Boris Mann figures there's a rather mundane reason why entrepreneurs stick around Vancouver to launch high-growth startups in this relatively small corner of the world.
“One of the indicators of talent is they're smart people who like living in nice places,” said the founder of Full Stack, an angel investment firm that guides and funds startups in their infancy.
But lack of access to capital up north can push entrepreneurs to the Silicon Valley, where B.C. talent often agrees to set up shop so investors can keep an eye on them.
“They're not going to stop saying yes to that unless we start actually writing first cheques here,” Mann said.
But cultivating a better support system in Vancouver to retain its bright minds is going to take more access to information, he said.
“I can't tell you how many startups started last year and how many startups started this year,” Mann said.
“I can't tell you how many got funding at each level. I can't tell you how many open jobs there are in startup land.”
As the executive sponsor of the startup database WeAreYVR.ca, set to launch this summer, Mann and his team from Launch Academy are looking to change that by compiling open data on local startups, their founders, when they were founded, the size of the companies and how fast their growth is.
The main reason for WeAreYVR is that “we don't have metrics for this high-growth startup industry,” said Claire Atkin, the project's curator.
She said WeAreYVR can serve as a free, collaborative “information hub” for events, jobs and startup-friendly service providers.
The project has raised about half of the $100,000 it needs to operate for a year.
Atkin said that's a drop in the bucket considering the economic benefits.
“The startups will find it helpful to be in a place where investors and talent can find them,” she added.
In fact, connecting with investors is the biggest challenge for CEOs of emerging companies in Canada, according to a May 12 report from PricewaterhouseCoopers (PwC).
Of the 150 CEOs polled, 35% said raising capital was the most difficult issue they faced as a startup – topping revenue generation (28%), operations (14%) and finding talent (10%).
Furthermore, 66% of CEOs said they plan to exit the market through a merger instead of developing their startup into an anchor company.
But Eugene Bomba, Canadian leader of PwC's emerging company services practice, said many of the founders that make an early exit may come back to create another startup – this time with more capital in their pocket and a willingness to stick it out longer.
“If they enter the fold again, that could also be a pretty exciting time for Canada.”
Bill Tam, president of the BC Technology Industry Association (BCTIA), said he's often seen Vancouver-based startups look for acquisition opportunities when they run into problems raising capital and feel the need to pay back early investors.
The BCTIA has been offering programs to many of the province's tech-sector startups to ease those pressures by helping them grow.
“As companies can get faster, accelerated growth in their businesses, then they can attract larger amounts of capital [and] ultimately finance themselves through more customer contracts and revenue,” he said.
Furthermore, Mann said tech startups have a lot of potential to develop from “tiny kernels” into anchor companies here in Vancouver because the Internet offers access to an unlimited potential client base.
“It seems logical to me that if we have sustainable businesses that have a broad customer base, then we'll have more money to spend on employees,” he said.
“My gut says there's more value in 50 Mobifys than a 300-person pulp and paper mill in Prince George.”
