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.
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Congratulation Bootup! You did the right thing, although a very very tuff thing to do. You made it right as best you could and that take guts. First class posting!
Congratulations to the team for closing the financing and for bringing "the other Boris" on board. Like your cohort companies, Bootup has to make hard calls on occasion. The key thing is you made it and can now move forward. Bootup has become a critical piece of the startup ecosystem here and the important thing is that you survived to fight another day. Good on all of ya. Boris W, welcome aboard.
Umm. So lemme get this straight: You promised people funding you didn't actually have, didn't explain this until they arrived, and then booted them from Bootup after you realized you couldn't make true on your promises?
Sounds like you guys f'd up, big time.
An investor missing a capital call is very different from not having the funding in the first place. While I don't know about Bootup in particular, generally a missed capital call is punished by distributing all of their shares in the fund to the other LPs – quite punitive if it is not their first payment. That's why it happens so rarely.
I'd be curious to know how much of the shortfall was the lost investor and how far off they were when they invited the January cohort up.
"It was outside of our control, unintentional, and communicated immediately. "
Way to take responsibility. If people want to burn you at the stake for quashing the dreams of others after they've made such sacrifices, just maybe there's something to it. Just a complete non-apology.
Why does the comment count keep on dropping?
Not sure. Might be Intense Debate cleaning up some of the spam trackbacks – looks like many of the TC, Gigaom,etc. stories get re-aggregated all over the place.
The idea of Canadian incubators is a massive joke. The bulk of their funding was probably through government incentives, r&d tax credits and TeleFilm's media fund. It's the typical retarded Canadian mentality where government funding is a primary source rather than looking for individual investment.
I'm Canadian and the entire thing is pathetic.