Wertz joins board, first funding completed, portfolio reduced

We were going to be posting this tomorrow, but some people are asking for our side of the story this evening. We’re excited about the group of companies that we’re working with this year, and with the companies that we’ve funded in the past year. We have provided value to everyone that we’ve worked with, even if we had to ultimately make some hard choices recently.

Boris Wertz of W Media Ventures has made an investment in Bootup Labs.  Yes, that’s another Boris involved with Bootup. He becomes our first outside board member. Boris is one of the few people that is working tirelessly to build and grow an Internet industry in Canada. Wertz has always been a mentor to the companies at Bootup Labs, and now he’ll be stepping up his involvement.

We’re also announcing the first close of our 2010 fund, including a number of angels and local VC firm Growthworks. It took us a lot longer to raise funds that we planned – the climate for early stage Internet funds in Canada continues to be tough, and we had an investor unexpectedly back out, but we got it done.

This brings us to the last, unfortunate part of this announcement. We had informed our 2010 cohort when they arrived that it was going to take a little while to close the fund because of some new canadian venture regulations that we had to abide by, and because one of our investors was unable to fund when we made a capital call.  It was outside of our control, unintentional, and communicated immediately.  It took two months to recover but eventually realized that we were going to have a limited fund in the beginning of the year, and we had to make some hard choices. Either starve everyone with partial funding, or reduce the portfolio and fund them fully?  We made the decision to cut the cohort to 3 companies, from 7.

While we expect that some people will cry foul or want to burn us at the stake or accuse us of having mislead some young entrepreneurs, please understand that this is absolutely not the case.  We kept everyone informed along the way and event made every attempt to make this right, at no gain to us.  We used  every last cent of our personal money to bridge Bootup and close the funding. We supplied a great deal of support and value to the 7 companies over the first 2 months of our 2010 cohort, and we received nothing in return for the 4 companies that were cut.  We still count all the companies that we’ve worked with in any capacity as friends of Bootup, and wish them all the best.

Bootup is back on solid ground and ready to continue it’s role as a leading North American Seed Accelerator.