A failure to sustain
Research cited in The Wall Street Journal highlights a rather shocking statistic: About three-quarters of venture-backed companies in the United States fail to return capital to their investors.
Most venture capitalists south of the border, according to the story, cite a 30 per cent to 40 per cent failure rate, which is approximately in line with the percentages cited by the U.S.-based National Venture Capital Association. These investors "bury their dead very quietly," says Shikhar Ghosh, a senior lecturer at Harvard Business School, and the author of the study. "They emphasize the successes but they don't talk about the failures at all."
Mr. Ghosh analyzed more than 2,000 companies with at least $1 million in venture capital support from the years 2004 to 2010. He also "combed the portfolios" of VC firms and conducted interviews with busines owners. Most of the companies, he points out, fail after four years, when the bulk of investors stop providing capital.
New funding for CYBF program
Ontario is pumping an additional $4 million over two years into helping young entrepreneurs develop the skills they need to run successful companies. Its target is the creation of 400 new businesses and about 2,000 jobs within that time frame, a process already under way in the province. Through the Canadian Youth Business Foundation (CYBF), Ontario's support is designed to provide mentoring, coaching, and startup loans for entrepreneurs between the ages of 18 and 39. A press release cites four successful startups assisted by the CYBF so far, and they are:
- Dual Audio Services, a full service audio-visual company.
- Eco-chic clothing line Aime.
- Avenir Medical tool PelvAssist, which offers a cost effective, improved alternative to traditional hip-replacement technology.
- Paintlounge, a painting studio and cafe in Markham, Ont.
Entrepreneur brings innovation to government
When Todd Park explains what he does for a living, he tells people he runs an incubator inside the U.S. government, as outlined in a story from CNN. But it's not businesses he's nurturing, he's analyzing public data to help grow the economy. This terrific quote sums up the tech entrepreneur's work in entertaining fashion: "You basically take data that taxpayers have already paid for and you jujitsu it; let entrepreneurs tap into this national resource and turn it into awesomeness." Business owners were skeptical when he opened health data to the public but their stance had changed by last June, when there were more than 1,600 attendees of the government's first "health datapallooza" in Washington.
EVENTS AND KEY DATES
Google hosts a week of programming
Google for Entrepreneurs is under way until Sept. 29, and the company has teams in 26 cities from 13 countries hosting events. It has partnered with several organization's around the world, including the Branson Centre of Entrepreneurship, Urban Innovation 21, Pryor Area Chamber of Commerce, Startup Weekend, Le Camping, Communitech, The Hub, Council Bluffs Chamber of Commerce, 1871, and others to provide training and programs. There are two Canadian sessions, one in Waterloo, Ont., and one in Toronto.
The CTA@NYC clock is ticking
An initiative of the Trade Commissioner Service at the Consulate General of Canada in New York called CTA@NYC is in the process of recruiting six promising tech startups to join the Canadian Technology Accelerator from Dec. 5 to March 5. To apply, you must submit a one-page application and send it by e-mail to email@example.com. Deadline is Oct. 12 at midnight.
EDITOR'S PICKS FROM REPORT ON SMALL BUSINESS
San Francisco-based Uber has fought and won pitched battles against regulators in Boston and Washington. And since its launch in Toronto earlier this year, cab companies have filed complaints with the city and the licencing board has been threatening to lay charges against the company for operating without a licence. It's all part of the challenge of trying to carve a niche in one of the world's most entrenched industries, says the general manager of Uber in Toronto.
FROM THE ROSB ARCHIVES
You want my money? Good luck
"You have about a 1-per-cent chance of getting my money," columnist Doug Steiner wrote in July, 2010. That means you may have to pitch your idea to hundreds of people to have a real shot at raising any dough. Why is listening to business ideas a somewhat cranky subject? Mostly because the entrepreneurs and venture capitalists who do this for a living fail a lot. Mr. Steiner has personally funded a lot more duds than successes, although his success rate is climbing as he ages.
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