companies use Excel instead, even though a spreadsheet is not really a replacement for a full-featured database.
Search-engine giant Google recently launched a Web-based competitor to Excel called Google Spreadsheets, but the founders say Dabble DB is not a direct competitor.
"If anything, Google Spreadsheets is complementary" to what Dabble DB is doing, they said in an interview. "We've been saying from day one that we're trying to help users move beyond spreadsheets for the (many) tasks where they're inappropriate," Mr. Bryant wrote on the company's blog after Google's service launched in early June.
The Vancouver firm, whose service is already used by several companies for managing internal collaborative projects, won the Best in Show award at the Under The Radar conference in March, in the "I'd pay for that" category.
Ironically, the founders say they won a spot at the conference because Writely -- an online document-editing service -- pulled out. Writely was later bought by Google, and along with Google Spreadsheets forms what some are calling Google's Web-based Office suite.
Dabble DB is just the latest Canadian "Web 2.0" startup to attract the interest of venture capitalists and/or become a takeover target. One of the first was Flickr, a photo-sharing site and Web-based community that was acquired by Yahoo last year, for what some industry sources say was in excess of $30-million.
Several smaller Web companies have also received financing recently, including Vancouver's "participatory media" site NowPublic, Victoria-based Pixpo (another photo-sharing site), and Calgary-based StumbleUpon, a Web-browsing enhancement application.
StumbleUpon raised an estimated $1-million to $3-million from a group of angel investors -- including Lotus founder Mitch Kapor -- after moving from Calgary to San Francisco.
Dabble DB's founders said that Mr. Kedrosky and Ventures West were a good fit in part because they didn't take the typical Silicon Valley VC approach of wanting to replace the CEO with a hired gun, or wanting an excessive amount of stock.
"When we first started talking to Paul, he asked if there was anything he could do to help us, and we said the one thing you can't do is offer us money, because we don't want that," the two twenty-somethings said in an interview.
Both men said that they were happy to continue funding their service from their own pockets and through user fees. But eventually they came to an agreement with Ventures West on a round of financing.
Mr. Kedrosky, who was previously an advisor to Ventures West, will become a partner at the firm as a result of the deal. He is also affiliated with the Leibig Center at the University of California in San Diego, where he helps raise seed capital for companies that are based on research developed at the university, and was an analyst at HSBC James Capel.
