Raising Capital to Realize Dreams

Chief Executive Officer of the Accelerator Centre Paul Salvini discusses raising capital and securing funding.

Raising capital to grow a business and realize an entrepreneurial dream is just one of the long list of duties that make up a startup CEO’s curriculum vitae. Perfecting the pitch is only a small part of the battle. Attracting high quality investors, and landing the deal is where the big effort comes in – and it’s not an easy road by any means. In this issue of Watch, we sat down with Dr. Paul Salvini, CEO of the Accelerator Centre, to hear his perspective on the startup funding challenge, and to learn why Accelerator Centre programming and mentorship provide startup clients with that all important investment ‘seal of approval.’

Watch: It’s not easy for a startup to secure funding, especially in the early days. What does the process look like, and do Accelerator Centre clients gain any advantage?

Paul Salvini: There are typically many rounds of funding that a venture will go through from inception through to maturity. Often funding for a business idea starts out with money from family and friends, or savings. Or for those individuals who came from previous employment, perhaps a severance package, depending on the path one takes to becoming an entrepreneur.

And then after that first round of funding from family and friends, a startup will typically go through a seed round provided by folks like angel investors, and then subsequent rounds after that depending on how the business does.

One of the things we do really well here at the Accelerator Centre is provide a structured environment that, just by being accepted into the Accelerator program, provides a startup with level of credibility – a seal of approval if you will – with future investors. It is a competitive process to be accepted to the Accelerator Centre, and it is a competitive process to stay here. So that brings a lot of comfort to those who are funding companies, to have the confidence that the team here thought the idea and the founders were likely to succeed. In addition, we are providing mentoring and guidance on an ongoing basis to these companies, that overtime gives our staff some insight into these companies which is the dream scenario for any venture capitalist.

Paul SalviniWatch: A lot of incubators and accelerators are very pitch centric. How is the Accelerator Centre similar or different in its approach?

Paul Salvini: We definitely take the long-term view with our Accelerator Centre clients. And the other piece that is important is that as a company grows, the business changes, its funding needs change, and the ideas change. So it is a very different thing to consider investing in a company based on an idea expressed in the pitch, versus investing in a company that you have had the chance to watch and learn about over a long period of time. In the latter scenario the confidence goes up. It’s also important to note that companies that go through the Accelerator Centre have a far likelier chance of success, which makes them a much surer bet for an investor. They are precisely the kind of companies investors are looking to work with -- especially if that investor is looking to fund long-term business success.

Watch: What role does the Accelerator Centre’s Board of Directors play in creating our clients’ funding story?

Paul Salvini: In Canada with the venture climate that exists here it is very difficult to find funding for a company that is a one hit wonder. Most VCs today want referrals from trusted sources, and they want those trusted sources to have some level of insight into the company -- even better -- some kind of oversight for the duration of the investment. The Accelerator Centre is so blessed to have the quality of the board it does, reflecting every aspect of success within the community. What a resource we have that helps to develop and guide the program offered here. The network is one more part of what a young company gains from being a part of the program.

Watch: It is now common for incubators and accelerators to also provide seed funding to startups entering their programs. The Accelerator Centre traditionally has not gone down this path. Is that a possible future direction?

Paul Salvini: It is definitely an opportunity for the Accelerator Centre. A lot of businesses have spoken of the need for a ‘made in Canada fund’ and an ‘in-region fund’. A dedicated investment fund for this area would allow us to set the investment objectives to be different than traditional VC’s investment objectives might be. Let me give you an example. If you are investing for strictly monetary reasons, you might be happy that three individuals receive an offer to sell for $2 or $3 million dollars for a few months of work. But if your investment objective involves growing leaders to grow great companies, and you believe the company has merit and that company could grow to be the next great business within our own region, you can set investment objectives that speak to the desire to strengthen our community and build the diversity of companies that create stability for the region in the years to come. So there is great merit in us considering putting together a fund, and working together with the community to think about doing that. You always want to invest in our own product. What a wonderful statement that would be if we could build a fund that allows us to invest in the product of our region and its people.

Watch: Where do you see the greatest potential for growth in our startup community?

Paul Salvini:One of the largest untapped markets is that of our more experienced workforce. And we are now looking at how we can create greater mobility in the experienced labour pool we have here in Waterloo Region.

There are many people who are currently in jobs that they are no longer finding as satisfying as they once were. They are looking enviously at all the exciting entrepreneurial activity happening in the region and they are wondering how they might be able to participate, especially when they have a family that relies upon a steady income, and a mortgage to pay.

So we are asking ourselves, how can we help them make the leap to becoming an entrepreneur? I believe one of the greatest things we can do as a region and as a country is to grow our productivity and our prosperity by encouraging greater mobility within the experience labour market. We do this by providing the support around the mobility and transfer of opportunities into new ventures. We accomplish this by working with established companies to seed these opportunities, and with the government and potentially -- a new fund, to create a new generation of businesses within the region led by our experienced workforce who have the ideas, the maturity and experience, and the connections to do as many great things as our students and our new graduates.

Meet Paul Salvini

Paul Salvini officially joined the Accelerator Centre as CEO in August, 2014. Dr. Salvini is a seasoned executive with proven experience in growing highly profitable, world-class technology companies. Prior to taken on the leadership role at the Accelerator Centre, Paul was Chief Technology Officer of Christie Digital Systems Canada Inc., guiding the company’s global research and innovation strategy.

Prior to Christie, he was CTO at Toronto-based Side Effects Software, where he led an award-winning team of mathematicians and software developers in the creation of 3D animation and visual effects software for Hollywood feature films. He is an active leader within the local and digital media communities serving on numerous boards including as Chair of GRAND (Canada’s Digital Media Network of Centres of Excellence) and President of the University of Waterloo Alumni Council.

In 2007, Dr. Salvini was named one of Canada’s Top 40 Under 40™, a national award that honors individuals for outstanding achievements in innovation, leadership, vision, and community involvement.

He holds a BMath degree in Computer Science from the University of Waterloo, MASc and PhD degrees in Engineering from the University of Toronto, and an MBA from the Rotman School of Management at the University of Toronto. He lives in Kitchener with his wife and two children.