Go­ing in ‘re­verse’

Re­flec­tions on rais­ing fi­nanc­ing

Ottawa Business Journal - Techopia - - Hindsight -

LeoNovus, which de­vel­ops tech­nol­ogy that de­liv­ers In­ter­net con­tent to tele­vi­sions, was born out of a re­verse takeover in Novem­ber 2010.

Then known as Per­sonal Web Sys­tems, the firm was ac­quired by Work Horse Cap­i­tal for $5.8 mil­lion, with the merged en­tity also rais­ing a pri­vate place­ment of $3.1 mil­lion.

Chief ex­ec­u­tive Gor­don Camp­bell was there through the dis­cus­sions of the deal and shared his im­pres­sions with Ot­tawa

Tech­nol­ogy’s El­iz­a­beth How­ell.

ON HOW IT ALL BE­GAN:

“It wasn’t re­ally a clas­sic pitch in­so­much as it was more of an in­tro­duc­tion. Dan Wil­lis is our chief ar­chi­tect. He’s Cana­dian. Dan had started a com­pany called Ad­scape Me­dia in Ot­tawa and be­cause it was do­ing real-time ad­ver­tis­ing in­side games, he felt he needed a pres­ence in Sil­i­con Val­ley. His com­pany was later ac­quired by Google. Af­ter the ac­qui­si­tion, he joined us.

Dan went up to Canada to start to put a group to­gether in Ot­tawa, and was in­tro­duced to ( Work Horse CEO) Mike In­skip by a mu­tual ac­quain­tance. ( Mr. In­skip) was look­ing to do some fi­nanc­ing of tech­nol­ogy star­tups, so the in­tro­duc­tion led to more dis­cus­sions. Mike came down and vis­ited us here, and when he vis­ited, I guess he liked what he saw.”

ON THE PITCH:

“ You need to be able to ex­plain it in a few min­utes, or an hour, or any­where in be­tween. If you boil it down to our vi­sion, it is that all of our dis­plays will con­nect to the In­ter­net and will ben­e­fit from that ca­pa­bil­ity and func­tion­al­ity. That’s on the very sim­ple side of the ex­pla­na­tion.

Then, of course, you can go to the other side of it where you’re talk­ing a lit­tle bit more in-depth about the ca­pa­bil­i­ties and the dif­fer­ent things: how smart agents can go out and search for the con­tent on the In­ter­net, and things like that.

If you only have a few min­utes, you need to dis­til it into the most im­por­tant el­e­ments to try to get the mes­sage across. If you have more time, you can flesh out the story more.”

ON THE NEXT STEPS:

“I think from start to fin­ish, it was some­thing like six months. It’s not an overnight process.

You have to have your fi­nan­cials. If you haven’t been au­dit­ing them – which we did – you have to go out and find an au­di­tor. You have to have a busi­ness plan in place. You have to go through the le­gal due dili­gence where you have to make sure that you’re a cor­po­ra­tion in good stand­ing.

We went into the process rea­son­ably well-or­ga­nized; we’ve been through the IPO process sev­eral times be­fore, whereas some star­tups, they may be new at this.”

SUG­GES­TIONS FOR STAR­TUPS:

“If you have a com­pelling prod­uct and com­pelling vi­sion and re­ally good peo­ple, I think it’s much eas­ier to fin­ish a fi­nanc­ing round than it is if you’re miss­ing any of those el­e­ments. In some cases, you may have a com­pelling vi­sion, but it may be too far out on the cut­ting edge to get in­vestors.”

Gor­don Camp­bell

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