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LaBarge Weinstein Fall 2009 Quarterly

Posted by Shane McLean on December 22, 2009

See below for LaBarge Weinstein’s quarterly newsletter published this week:

LaBarge Weinstein Fall 2009 Quarterly

Just in time for the holidays, as our long, gentle fall turns the December corner, even the grimmest winter-curmudgeons among us can’t but feel the public/private financing markets heating up their engines in the driveway for what we all think will truly be a breakout 2010.

Our evidence of the recession’s Chinook from the firm’s recent dealflow?  On the private side, Bridgescale’s permafrost-breaking investment in Bluecat Networks, Celtic House’s investment in Peraso Technologies, and Summerhill Ventures’ follow-on investment in Toronto’s Vantrix Technologies. On the public side, a quarter reminiscent of our pre-bubble roots, with each of IMRIS and Chemaphor completing fundraising transactions, and with Dynex Power launching a rights offering during the same period.

Coupled with energetic M&A interest fuelled both by the usual corporate development suspects as well as a new, brash breed of billion-dollar balance sheeters and pre-IPO roller-uppers, we expect a continued ruddy market glow despite the cold…so let it snow, let it snow, let it snow, and please feel free to contact anyone on the LaBarge team if you need some help shovelling that driveway.

Go Public My Son, Go Public…

Most definitely the last quarter’s biggest buzz has revolved around the pending mini-bubble for North American technology companies seeking to go public early in 2010.The Globe and Mail’s Andrew Willis commented on the TSX’s IPO rush this past November, and KPMG recently reported its Canadian and US annual public market pulse surveys confirming over 60% of industry participants expect IPO activity to substantially increase in the near term. South of the border, courtesy of the Valley’s Philip Smith, a summary of IDC’s predictions for 2010 that includes an industry-consensus view of the markets coming back to the tech neighbourhood in the coming year.

What does it mean to you and your board/management team? If your startup is just out of the blocks, you root for an increased liquidity environment to grease the wheels of the private equity funding cycle. If your company is just hitting its stride, you’re very possibly going to be rewarded for your resilience over the past few years, and you should do you best to get networked among the blue suited Bay Street crowd that is again hitting the airwaves and highways to check out the very best companies across the country. Our team can help, and you should feel free to contact any of our partners if you’d like our perspectives or some helpful introductions.

You’ve Changed, Man…

Our partner Shane McLean recently informed us of a troubling British Columbia court decision which awarded a consultant damages for lack of “reasonable notice” of termination much like an employee. In this case, notwithstanding the parties’ explicit treatment of the individual as a contractor, he was entitled to common law reasonable notice (for our clients, the bigger, badder amount depending on the team member’s length of service). For a more complete description of the case and how your startup can avoid the same result, please check out the enclosed link and please feel free to contact Shane at smclean@lwlaw.com if he can assist further.

Best in (Trade) Show…

With the fall trade show season coming to a close, and marketing folks falling asleep with dreams of sugarplum spring show fairies dancing in their heads, we unearthed a great blog post earlier this fall from Jason Calacanis giving startups advice on how to get most from a trade show experience. We asked a few Waterloo-based software business development and sales gurus for their thoughts on the article’s suggestions, and click this link to check out their responses.

Blogs & Other

Congratulations to a couple of LaBarge lawyers for some great achievements this past quarter, with founding partner Debbie Weinstein being elected to the board of directors of Waterloo’s OpenText Corporation (as well as taking a spin with the Olympic torch this past weekend in Ottawa) and more recent addition James Smith receiving recognition as one of Lexpert’s Rising Stars celebrating Canada’s leading lawyers under 40.

The firm is very pleased to announce new offices in Toronto and Waterloo since the end of the summer. In Toronto, we’ve been pleased to bunk with Robin Axon’s and Duncan Hill’s Basecamp Partners group, and its two (and soon to be more) terrific companies housed at 488 Wellington West, Suite 300. In Waterloo, we’ve lucked into a similarly rewarding arrangement with the team at social media analytics firm PostRank, and we’ll look forward to resting our heads (and computers) at its uptown Waterloo Allen Square location as of January 1st. We have a regular group of lawyers and staff passing through the offices, and we look forward to another year of getting closer to their tremendous entrepreneurial communities.

Speaking of networking, we’d appreciate all of you assisting Carleton’s tireless booster Luc Lalande in his efforts to recreate the 2002 poster featuring startups founded by the University’s faculty, students and alumni. In addition, we wanted to pass on a fascinating article courtesy of Luc describing the mathematical foundation of the social networks that form the fabric of tech business community. The article won’t necessarily make that stale croissant any tastier at your next morning biz dev outing, but it makes for great reading nonetheless, thanks Luc.

Finally, James Smith, Mike Morgan and Shane Mclean of the firm were pleased to assist an esteemed group populate a website sponsored by Toronto’s MaRS facility with articles on common startup legal topics. The site was developed principally to support the venture creation efforts among the facility’s tenants, but its content has general application and we encourage budding founders to check it out.

Dealflow Report

Here is a sample of the publicly announced transactions that our team worked in the past few months:

Events & Calander

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Posted in Events, Financing, LaBarge Weinstein, MARS, Misc., Venture Capital | Leave a Comment »

Ottawa Cleantech Event

Posted by Shane McLean on October 21, 2009

LaBarge Weinstein, together with Deloitte and The Ottawa Network, is hosting the “Ottawa Cleantech Retooling Initiative” in Kanata on October 27th, 2009.   Should be a good event.  Here are the details:

“Bringing local clusters and initiatives together to focus the expertise of experienced management and engineering talents on emerging cleantech opportunities.”

Date:  Tuesday October 27, 2009

Time:  4:00 p.m. to 6:30 p.m.

Location:  Kanata Lakes Golf & Country Club, 7000 Campeau Drive, Kanata, ON

Panelists:  Bill St. Arnaud from CANARIE, Tim Angus from ReGen Energy and Albert Behr from Behr & Associates

There is no cost to participate, however pre-registration is appreciated.  RSVP with Diana Lavigne at dl@lwlaw.com or 613 699 6900 ext 210.


Posted in Cleantech, Events, LaBarge Weinstein, Misc. | Leave a Comment »

Win $5,000 for your Startup

Posted by Shane McLean on October 5, 2009

The Ottawa Network is running a Startup Boot Camp later in October.   $5,000 is up for grabs for the best developed idea at the end of the process.   Check out the details here and good luck!

Posted in Events, Financing, Misc., Startup, Venture Capital | Leave a Comment »

LaBarge Weinstein Summer 2009 Quarterly

Posted by Shane McLean on September 10, 2009

See below for LaBarge Weinstein’s quarterly newsletter published this week:

Summer 2009 Quarterly

With the school recess ending, and some evidence that our recession is history, our team looks back on a very busy summer of M&A and investment activity. Highlighting our M&A dealflow: Exar´s acquisition of Ottawa startup veteran Galazar Networks, and the acquisition of two Waterloo-based clients by industry leaders, EA´s acquisition of social media gaming company J2Play, and Intel´s recent acquisition of multicore development tool firm RapidMind. Of course, we love acting on the other side of the acquisition table, and we congratulate EION and its CEO, Dr. Kalai Kalaichelvan, on its footprint expanding acquisition of Calgary´s Layer 10 earlier this summer.

This trend of balance-sheet strong companies looking north for technology and strategic market development hasn´t been lost on the investment community. Our team has fielded more introductory Canadian outreach efforts from US-based funds (Boston-based Sigma Partners and Valley-based Altos Ventures among them) in the past quarter than in the previous several years. This will hopefully complement investors such as Panaroma Capital and Bridgescale Partners that have, and remain, committed to supporting our tech communities and serving as syndicate partners to the remaining homegrown active funds. Many new US-based institutions have structured their funds to include workarounds to some of our Canadian tax withholding and reporting challenges formerly cited as barriers to local investment. Others, like Bridgescale, have actually opened local offices, in its case in Toronto.

On the whole, very healthy opportunities, especially for experienced management teams emerging from acquisition activities during the previous five or so years. If you and your team are working on the next big thing, we would love to assist, and please reach out to any of our partners to make a connection and get a better sense of how we can support and build momentum behind your new venture.

Back to the VC Future…

The summer has witnessed a raft of VC nostalgia for the industry’s halcyon pre-bubble days (new VC investments in the US, for example, have dipped to pre-1997 levels). One would expect a flurry of hand-wringing laments, but this hasn’t been the case.

A recent New York Times article, for example, cites venture-icon Alan Patricof’s admonition that it is time for true venture investors to “think smaller”. Patricof, the founder of the APAX group of funds which formerly managed billions of dollars in private equity earmarked funds (some of which he invested in former Gatineau-based LaBarge client CML Emergency Services, acquired by Plant Equipment in 2007), now runs a modest $75M fund seeking to avoid the industry “force-feeding” that experts suggest have diminished industry returns. Angel-boosters such as Basil Peters have developed this perspective over the course of the decade, and his book “Early Exits” is a must-read for startup founders seeking to develop business plans that properly account for an exit landscape where the IPO is a less and less viable liquidity outcome.

So what does this mean for Canadian startups? Smaller might very well be better for us, and the industry’s “back to its roots” approach seems to align with the strategies to which our best performing local funds, including Celtic House Venture Partners and Tech Capital, have recommitted themselves over the last year.  Fund managers have refocused their efforts on cultivating long-term relationships with quality management teams, and getting involved early. And while the sales cycle remains a long one (and founders should get started as early as possible in building these relationships), our view is that this focus on more intimate partnering with opportunities can only help build bridges between funders and the amazing pockets of talent that our tech communities hold.

Cleantech Diamonds in Ottawa…

If you are a founder or investor taking a look at big picture trends in the cleantech space, our team has continually been impressed with the work of Bill St. Arnaud and his team at CANARIE on the development of clean data centres and the opportunities that they present for Canada. Canada’s leadership in changing its energy mix makes it a great candidate for satisfying what is estimated to be a $600B global market by 2013. In June, CANARIE announced a $3M call for proposals in its so-called “Green ICT” space, and in particular for major zero-carbon data center pilot projects. Bill is a terrific speaker and tireless advocate for Canada’s opportunities in the industry, and we encourage anyone interested to seek him out and get his valuable perspectives.  Looking for some locally based potential winners in the field? Two stand out: Kingston-based Axiopower and Ottawa-based Menova, each of whom have focused on small-project renewable energy as a source of future significant industry growth. If you would like to discuss our firm’s experience in the industry, and our perspectives on financing and other challenges, please feel free to contact any of our partners and we would be happy to do so.

Have Digital Content, Will Travel…

One of our partners, James Smith, was fortunate enough to attend the Stratford Institute’s inaugural conference in June focused on wedding digital media content creation and distribution innovations in a single, dynamic educational setting (James’ views on the conference). The initiative feeds a vibrant trend we’ve seen recently with Canadian-based startups focusing on web- and mobile-based distribution technologies. This includes industry heavy-hitter QuickPlay Media as well as emerging technologies and platforms being proposed by startups such as Spreed, Personal Web Systems, Metranome, DEQQ, LiveHive Systems, Overlay.tv, and Calgary’s MoboVivo. There certainly seems to be enough talent and interest to support a vibrant local digital media distribution community, and we’d be happy to share our thoughts and perspectives with you on this budding industry.

Blogs & Other

For expense-conscious startups, one of our clients Eseri, has generously made available a free trial and a 50% discount on software everyone needs, a complete IT company-in-a-box for small, medium, and growing businesses. Eseri offers a secure, virtual desktop incorporating a range of open-source tools for small businesses, and we would encourage you to take them up on their offer. And while we’re at it, we would encourage you all to check out some tools that our lawyers have been trying out lately, including Mercury Grove’s Network Hippo, Tungle’s scheduling solution, and Eighty Twenty’s desktop sharing applications.

It was disappointing to hear of Rick Segal’s departure from the Canadian VC scene this past July, and we’ll certainly miss his straight talk on the industry and its contributors. For some of his past blog highlights, click the following links, well worth the read.

The fall is venture fair season in Canada, and look for our partners and lawyers at the upcoming Ottawa Technology and Venture Showcase and the Banff Venture Forum , each being held during the week of September 28-October 2nd.

Finally, we enclose a great article passed on to us by Guelph-based startup founder and semantic web guru Greg Boutin describing how angel investors seek to de-risk investment opportunities. Finally, we remind our clients of our firm’s “Angel Connect” initiative, whereby we provide thumbnail descriptions of investment opportunities to our cross-Canada network of angels, and facilitate introductions where appropriate. If you would like to participate as an angel or you have a potential investment opportunity, please feel free to contact our partner Michael Dunleavy at md@lwlaw.com and he would be happy to assist.

Dealflow Report

Here is a sample of the publicly announced transactions that our team worked in the past few months:

Events and Calendars

Copyright © 2009 LaBarge Weinstein Professional Corporation,
A Business Law Firm. All Rights Reserved.

Posted in Cleantech, Events, Financing, LaBarge Weinstein, Law, MARS, Mergers and Acquisitions, Misc., Newsletter, OCRI, Startup, Venture Capital | Leave a Comment »

LW Spring Quarterly

Posted by Shane McLean on May 29, 2009

See below for LaBarge Weinstein’s quarterly newsletter:

Spring Quarterly 2009

“So how is business?”… a question asked of us time and again in the last few months (so much so it came to rival “So when are you due?” as  the least popular question for our tax aficionado and most recent maternity leave departee, Estelle Duez). Looking for solace? Or for the grim satisfaction of our confirmation that the economic world as we knew it is no longer? We’re afraid we’ve only optimism to offer up, and here is a taste.

First, both the Ontario and Quebec government have made significant commitments to re-seeding our lagging venture capitalists. In March, Ontario announced a $250M matching fund for later stage investments, and our partner Debbie Weinstein had an opportunity to sit in with representatives from the Ministry of Research and Innovation this past month in their Province-wide  soul-searching effort, and see the attached link to check out her thoughts on the initiative. Quebec’s plan is even more audacious, with over $1.2B committed to creating the foundation for what they hope to be Canada’s premier venture financing and tech entrepreneurship ecosystem (with, we’re told by the folks in the know like Austin Hill, a Canada-wide and global vs. Quebec-first or Quebec-only investment horizon). 

Second, while we all look forward to a boost in valuations over the coming year, our M&A activity during the quarter has been particularly strong, with Trend Micro’s acquisition of Third Brigade, High Road’s acquisition of Accentus and Wind River’s acquisition of Tilcon Software leading a healthy compliment of transactions completed by our folks in the past few months (see “Dealflow” below).

Finally, and perhaps more significantly in the long-term, we’ve recently connected with a new breed of tech deal makers, differentiated principally by more fluid, less capital-intensive, LP commitments, and a greater sleeves-rolled-up operational and strategic role. For some input on the gaps that these folks fill relative to traditional funding and incubation models, check out the perspectives offered up by Extreme Venture Partners’ Amar Varma, and Basecamp Partners’ Robin Axon. Coupled with the provincial government commitments and a renewed energy among management teams across the country, we’re all looking forward to the balance of the year.

So what does Warren think…

Some of you might have digested a recent blog post from one of our partners James Smith contrasting the buoyancy of the recent mesh show in Toronto with the gloomy mood from “A Night With the Bears”, a market hand-wringing event hosted by Eric Sprott in early April.  We had a chance to follow up with Ottawa-based broker Chris Fewster, who attended the Sprott event and followed it up by attending Berkshire Hathaway’s annual meeting in Nebraska. View Chris’ comments below on Warren’s views regarding technology markets, see the attached link, and see a recent report of his investment in a Chinese electric car and battery company, BYD.

Smartening up the grid…

Some significant pronouncements in the last few months are bringing tears to the eyes of those folks, especially in Ottawa, focused on retooling traditional telecom skillsets for the cleantech arena. In February, Google unveiled a beta version of software that works with smart metering hardware to profile home energy consumption on an applicable-by-appliance basis. Just this past week, Cisco trumped this announcement by confirming its loosely-secreted commitment to focus on making communications equipment for the electricity grid, positing in the process that the grid will be 100 to 1000 times the size and scope of the internet. What does it all mean for us? We asked Toronto-based Albert Behr of Behr & Associates for his perspective, and see the attached link for his feedback.

LaBarge Weinstein in Waterloo and Toronto…

As many of you are aware, LaBarge Weinstein has had an office in the Waterloo region since January 2007, and we’re proud to announce the opening of our Toronto office as of June 1st. Check our website for details, and look for our professionals circulating more frequently in each of those tech communities looking to supplement our already strong institutional connections with improved reach and relationships with southern Ontario’s leading tech entrepreneurs. For more information on our efforts, feel free to contact James Smith of our office ( js@lwlaw.com ) and he would be happy to assist.

Blogs & Other

We’d like to congratulate a couple of new presidents of tech organizations in the Ottawa area, first Claude Haw appointed to run OCRI, and second Rick O’Connor tagged to run The Ottawa Network. We look forward to working with them both, and to each organization’s continued commitment to tech entrepreneurship in the Ottawa area.

Each of Claude and Rick might want to check a great article in a recent edition of the Economist describing the “Five Myths of Entrepreneurship”, a must read for anyone looking to focus on ways to improve the results of our tech ecosystems. Thanks to Ottawa-based CFO Mike Van de Water for passing this on.

One of our partners, Shane McLean, has recently launched his blog at www.ShaneMcLean.com. Shane is hoping that the content will appeal to our clients and to the business community at large. Please check it out and let Shane know what you think ( smclean@lwlaw.com ). Thoughts, comments and suggestions for topics are all encouraged and always welcome.

We wanted to highlight a great Globe & Mail interview with Waterloo-based Tech Capital’s managing partner, Tim Jackson, which is further soup for the tech soul looking for healing in these tough times. If you are actually pitching your business to external investors these days, check out a terrific video of David Rose’s “hearts, heads, wallets” approach, very valuable input passed on to us from our friends at Montreal Start Up.

Dealflow Report

Here is a sample of the publicly announced transactions that our team worked in the past few months:

Events and Calendars

Posted in Events, LaBarge Weinstein, Misc., Newsletter | Leave a Comment »

TeamCamp Presentation

Posted by Shane McLean on May 8, 2009

Last night I gave a presentation called “How Do I Structure My Business” at a TeamCamp event.   Here is a copy of my  presentation.  I am happy to discuss if anyone has any questions. Please feel free to give me a call (613 599 9600 ext 262) or shoot me an e-mail (smclean@lwlaw.com).

Posted in Business Structure, Events, Law, Startup | Leave a Comment »

Government Funding Presentation Materials

Posted by Shane McLean on May 7, 2009

I mentioned in a recent post that I would be attending an OCRI event entitled: A Treasure Map to the Myriad of Federal and Ontario Government Funding and Financing Programs on Tuesday May 5.  It was a pretty good event with a lot of good information packed into an hour long presentation.   I thought I would provide a link to the presentation materials.  They have a lot of great detail in them and are good as a primer if you are just getting started looking at government funding.

Posted in Events, Financing, Government Funding, OCRI, Startup | Leave a Comment »

TeamCamp on May 7

Posted by Shane McLean on May 5, 2009

I just wanted to let everyone know that I will be speaking at the TeamCamp event being held at The Code Factory  on May 7.  I will be talking about how to structure your startup business.  See more details at Chris Schmitt’s  TeamCamp Blog.

Hope to see you there.

Posted in Business Structure, Events, Startup | Leave a Comment »

More on Government Money

Posted by Shane McLean on April 28, 2009

Further to yesterday’s post about tapping into the world of government funding, it has been brought to my attention that  OCRI, The Ottawa Network and several of the local clusters are hosting an event on April 29 entitled: The Real Secrets Behind Getting Government Financing For Your Tech Company.  Looks like a good lineup.  See details here.

Posted in Events, Financing, Government Funding, OCRI, Startup | Leave a Comment »

It’s your money, why not grab it?

Posted by Shane McLean on April 27, 2009

Ok so it’s not all your money, but April tends to make us think about just how much of our money the government actually takes.  So, since the government has a lot of your money why not tap the government as a source of funding for your startup?  This is a favourite topic of mine and I’m starting to see more and more written about the different sources of government funding.  

The Ontario Government for example has been busy announcing the establishment of venture-like funds (for example the $205M Ontario Venture Capital Fund and the $250M Emerging Technologies Fund).  Both funds have the Ontario Government funding or working with established venture capitalist firms to put the money to work (I am encouraged to see that the government seems to understand that it is not equipped to make the investment decisions and is leaving that in the hands of professionals).  The OVCF has been slow to start rolling out money (my friends at Wellington Financial have been busily blogging about the slow roll out for the last couple months.  See here, here,  here,  here, here and here.  I told you they have been busy.).  I hope it’s a case of better late than never.   The Emerging Technologies Fund won’t start investing until at least this summer.  

At a Federal level, I understand that IRAP has (or maybe by now “had” is more accurate) a new pot of money and everyone is excited about IRAP funding again.   The Atlantic Canada Opportunities Agency is another Federal agency that has been active in Atlantic Canada.

In an earlier post I talked about the fact that the Ontario Government will actually send someone to meet with you to discuss your company, your goals and your needs and then work with you to try and figure out what grants, loans or other programs offered by the Ontario Government might fit.  OCRI has an event scheduled for May 5 in Ottawa called “A Treasure Map to the Myriad of Federal and Ontario Government Funding and Financing Programs” (see here for details).  The agenda and speakers look good so it will hopefully be an informative event.  I plan to attend and hope to see you there.

Government money can be tedious to get your hands on, but filling out forms and dealing with Government bureaucrats can’t be any more tedious than making pitch after pitch to a gazillion venture capitalists. If you need to, you can go after the government funding prior to or in parallel with your VC pitch.  Another plus is that government money is often non-dilutive to shareholders and both founders and VCs love it when they can leverage growth off of  non-dilutive money.

Posted in Events, Financing, Government Funding, OCRI, Startup, Venture Capital | 1 Comment »