Hunter Macdonald, Tutela Technologies | BCBusiness
Guys like Tutela Technologies’ Hunter Macdonald are getting a big boost from university tech-accelerator programs.
From dorm room to boardroom, B.C. universities are helping young entrepreneurs take flight
Hunter Macdonald’s startup story is the kind that makes wannabe tech entrepreneurs salivate. As the CEO of Tutela Technologies Ltd., he and his co-founder, COO Brennen Chow, found a specifically defined need in the market, addressed it with clever software and watched the money roll. In June the company closed its second round of venture-capital financing.
But these broad milestone markers are about all Tutela’s story has in common with the clichéd startup fantasy. The founders of the company, which makes a tool that relays analytics from mobile devices to telecom providers, didn’t drop out of university and bootstrap their venture from a basement coding cave. In fact, the company wouldn’t even exist if it weren’t for the University of Victoria’s help.
Entrepreneurship@UVic, launched in 2010, is one of a growing number of accelerators in B.C. that aim to leverage university resources to foster the growth of tech ventures. Some models offer a path to seed financing, while others emphasize mentorship, education and early-stage idea validation.
SFU led the trend in 2008 with Venture Connection, a non-curricular program that provides workshops, competitions and networking opportunities. While there’s no attached fund to provide financing for successful student entrepreneurs, one of the program’s goals is to guide teams to the point where they’re in a strong position to seek venture-capital investment.
Matias Marquez, co-founder of Buyatab Online Inc., started developing his idea for an online gift-card marketplace in 2008 as a student at SFU. The company, which allows users to buy and give gift cards digitally, expanded its list of participating brands in 2012 to 130, including Cineplex and Boston Pizza. Marquez believes the SFU program—and, specifically, the support he received from mentor-in- residence and angel investor Jim Derbyshire—has been crucial to his success. “You don’t know what you’re doing,” he says. “The conversations are massively valuable. It really helps bring down the probability of failure.”
Since 2012, UBC has taken the academic accelerator idea one step further than its counterparts. Where UVic and SFU are seeking out ambitious students who want to start businesses but may not have developed their ideas, entrepreneurship@UBC is more interested in student entrepreneurs who need a final push to launch successfully. Unlike the others, UBC’s non-curricular program boasts an in-house $10-million venture fund governed by a board that includes such luminaries as Paul Lee, of EA fame, and Haig Farris, co-founder of D-Wave Systems Inc. Capitalized with alumni donations matched by contributions from the B.C. Innovation Council, the fund makes investments as large as $250,000. To date, the fund has made three investments, with two more deals in progress.
“The things that we’ve been able to accomplish generally are not possible for young startups,” says Tutela Technologies’ Macdonald. That’s because few entrepreneurs have the advantages he had. The UVic program was designed in partnership with venture-capital firm Wesley Clover Corp. to help students build businesses that meet existing market demand. Ten students a year are chosen for the 20-month MASc program. They don’t need to apply with a business plan, as is expected with traditional accelerators, because the intention is to innovate in response to industry demand.
Participating students get five semesters of training, mentoring and developing for their businesses, but the best also get investment from Wesley Clover. Tutela, for instance, received an initial $200,000 that Macdonald says paved the way for both growth and the June second round, in which Wesley Clover was joined by East Valley Ventures Inc. and Vancouver’s Yaletown Venture Partners Inc.
Equity in the companies launched by the program is split evenly between the student team, the Alacrity Foundation (the program’s government sponsor) and Wesley Clover.
What does the university get out of the deal? Not much. Startups, the theory goes, are good for B.C., so B.C.’s public universities are now hard at work incubating potential.
Silicon Valley has one big asset that makes it the global capital of tech entrepreneurship: its ecosystem. Large companies spin off new ventures, startup stars make lucrative early exits then go on to invest in the next big thing and industry veterans provide mentorship for the young padawans. In the absence of an ecosystem like California’s, B.C. universities are figuring out how to offer some of the same things. It’s a good time to be a tech-savvy student.