TIE INSTITUTE www.jimdewilde.netwww.twitter.com/jimdewilde
HOW TO BUILD DURABLE COMPANIES IN AGLOBAL ECONOMIC REALIGNMENT• Lean Startup ERIC RIES (buzzwords CONTINUOUS INNOVATION ZERO WASTE)• Entrepreneurship is a team sport• Strategic ventures: pick a space (commercialization of smart materials)• Strategic ventures: build a management team• Strategic ventures: do the financial engineering
FINANCIAL ENGINEERING IS ABOUT MORE THANRAISING MONEY• For a plane to take off, it needs:• GOOD DESIGN• A FULL FUEL TANK• A SKILLED PILOT• AND A RUNWAY
FINANCIAL ENGINEERING – WHAT VCS DO• Governance• Innovation ecosystems• Corporate ventures (exits are likely acquisitions. What does MONSANTO want? What will CISCO buy?)• You can always give away equity to build a team.
INC MAGAZINE -11 IDEAS TO WATCH IN 2011 +BEST ENTREPRENEURSHIP TEACHING• http://www.inc.com/ss/11-big-ideas-watch-2011#0• http://www.cnbc.com/id/44581554/Startup_Lessons_From_a_Pro_Eric_Ries_on_The_Lea n_Startup• http://www.inc.com/magazine/20110401/the-10-best-entrepreneurship-courses-of- 2011.html
COMMERCIALIZATION OF KNOWLEDGE• AGRIFOODS AND NUTRITION BETTER THAN DIGITIAL MEDIA• COMMERCIALIZING NEW MATERIALS• FIND SCIENCE THAT NEEDS COMMERCIALIZING• BUILD THE TEAM (marketing, finance, inventive source, strategist)• KNOW THE COMPETITIVE ENVIRONMENT
WHAT IS MOST LIKELY TO GO WRONG –WARNING SIGNS• “we have no competition” EITHER IT IS A DUMB IDEA or YOU LIVE IN A BUBBLE.• “no one will give us the valuation we want” YOU ARE FOCUSED ON THE SHORT TERM. If it is a $100 million company, it doesn’t matter if the valuation is $5 or $7 million for the first round.
CHALLENGES TO VC IN TORONTO?• A confusion of incubation / graduate school and commercialization• An absence of science parks / incubators• An absenece of collaboration• A mine in Mali gives more return on investment than technology• There is not enough CIRQUE DU SOLEILs or QUADRALOGICS or BALLARDs to show us that it works. Ontario has OPENTEXT and RIM.• Corporate venturing provides exits and strategic guidance (MDS VENTURES becomes LUMIRA)
THIS IS THE ENTREPRENEURIAL MOMENT• Financial engineering• Venture capitalists add value more than capital (strategic guidance and networks)• Conventional categories are shifting: think SMART MATERIALS and AGRIFOOD.• Understand what else is out there. There are 1000 mini-GROUPONs. Innovation is global. Competitors and collaborators are in Casablanca and Cartagena.
FINANCIAL ENGINEERING IN A SLOW GROWTHECONOMY• Ontario needs specialized funds: CREATIVE INDUSTRIES FUND FOR TORONTO, SMART MATERIALS FUND FOR SOUTHWEST ONTARIO, DIGITAL HEALTH FUND, AGRIFOODS FUND, GREEN MINING FUND, MOBILE BANKING FUND.• Corporate venture ensures commercialization. A SMART MATERIALS fund needs an anchor.• Financial engineering seeds sophisticated investors to grow a company to scale. Ontario has global reach through its citizens and access to global capital markets through its financial institutions. We need to organize both to finance a start-up economy.
UNIQUE COMPETITIVE ADVANTAGES FORONTARIO• Global teams• Teams that think globally.• Waterloo cluster• University research base for next generation value creation (agriculture, materials, nanotechnology)
HOW TO BUILD A $1 BILLION COMPANY INONTARIO• Consolidate the intellectual property in one area (digital health)• Find a management team which understands global competition.• Ensure the financial engineering provides a runway.• Leverage the global reach of Ontario.