The cost of technology has come way, way down. So what you can get in equity in a company for the initial cheque, versus what valuations were in the bubble, is so much more attractive. What you can get done with the money is so much more, because the cost of technology has come down. What hasn’t changed is, when you get a winner, you have to fuel that fire quickly and aggressively, because the cost of marketing is still the cost of marketing, whether you’re hiring sales people or spending money online or however you’re getting the word out – those are still significant cheques, so you need to have a certain size in order to support the growth.
What about Dragons’ Den? Is the popularity of shows like this going to have any impact?
The thing that surprised me the most about Dragons’ Den was hearing the number of families that watch the show – so kids starting as young as 8, 9 and 10 are starting to learn about things that I didn’t have a clue about when I was that age. I think it’s doing its part to breed a whole generation of entrepreneurs.
In terms of the deals you get, they’re making a TV program, right? So I’m not saying it’s the smartest way to actually do investments. What it does for me is, it gives me a platform. All of a sudden, because of a reality TV show, people have an interest in what I have to say – whereas I used to have to beg people to listen to me. It gives me a chance to spread the word about what it’s like to be an entrepreneur. So if we’re able to move the needle a little bit to say look, there’s a whole generation of people who are now looking at you guys – banks and institutions – for leadership, maybe you create a publicity opportunity that wouldn’t otherwise be there. It doesn’t happen overnight, but if we’re building a nation of small-business people, and Dragons’ Den is helping do that, then eventually people will pay attention to us.
What advice do you have for entrepreneurs looking for capital?
Don’t give up. It’s the hardest thing to do right now. Taking it down a level, if you can get your idea off the ground using friends and family, who know you best, that’s a very good sign to people you’re trying to get interested in the next round – because who knows you better than your friends and family? If they’re not willing to get behind you, then it just puts another question mark there. The other piece of advice I’d have is to try to get the idea to the stage where you’ve proven something, versus, “Here’s my idea on the back of a napkin.” Because those are the ones that are really tough to get behind. So get it to a stage where you’ve got something proven, because then you are going to give up less and raise more.
And what about VCs themselves – what do you say to them?
We are a country of small-business people who are worth backing, and I think we can take on the U.S. And I think that we may have suffered from an inferiority complex that we don’t need, so keep supporting them.
This interview has been edited and condensed.
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Note: This version has been corrected. A previous version had the incorrect name for Ryerson University's incubator.