Sutha Kamal's 90 Day blog at globeandmail.com follows the trials and tribulations of starting a tech start-up in Canada. His company, AmbientVector is in the midst of the product launch for its Nakama platform.
He hasn't been shy about talking about his dealings with investors. Here's what he has had to say about it working with Angel investors and venture capitalists:
Let me be clear: there are great angels, and great VCs here in town and elsewhere in Canada. We're even lucky enough to have one of the best VC's behind us. That said, there's still a lot of stupidity when it comes to financing a Canadian software startup, and I think it actually starts with angels...
Read the complete post on this topic, called, Pref-share stupidity... angel money in Canada
Mr. Kamal was joined by accountant and consultant Hassan Altaf at noon, Tuesday to discuss how start-up companies should set about dealing with Angels, Venture Capitalists and other funding agents.
Mr. Altaf, CA, CFA, is Managing Director of Altrius Capital Inc., a Toronto based boutique investment advisory firm providing venture capital & private equity transaction support services to both entrepreneurs and investors.
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Sasha Nagy, Business Features Editor writes: Welcome to both Sutha and Hassan, thanks for taking questions today. I think a lot of people may not understand how small start ups acquire financing. I was hoping that both of you can discuss the relative importance of Angel Investors and Venture Capitalists. I guess in an ideal world you would bring your own money to the table and then you could build your business with no regard for other people's interests.
Sutha, are there days when you wish that was the case? And Hassan, as someone who advises small businesses on dealing with venture capitalists, what is the most important advice you give clients when it comes to accepting VC money?
Sutha Kamal writes: Sure, there's even a term for it ... **** you money. That said, Ambient got lucky. We got angel money from people who knew and trusted us, including my former boss. These were people that took a bet on me, wrote us a few cheques, and even told us they wanted to write more when they figured we needed it. There weren't onerous terms: they knew that we'd do our best to take care of them as we grew the company, and if we failed, then we failed. I think a lot of the angel money that's around in Canada these days often comes with much more onerous terms, and so sure, it'd be great to start a company without needing outside capital, but it's not often an option. Also, our investors acted as advisors, and the value of their money aside, the value of their advice is enormous. That on it's own often makes taking outside money worthwhile.
Hassan Altaf writes: First off, thank you for asking me to contribute to today's online discussion forum.
As someone who has sat on both sides of the table in terms of representing entrepreneurial companies seeking financing as well as a venture capitalist investing in emerging companies (primarily in Europe/Middle East but also in N. America), I have the following opening tip for those seeking funding:
BE PREPARED! Far too often, entrepreneurs make a premature approach to VCs without having covered all their bases like developing a solid business plan etc.
