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The Cascadia Venture Forum (CVF) kicks off its 2nd Annual Health Innovation Investor Forum at the VANTEC Life Sciences Angel Network (LSAN) Meeting in Vancouver on June 6th

Pre-Screened Seed and Series A companies in the Medical Device, Pharma/Biotech, Digital Health, and Health IT sectors will give a 90 Second preview or Full Presentation Pitch. Companies who are upvoted by the LSAN investors will be invited to participate in the Cascadia Venture Forum to be held Fall 2017.

When:  June 6, 7.30 am - 10.00 am

Where: Room 7000 SFU Harbour Centre 515 West Hastings.

Tickets: Free for members and their guests, $50 for non-members

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To give some background on how The Cascadia Venture came about, we talked with CVF's founder George Aliphtiras and Thealzel Lee.

The Cascadia Venture Forum is an investment forum for early stage (Seed and Series A) Life/Health Sciences companies from the Pacific Northwest region (BC, Oregon, and Washington). This 2nd Annual Forum is organized by the Pacific Northwest life sciences community, angel investor groups, venture capitalists, and private equity investors to showcase the most promising early stage companies and increase their opportunity to raise funding from investors.

Business is about relationships. About building trust. Which is why in today’s fast-moving world of near-instant digital communications, in-person, face-to-face interactions are becoming rare – and yet they are more important than ever.

“No problem,” says George Aliphtiras, an entrepreneur and angel investor and the mastermind behind the Cascadia Venture Forum (CVF). “To build great companies you need great people… and great capital. I saw an opportunity to facilitate a series of networking events that would allow our world-class start-ups to build meaningful relationships with our most successful and experienced investors within the Pacific Northwest and beyond.”

Thealzel Lee, entrepreneur, angel investor, founder of E-Fund (an angel investment fund), and proud organizer and supporter of last year’s CVF also felt that life sciences needed its own platform – its own showcase. When she heard what Mr. Aliphtiras was proposing, she jumped on board:

“I said ‘Let’s do something focussed on life sciences and let’s leverage our geographic proximity: the Cascadia Innovation Corridor has some of the best innovators and investors and collaborating within the region facilitates valuable and necessary person-to-person meetings. As an investor, you can be on the front lines with the emergent companies. Let’s capitalize on all that life sciences has going for it, and build an even stronger community’.”

And so CVF was born: a forum designed to bring carefully curated health innovation start-ups together with potential investors. As Elayne Wandler, Director of Partnerships and Programs for Accel-Rx, explains:

“As Canada’s national health sciences accelerator, we are all too aware of the limited capital in Canada necessary to commercialize our discoveries. Building clusters in regions like Cascadia are important initiatives that help bring investors, companies, and support organizations together in one room to get to know each other, build trust, exchange knowledge, and ultimately do business together.”

In its inaugural year during fall of 2016, Cascadia had a strong reception and boasted several success stories between innovator and investor; however, it was the unexpected successes that came from the event that intrigued Mr. Aliphtiras:

“One of the success stories that came out of last year’s forum was the networking that occurred amongst the investors themselves. You know what you know in your own backyard but you don’t know what’s in the other person’s backyard. Or how to leverage upon different skill sets across the region. CVF helped facilitate a type of network effect. This momentum builds a collaborative synergy amongst the players themselves.”

While last year’s achievements have set a high bar, CVF continues to build upon that foundation for what it believes to be an even more impactful 2nd Annual Forum. As Ms. Lee puts it:

“Investors will get to see the hottest companies in the Cascadia region. So maybe you are an investor from Boise, Idaho and you don’t get exposure to let’s say, Portland, Oregon. Now at the forum you’ll get to see companies not only from Portland, but also Seattle, Washington and Vancouver, British Columbia. The forum optimizes time and distance in an efficient manner that allows for connections to happen in a person-to-person way.”

Those behind CVF know that relationships formed between investors and entrepreneurs are unique. Thus, increasing the likelihood of a successful first introduction that may blossom into a longer-term relationship and potential investment is a key objective of the forum.

To help achieve this, participating start-ups are put through rigorous pre-screening, ensuring investors are seeing high-quality companies who are also provided with constructive feedback throughout the process.  This makes the forum efficient for the investor and valuable for the start-up.

“To make the cut and de-risk the opportunity for investors, start-ups must demonstrate to CVF that they are investable: they need a compelling business model and product that makes sense with strong customer traction. Last but not least, the team must also demonstrate that they have a solid foundation,” says Mr. Aliphtiras in support of helping start-ups put their best foot forward.

For investors and health innovation start-ups, the Cascadia Venture Forum offers a clear value proposition. But its also a compelling opportunity for sponsors of the event.

“As a sponsor, you gain exposure to the whole Cascadia region,” says Ms. Lee. “So maybe your business is only in Portland. At the forum in Vancouver, your exposure suddenly becomes international – but still regional and relevant. Sponsorship also provides the venue to highlight your leading role in building our life sciences community.”

Ms. Wandler concurs: “Accel-Rx is thrilled to support CVF and its vision to enable the Cascadia Innovation Corridor to become a world-leading cluster of health innovation entrepreneurship. And we are proud to be one of its foundational sponsors helping to build that vision.”

“Building” is the key take away from CVF. “What continues to drive us to do this,” says Mr. Aliphtiras, “is seeing the real impact within the community and the next generation of companies that are built and that succeed due to this initiative. The cluster’s continued success and the high-quality deal flow that we have here in the Pacific Northwest is something we are very proud of.”

If you would like to participate in the Cascadia Venture Forum as a start-up to pitch and connect with investors in BC, Oregon and Washington, as a sponsor to join and support the community, or as an investor or other health innovation ecosystem member to see inspiring and investable entrepreneurs with an opportunity to network with like-minded investors, entrepreneurs, and other community members across Cascadia, please visit the website to learn more: www.cascadiaventureform.com.

We invite you to join us for the first round of pre-screened pitches on June 6th, 2017

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If you are a start-up and would like to be considered for the pitch session on June 6 or the Cascadia Venture Forum in Vancouver you can apply to pitch now 

On Thursday, March 16^th, a group of angel investors and advisors gathered at the Vancouver Convention Center to take part in a mentoring session and pitch competition for a select group of under-20 entrepreneurs.

The NACO Mentoring Bootcamp, which took place following this year’s BCTech Summit, was initiated and sponsored by China-based United Capital Investments, and co-sponsored by NACO and VANTEC Angel Network. The event was an effort to introduce Vancouver’s angel investor community to some of B.C.’s most promising young entrepreneurs, many of whom are foreign students.

“Here in B.C. we are actively building relationships with and welcoming foreign entrepreneurs,” said Yuri Navarro, CEO of NACO.

“Through Canada’s Startup Visa Program, investors are seeking out foreign entrepreneurs - in some cases foreign students that are studying here and already have businesses. The visa program gives these investors the tools to accelerate the process of getting them a permanent residency once they’ve received investment.”

Foreign talent: enriching Canada’s startup ecosystem

The Startup Visa Program has been helping foreign entrepreneurs establish themselves in Canada since 2013. The program is intended to give immigrants a healthy startup ecosystem in which to grow their companies, allowing them to gain permanent residency in Canada while also benefitting Canada’s economy by increasing job growth and encouraging an influx of risk capital.

However foreign investors, particularly those based in the U.S., have in the past been known to invest in Canadian companies only to later remove those companies and their founders from Canada. This has often diminished the anticipated benefits of attracting foreign investment or exiting a business, but Navarro says that this trend is now reversing.

“What we’ve been seeing more recently – even before Trump – is a trend of American entrepreneurs coming to Canada to establish themselves. We’ve also been seeing Canadian expats that had been establishing themselves in the US coming back to Canada to build businesses here.”

“Now with the Trump situation, we’re seeing entrepreneurs in the U.S. actively looking to set up offices in Canada in order to have a place to send the foreign talent they can’t bring to the U.S. anymore.”

Building Canadian companies through foreign capital partnerships

Ultimately, says Navarro, events such as the NACO Mentoring Bootcamp will not only strengthen relationships between Canadian investors and foreign entrepreneurs, but also encourage foreign investment into Canadian companies.

“United Capital Investments, the sponsor of the event, is an investor group from China that is actively establishing a brand in Canada and investing in Canadian companies.”

 “The opportunity today was to do an exchange - bring some of our investors, connect them with selected entrepreneurs, and have them showcase what they can offer as a community to our community, and vice versa.”

The winner of the competition, 15-year-old entrepreneur David Sui, was congratulated by investors and mentors for his creation, MyLyfe, an AI calendar that can decipher user-based preferences and generate a personalized schedule that maximizes work efficiency and leisure time.

To find out more about the NACO Mentoring Bootcamp and the competing entrepreneurs, please visit www.nacocanada.com.

On March 1st, 2017 a group of investors, founders, lawyers and active members of Vancouver’s startup community gathered to discuss the need for widely accessible, Canada-specific term sheets that will better align founders and funders in meeting their goals.

The speaker session and panel discussion, hosted by VANTEC Angel Network and E-Fund and entitled ‘The Quest for Better Term Sheets to Get Deals Done Faster’, highlighted the pain points of both founders and investors when navigating term sheets. Panelists and speakers agreed that existing American-centric term sheet templates such as SAFE Docs are often not suitable for the Canadian market.

Debt versus equity: which is right for you?

Startups have traditionally funded their operations through the sale of equity, typically issued via common shares or preferred shares.
“Common shares are the simplest form of a direct equity investment. Because you’re getting in at the same share class as the entrepreneur, it aligns the investor and entrepreneur. The downside is that it lacks proper investor protection, and it locks in a valuation too early,” Pieter Dorsman, Director and CEO of E-fund explained to the audience.

“Preferred shares is the dream for investors. It protects investor rights, it locks in certain returns, but in my opinion it does not always create a perfect alignment with entrepreneurs,” he added.

Early-stage considerations

The problem with selling equity at an early stage is that it’s difficult for founders and investors to agree on the value of a company when it still has very few indicators of true value (customers, sales, and revenue). This creates friction between founders and investors and often causes the deal to fall through.

This is why convertible debt was introduced. In layman’s terms, money is invested today, and the valuation happens later.

“Convertible notes are a great instrument that defers the valuation discussion – it’s a relatively simple document, and from the company’s perspective it’s advantageous because you are dealing with lenders, not shareholders… there’s a bit more distance as long as the company is doing well. It usually works better for companies, but for the investor it’s not always a good deal.”

Convertible debt: founder drawbacks

While convertible debt solves the issue of having to value a company at the time of initial investment, it is still debt that has to be repaid at a later date – with interest, which is not ideal for founders.

Furthermore because a convertible note is debt, companies are legally obligated to repay it later. This is an additional pressure for an early-stage startup, because principal and interest repayments will have to be made later despite profits or economic circumstances at that time.

This has led to the creation of convertible instruments that aren’t debt but have many similarities, such as SAFE Docs.

What are SAFE (Simple Agreement for Future Equity) Docs?

Introduced by Y-Combinator in 2009, a SAFE is a contract in which an investor gives money to a company in exchange for equity at a later date. SAFEs are not debt, because there is no interest and no maturity date, and the company is under no legal obligation to repay the investors. SAFE Docs are available online and free for anyone to use. There are several versions, and they are meant to decrease the legal fees and reduce negotiation times.

“There’s a lot of sex appeal around SAFEs right now,” said Mike Stephens, a Partner at Fasken Martineau who has guided many Canadian startups through the exit process. “Whether or not everyone fully understands the nature of the legal impact of the SAFE and what it does and how it converts is a totally different story.”

Dorsman said that American-centric SAFE Docs may also be out of place in certain markets, such as Canada. “SAFEs work best in a frothy market. They were released by Y Combinator in the Valley, at a time when there was such a volume of startups and such a demand for investment that it was very easy for companies to get away with the SAFE. It is very regionally dependent. It’s very driven by circumstances, and for investors I think it’s too much of an open-ended deal. As an investor, if a company comes to you with a SAFE I would encourage you to look at it very critically before you jump in,” he warned.

Keith Ippel, CEO of Spring, pointed out that despite the common perception that SAFEs are founder-friendly, they may actually do entrepreneurs more harm than good if they are not understood properly: “Some investors will slam the door in their face if they mention SAFEs, others will say it’s the only thing they do – so the entrepreneurial community has not been able to get a clear handle on what makes a good SAFE. Creating some common language, I think would go a long way.”

Creating founder-funder alignment in Canada

“We have a number of problems in Canada,” said Dorsman. “Most of the term sheets are founder-driven. Many are done via Google search, and finding examples that are far too American to use here.”

Speaking of the tendency for founders to pull terms sheets from the Internet, Stephens warned that practices such as these could be detrimental to Canada’s startup ecosystem. “Those practices have to stop,” he said. “It means investments don’t close, and quite frankly it can really hurt the growth of local companies and companies across Canada.”

“The goal is to build a Canadian standard,” said Dorsman. “I’m very pleased that together with Boris Mann and NACO we have started a project called NACO CommonDocs. Our goal is to launch in April a set of standard common, preferred, convertible, and Canadian SAFE term sheets that will be on the NACO portal together with a set of educational documents, that would be for everyone to use: investors as well as companies.”

“We are trying to incorporate both the investor’s and the entrepreneur’s point of view… so if you’re a newbie investor or entrepreneur you can go through these to get a feel for what’s going on and how to build the best term sheet for your company,” he added.

Visit VANTEC, E-Fund and NACO at the BCTECH Summit in Vancouver on March 14th and 15th (booth 218), or join the conversation around Canadian-specific term sheets on March 16th at NACO’s panel discussion and Q&A session, “What Term Sheets to use for Different Early Stage Financings” (tickets available here).