LOCAL INCUBATORS FOCUS ON SELF-FUNDING
The Ottawa startup community is pulling itself up by its bootstraps.
Many of the city’s business incubators – typically office space where early stage startups can build businesses while surrounded by fellow entrepreneurs and experienced mentors who can provide advice and facilitate introductions to investors and clients – are growing in size and encouraging entrepreneurs to launch their businesses without outside funding.
“We want startups to self-capitalize,” says Bruce Firestone, executive director of Exploriem, an incubator for early stage firms. Mr. Firestone says he wants startups to develop a viable product and find customers before they start looking for funding from angel investors or venture capitalists.
It’s a message he’s drilled into the heads of entrepreneurs for more than 10 years and something he’s tried to build into the local startup culture through Exploriem’s annual Bootstrap Awards. Nominations are open to companies operating for fewer than seven years that have received less than $650,000 in outside funding.
Mr. Firestone isn’t alone. Bootstrapping is also a focus at The Code Factory, a downtown business incubator and co-working space.
“That’s definitely what we focus on,” says The Code Factory founder Ian Graham. “Our philosophy is build your business before you go looking for money.”
Blair Beckwith is the app store manager at local software firm Shopify and an organizer of Startup Weekend Ottawa, the local chapter of an international organization that puts on 54-hour competitions where teams develop new startup ideas. He says he sees two factors driving the self-funding push in Ottawa.
“We don’t have a lot of big investors; there are not many venture capitalists in Ottawa,” he says. Furthermore, he adds, the city currently lacks a critical mass of startups that are of the size or at the stage that typically attracts venture capitalists.
Scott Annan, who has founded several Ottawa-based startups and has been a mentor and investor in others, tells a similar story.
“There isn’t a larger fund in the city,” he says. “You have to leave or look externally.”
But he says he’s seeing other changes.