Investors

DRIVE 2019 Spotlight: How Investors Are Helping Build the Scaleup Ecosystem

Scaling companies, especially tech companies, has become the focus of governments, investors and academics around the world. The benefits of having a critical mass of high-growth firms in any region are obvious — they have a disproportionately high impact on job growth, economy and quality of life. Less obvious is how to create a scaleup ecosystem.

DRIVE, the upcoming conference hosted by Hockeystick and the Lazaridis Institute, taking place in Waterloo February 20-22, is tackling exactly that.

In its inaugural year, DRIVE will ask: How do you create domestic value in a global tech economy?

To answer the question, DRIVE is bringing together policy-makers, researchers, accelerators and successful tech CEOs from around the globe to compare best practices and highlight bold ideas.

 

Get your DRIVE all-access conference passes now.

 

Ahead of the conference, VC fund and #DRIVE19 sponsor Highline BETA and Hockeystick teamed up to discuss Canada’s scaleup ecosystem and the critical role venture capital plays in building a strong and cohesive ecosystem.

 

Building a Network for Startups

Every year in Canada, millions of dollars are invested in companies, yet a staggering amount will not survive past their fifth year. So how can scaleup practitioners work together to make better decisions and see companies scale?

According to Lauren Robinson, a General Partner at Highline BETA, building a strong referral network that includes founders, co-investors, corporate executives and partners in the accelerator and incubator ecosystem is critical.

Often early-stage companies struggle to find access to corporate or customer relationships early on to validate their model. Access to corporate partners and investor networks can be difficult for companies that are just starting out, particularly when founders are heads-down and focused on building their product, fundraising and getting that first big customer.

In fact, Highline BETA has developed a model that is working on just that — creating more access to corporate decision-makers in a way that minimizes unnecessary distraction for companies and maximizes access to those contacts that will accelerate a startup’s business.

 

A Data-Driven Ecosystem

When it comes to making sound investment decisions, Robinson says that data is also always an important piece of the puzzle.

 

“Venture capital is both an art and a science,” says Robinson. “Especially at the early stage when you’re investing in a founder and a team that’s going to grow and scale a product. At the same time, it’s also the art of seeing opportunities that may not lie in all of the data.”

 

Robinson credits Hockeystick’s open database as one way that better data builds a stronger ecosystem. In 2015, Highline VC invested in Hockeystick, understanding the challenges involved in reporting and accessing accurate financial data in the Canadian startup space. Bringing together different data sets onto one standardized platform increases market transparency and allows companies to better connect with investors and vice versa.

 

An Increasingly Diverse Landscape

Canada has taken a strong leadership role in championing the next generation of women founders, yet access to capital remains a major barrier for women looking to launch and scale successful businesses. As Executive Director of Female Funders, Robinson is deeply passionate about encouraging senior women corporate and tech leaders to become investors.

 

“We’re seeing more and more executive roles shift to focus more on innovation – whether that be through tracking emerging technologies that might disrupt their business or evaluating a startup for a potential partnership to drive growth in a new market,” says Robinson.

 

She notes that women investors are beneficial for companies because they tend to see business models differently — which means that a business model that may not necessarily resonate with male investors may resonate deeply with a woman investor.

Female Funders is also committed to gathering the data and reporting on the state of gender representation in entrepreneurial and investment landscapes.

"You can’t manage what you don't measure,” Robinson notes, “It's about taking a collaborative approach to understanding where we are as an industry, so we can see patterns, build targets and measure progress to build sustainable change for a more diverse and inclusive industry.”

 

Read the Female Funders x Hockeystick Women in Venture report.

 

It's no surprise that more funding for women entrepreneurs coincides with an increase in the number of women angel investors.

There is consistent data showing that deal flow is often sourced from pre-existing networks. This helps to explain why women entrepreneurs have a higher likelihood of closing investment when a female investor is involved.

Robinson says increasing the number of women funders can create a domino effect within the entire ecosystem. “Female Funders is focused on getting more women at the table, which often leads to more funding for female entrepreneurs, more board positions for women leaders, and more skills development for women leaders towards innovation roles.”

 

Canada’s Future on the Scaleup World Stage

As new companies continue to pop up seemingly every day, the future looks bright for Canada’s tech ecosystem.

A new report from BMO Capital Markets says there are about 241,000 tech industry jobs in the GTA alone, making it the fourth-largest tech hub in North America — and the fastest growing. It’s predicted that growth in the tech industry will continue to help drive the entire Canadian economy.

Robinson says she’s especially excited by how some of Canada’s largest corporations are thinking about the future of their respective industries and beginning to work alongside smaller companies and startups and adopt emerging technology.

For example, last year Royal Bank of Canada launched RBC Reach, a corporate accelerator that opens the door to a commercial deal with the bank to drive innovation and increase the success of partnerships with startups.

“There are a lot of eyes on Canada right now when it comes to attracting talent, capital and global corporations that are looking to headquarter in Canada,” says Robinson. “And this is just the beginning.”

As part of the inaugural conference, DRIVE will feature special breakout sessions on the role of capital investment in a scaleup ecosystem, including “Public, Private, Profit: Perspectives on Capital” and “Investing in The Future: The Roles of Universities and of Corporates.”

Highline BETA will be speaking at the conference to offer insights and expertise on how corporates are building their future businesses.

Thinking about attending DRIVE? All-access conference passes are still available. The Highline BETA team will be in attendance and available to discuss everything from Female Funders to startup-corporate collaboration.

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