If all goes well, last week’s inaugural deal pitch event for the newly created North Forge Angel Network could signal a sea change when it comes to the search for capital for the scores of new companies that have started up during the COVID shutdown.
In collaboration with the National Angel Capital Organization (NACO), North Forge has assembled more than 1,000 qualified investors from Canada and some from the U.S. who will have the chance for a first look at investing in North Forge’s burgeoning stable of startups.
About 20 investors took part in last week’s virtual pitch from four North Forge companies — Memi Corp., Carbonlock, Spontivly and Aurora Aerial.
Regardless of the level of enthusiasm that is vocalized at these kind of events, the closing of actual investment takes time.
But Joelle Foster, the CEO of North Forge, said there was an excellent level of engagement and a good amount of optimism.
“Some of these companies are definitely going to get funded,” Foster said.
Kevin Gordon, the founder of Memi Corp., an online verification service he is hoping to launch in the fall, said the assistance North Forge provided for the companies before the pitch was crucial.
“I think it went well. There were great questions from the investors and lots of great feedback,” he said. “Joelle and the rest of the team at North Forge were fantastic at setting us up for success.”
Just prior to the pandemic, North Forge revamped its operating structure and in the process, over the past year and a bit, almost tripled the number of companies it is working with, including reaching outside the Manitoba borders. It’s now working with 13 companies based elsewhere in the Prairies, including Edmonton-based Spontivly, a community management platform that handles the full life cycle of community management, from streamlining workflows to generating community insights.
“COVID certainly has shaken up a lot of people and inspired many to want to start their own business,” Foster said. “The pandemic has shown there is a massive market for tech-enabled companies. Everyone is more tech-savvy so there is easier adoption and acceptance now for all these new platforms and technology solutions coming out.”
For instance, Memi Corp. is looking to address the enduring concerns people have about identification integrity online.
Gordon said there has been close to $500,000 of sweat equity injected into the company with software developers from around the world collaborating in building its technology. But instead of getting paid, those service providers agreed to take shares in the company instead.
That’s why the North Forge Angel Network will be integral in the development of tech-enabled companies starting up in Winnipeg, with the hopes of creating the next SkipTheDishes.
One of the key elements of a successful angel network is that the companies that are seeking the investment are actually in a position to be ready to take on investors, which in many cases is not a trivial concern.
On that front, North Forge works hard at qualifying the startups that pitch and has licensed the use of a service called DealPoint, an investment administration platform to present and execute syndicated angel investments. It allows interested investors to go to a virtual “data room” for the pertinent financial information on the North Forge companies they are considering investing in.
Foster said the plan is to hold another pitch event in the fall. The frequency of subsequent events will be relative to the state of readiness of its companies.
Angel investor networks are not new, but North Forge is trying to create some distinction with its large roster of potential investment targets by stressing diversity and inclusion.
Foster thinks that at least some of the recent “massive uptake” in new companies applying to North Forge may be because there are few incubators in the country headed by women.
In addition to the four companies that gave a full six-minute pitch, the sessions will include a shorter presentation from companies deemed, “ones to watch.” Last week, that was a company called Serenity Productions, whose pitch is that it is developing “femtech pleasure products, invented and designed for women by women.”
“We are trying to make the angel network more inclusive,” Foster said. “It is going to take some time. We want to get rid of the bro culture.”
martin.cash@freepress.mb.ca
Martin Cash
Reporter
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.