Founders Play Your Own Game

Founders, Play Your Own Game

Brice Schechuk Managing Partner, Globalive Capital.

Founders, Play Your Own Game

Brice Scheschuk - 2025

Relevance

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Founder Focus

Capital Paths are Endless

i) people/culture ii) strategy (market, product, commercial, business model) iii) not running out of money 42% of startups fail because no market need

If you raise capital, it must be done effectively or you will destroy your business. You need to be thinking multiple steps ahead. This is an irreversible and consequential set of decisions.

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Every Deal is Unique

My presentation contains numerous examples from deals in which we have invested.

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Brice Scheschuk, CPA, CA

Co-founder, MindFrameConnect

Managing Partner, Globalive Capital

Creative Destruction Lab, NEXT,

Techstars, Founder Institute

CFO (Finance, HR, Procurement,

Logistics), WIND Mobile, Yak,

OneConnect, Pragmatic

Corporate Controller Leitch Technology

Internet 1.0 Start-ups

PwC

MARS Officer, Canadian Naval Reserve

B.Comm., Dalhousie University

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Our journey

● 1998 – Tony founded our first telecom business ($3K in revenue)

● 1998 – 2007 – Scaled Globalive, OneConnect, and Yak to $120M in revenue

● 2008 – Founded WIND Mobile and took on the Canadian wireless telecom oligopoly

● 2015 – Scaled to $500M in revenue and exited all operating businesses

● 2016 – Formed Globalive Capital to invest in technology and innovation (primarily in Canada)

● 2017 – Tony writes “ How We Can Win ” which articulates Globalive’s principles on how to move Canada

forward through entrepreneurial thinking, innovation, and risk taking

● 2021 – Scaled to 130 direct technology and 50 venture fund investments. Mentors at DMZ, Creative

Destruction Lab, NEXT, Techstars, Founder Institute

● 2021 – Brice writes “Mentoring Innovators” which articulates principles and applications to elevate mentorship

and menteeship

● 2021 – Globalive co-founds MindFrame Connect to elevate mentorship and build entrepreneurial resiliency

● 2024 – MindFrame Connect launches “Founders, Play Your Own Game”

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“Part of the reason I’ve been a little more successful than most people is I’m good at destroying my own best - loved ideas.”

— Charlie Munger

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Life is a long lesson in humility

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This presentation is not an indictment of VC or a commentary on ambition, it is a thought exercise about discernment (seeing what is true and learning from the truth)

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Founder FOMO - Pitchbook

Silicon Valley global messaging – high

performance vs lifestyle

• Founders drinking the YC Kool-Aid and looking

for validation through VC

Too much money

Too high valuations

Why?

• Herd mentality – where did the contrarians go?

Fake unicorns

• Broken cap tables, broken exits, and BROKEN

FOUNDERS

• Lack of understanding of VC business model

Lack of understanding of the multitude of

capital paths

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Thought Exercise #1

What if the tech press wrote 49 articles about company failure for every one article about fundraising success?

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I am a member of a group of 35 technology entrepreneurs that have exited their businesses and have a minimum net worth threshold – very few raised venture capital!

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VC is interesting in limited circumstances: Deep Tech, High Entry Costs, Extreme GTM Growth

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Are we missing something?

Small business / main street / lifestyle

Mid-potential Entrepreneurship (“Mighty Middle”)

Extreme Potential / VC-backable

Scale potential

Potential for a good salary

Potential for life- changingly profitable

Potential for foundation- level wealth

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Source: Ben Hallen and Ed Hallen, Re-Considering th e “Mighty Middle” of Entrepreneurship

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We need to get back to basic business building. Focus, focus, focus more on achieving product- market fit and less on raising capital

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Celebrate customer and product wins . Do not celebrate fundraising, dilution , and the road to selling your business

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Let’s deal with ambition

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“We are more self -confident

Maybe it was because we were bootstrapped for the first six years, maybe it was typical Canadian humility, but Shopify began as a modest company.”

Tobi Lutke’s 2018 Letter

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“ We bootstrapped for over 10 years. This resulted in a level of focus and ‘leanness’ that made PointClickCare what it is today. I advise all founders to stay as lean as possible while building to product market fit to stay focused, eliminate distraction, and most important, truly understand customer demand. ”

Mike Wessinger

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“Dasilva’s strong vision for how to build a company was not immediate, but a product of Lightspeed’s early years as a bootstrapped company. When you bootstrap, you have more time to really know what you stand for — to really build a set of values and a way of operating that’s uniquely your own.”

Betakit, October 19, 2020

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Why are you doing this and what is your number?

Your Number

Probability of Success

$100 million

1%

$10 million

15%

$5 million

30%

$2 million

50%

Look inside oneself Business building is a marathon, not a sprint! Plan for 25 years of building

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Venture capital is a domain of outliers . Venture scale growth means something specific. Do you understand what this means and are you an outlier founder ?

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Power Law Returns

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The best VCs expect most of their portfolio companies to not return capital

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• I pay a lot of fees, and my money is completely locked up

VC should be very hard

• NASDAQ 100 ( QQQ ) performance: 20 years 14.5% , 10 years 18.7%

What I expect from VC GPs

• 10 Year Fund , MoIC 5X, DPI 1X by Year 8, IRR > 20% • Power law portfolio construction • The skill to SELL investments • Non-Consensus Alpha seeker

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How are VCs doing?

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How are VCs doing?

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Get in the VC’s head Venture Mindset, Ilya Strebulaev and Alex Dang

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Founder ○

Venture scale growth capabilities

Unfair advantage

Idea ○

Big problem, vision, TAM, durability

Outlier Founders (Two Small Fish Ventures)

Tangible narrative to 100X the business (not 2X or 5X)

Execution ○

Ability to get from here to there Traction may validate ability to execute

Exit Opportunity of 100X

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“Outlier founders should be unrecognizable to their former selves every two years.”

— Allen Lau, Two Small Fish Ventures and Wattpad

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Determination (will, discipline, ambition, formidable)

• Relentlessly resourceful (flexible) • Imagination (earnest) • Naughtiness • Friendship

Founders (Paul Graham)

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Productivity Narrative - Prioritization, Simplification, Focus

“Look at the characteristics of what a successful high growth entity looks like. Mike Maples of Floodgate, who spoke to the GP Academy said, “What I like in a start -up is $0 to $10 million in annual recurring revenue growth in less than 18 months with less than $9 million invested”. Embedded in that is a tremendous amount of design and efficiency. How do you get to that kind of scale with that kind of efficiency? Think very carefully about the elements of the business model. What do you focus on first? You’re never focusing enough. You’re spread too thin. Focus wins. ”

Phil Wickham, Sozo Ventures and Kauffman Foundation

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Difficult to generalize

Entrepreneurial obsession

• Chip on shoulder to solve a big problem in a big market – usually articulated as vision • Unique focus on execution with a maniacal ability to subtract distractions • Understands durability and moats • Self confident, obsessive learning machines • Decisive decision makers that can pivot (iterate) quickly when the facts change • Ability to make hard, company changing moves – point to platform, SMB to enterprise, NA to global, etc. • Inspirational but not always in a nice, friendly way • True builders • Nothing is sacred. Extremely non-consensus • Jeff Bezos, Daniel Lubetzky

What is an Outlier Founder?

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Outlier Founder = Curious and Obsessed

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“No VC wants to fund anyone with mediocre growth .”

— Jason Lemkin, SaaStr Founder and VC

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• $1m ARR, five year growth > 3X, 3X, 2X, 2X, 2X

• $100k-$1m ARR, growth more than 200%

• $1m-$5m ARR, growth more than 125%

• $5m-$15m ARR, growth more than 100%

What is Venture Scale Growth?

• $20m-$40m ARR, growth more than 60% - 80%

$50m ARR, growth more than 60%

• $100m ARR, growth more than 40% - 50%

• IPO > $10 billion market cap, > $1 billion revenue

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“ What would have seemed like interesting growth two years ago, seems positively sluggish today. The widespread belief is that only 10x annual growth is worth chasing, and that this is only available in the AI application world. That sort of growth rate is remarkable - and seems to throw quite a bit of shade on the previous goal of ‘triple, triple, double, double’ that used to mark a best -of-breed early- stage software company.”

— Gil Dibner, Angular Ventures

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• 117,566 SaaS and Cloud Tech companies were founded globally • 37,327 of those companies founded are (or were) VC-backed • 13,789 of those raised more than $3 million • 168 of those achieved > $100 million in ARR • Median time to $100 million ARR is nine years

Software Company Statistics (2005 - 2022)

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Venture Capital Structural Cyclicality (Bill Gurley)

Sawtooth cycles

Slow build of risk on

Quick crash when risk off

● Limited exit windows (bubbly) for VCs

VC backed founders need to

understand the cyclicality and

manage effectively

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1. Raise institutional VC again within two to three years – 8-15% probability of making it to a Series B) 2. Milestones not met (or market changes) and you raise a bridge or extension round – 4% probability of making it to Series A 3. Cannot raise and run out of runway – negligible probability of a positive outcome 4. Achieve profitability (also known as one and done) – default alive but usually growth is

What happens if you raise early VC (pre- seed or seed)?

too slow for institutional shareholders to care and requires a cap table clean-up solution

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Thought Exercise #2 What is harder? Operating lean for the amount of time necessary to understand your customers and market; or, raising pre-revenue at a $10 million valuation and setting yourself up for a required $1 billion exit before a single customer sale.

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“Some decisions are consequential and irreversible or nearly irreversible – one-way doors – and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation . If you walk through and don’t like what you see on the other side , you can’t get back to where you were before .”

— Jeff Bezos, Amazon

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The decision to raise external capital is consequential and irreversible

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Invert, always invert : turn a situation or problem upside down. Look at it backward.

“All I want to know is where I’m going to die, so I’ll never go there.” - Charlie Munger

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• Seek out a top decile VC - they earn all the returns, will raise multiple funds, and attract other investors • Negotiate fair compensation – you need to get paid for the risk • Plan for secondary transactions in advance – VCs make fees and you need to make meaningful money along the way

If you decide to raise VC

Ask for shared carry

• VC fund life cycles do not match business building life cycles. Start planning for the inevitable refinancing as early as possible

You will always be fundraising

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If you are not an outlier founder, or don’t want to climb on the venture scale treadmill, it is okay. Look inside oneself and match your capital path to your reality

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Ask yourself again: Why do you need capital?

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Source: Mark Suster, Planning for an Exit: Some Lessons for VCs and Entrepreneurs

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Co-founders

• Customers (including services)

• Non-traditional business models (e.g. franchise)

Non-dilutive

Angels

Non-VC Sources

Revenue financing

Debt

Private equity Crowdfunding

Tokens

IPO / RTO

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• Cofounding a company creates immediate equity decisions:

How do you divide up the equity?

What happens if cofounder(s) leave?

Think about control

• Learn revesting and reverse vesting principles upfront • Consider and define the terms of a cofounder exit in your formation documents • Cofounder exits can be as difficult as (or more difficult than) divorces • Build your documents and cap table using institutional principles

Co-founders

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Services

Discovery

Waitlists

Proof of concept

Customers

Prototype

Minimum viable product

Pilot

Go to market, distribution

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Continuous monitoring

Company stage: • Early stage – Create phase

• Product-market fit validation – Job creation / IP • Growth / scaling – Government identified areas of interest (e.g. Supercluster) Government programs: • Understand seasonality (e.g. March is bad for IRAP) • Timing, grant, reimbursement • Reporting requirements, information (e.g. DEI) • IP ownership • Personal guarantees • Active or closed • Agency driven funding asks the same first 10 questions, thereafter is agency specific • Use a service (e.g. HighPath.io, Boast.ai, HelloPocketed.io) •

Non-dilutive

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3 Scales of Entrepreneurial Opportunities

Fundable by VCs and many Angels

Main Street Entrepreneurship (Small Business / Lifestyle)

Mighty Middle (Mid-Potential)

Venture Scale (Unicorn Potential; Extreme Scale)

Hundreds of thousands; Very low millions ($10^6)

A few million to tens of millions ($10^7~$10^8)

Hundreds of millions (>=$10^9)

Potential value in 5-10 years Addressable Market Size in 5-10 years (including growth)

Blue Pond (Small region, small niche)

Blue Lake (National, international niche)

Blue Ocean (Large national, international market)

•Differentiation within city / neighborhood •Relationships with customers

•National differentiation •Moderate fixed costs (product design / refinement) •Brand / reputation for quality •Moderate learning curves

•Network effects •High fixed costs (product design / refinement) •Strong Patents •Strong learning curves

Common Sources of Competitive Advantage

Fast (<1 year)

Moderate (1-2 years)

Slow (5+ years)

Speed to Financial Self Sufficiency

Note: Scale potential is based on a combination of addressable market size, sources of competitive advantage, and multiples. It is a judgment and may vary across evaluators, be imperfect, and evolve.

Potential for High Returns for Entrepreneur

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Source: Ben Hallen and Ed Hallen, Re-Considering th e “Mighty Middle” of Entrepreneurship

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• Funding: Often need to show profitable growth before raising much outside equity investment • Hiring: Limited ability to hire and train top-industry talent for a while

Mighty Middle Businesses are Built Differently

Learning and advice: Less embedded in dedicated entrepreneurship networks

• Competitive strategies: Less able to subsidize growth; less early capital for long-term investments

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Source: Ben Hallen and Ed Hallen, Re-Considering th e “Mighty Middle” of Entrepreneurship

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• Much more prevalent than extreme growth entrepreneurship (easier to identify?) • Still has scale potential sought by many aspiring entrepreneurs with higher opportunity costs • Weaker network effects allow more entrepreneurs to win and reduces speed of competition • Mid-size TAMs means less likely to attract competition from large incumbents

Important for Mighty Middle Entrepreneurs

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Source: Ben Hallen and Ed Hallen, Re-Considering th e “Mighty Middle” of Entrepreneurship

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Every bootstrapped founder wants more capital. Every funded founder wants more control. Mindset wins

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Sample Mighty Middle Playbook: 7 Levers

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Source: Pete Williams, 7 Levers Framework, Link

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Sample Mighty Middle Playbook: 7 Levers

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Source: Pete Williams, 7 Levers Framework, Link

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• Bootstrap, non-dilutive capital, capital efficient growth, profitable, M&A exit

• Bootstrap, non-dilutive capital, one (small) raise from operators/angels, capital efficient growth, profitable, M&A exit

• Bootstrap, non-dilutive capital, debt (bank, BDC or venture), capital efficient growth, profitable, private equity, M&A exit

Alternate Capital Paths

• Bootstrap, non-dilutive capital, one (small) raise from operators/angels, one VC raise, capital efficient growth, profitable, numerous options thereafter (private equity, M&A, IPO)

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Remember if you borrow money you have to pay it back!

Beware of BDC Personal Guarantees

Anyone who has ever taken on debt

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This is my fifth macro crisis

• The bubble burst in 2022. This was necessary • Recalibration started in H2 2022 and will continue through 2025 as companies run out of runway and VC’s have to raise their next funds. Insider rounds and recapitalizations happening everywhere • Overall assets allocated to VC are shrinking • Exits (aka liquidity for LPs) are way down • Capital efficient growth, path to profitability • Default alive, default dead, default investable

Current Reality

Governance is back

• Non-arms-length transactions, side hustles, and self-dealing are major red flags

Valuation is important

• Focus, simplify, prioritize – subtract not add. PMF

• Founders need to maximize optionality

• Fundraising is back to 2018/19 analogue – time, DD, size of round, etc.

Great time to be a founder

Bubble behaviour again – AI, Crypto

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Inversion: Problem Solving in Reverse – Link

• Ben Hallen and Ed Hallen – Scaling a Midsize Startup - Link • Pete Williams – 7 Levers Framework – Link • Rob Snyder – The Path to Product Market Fit - Link • Bootstrap Podcasts – Startups for the Rest of Us, Practical Founders, Profit Led, Unfunded • Jason Lemkin – Look, No VC Wants to Fund a Start-up With So-So Growth. Except Maybe Your Existing Investors – Link • World of DaaS – Interview with Michael Seibel of Y Combinator - Link • Chris Neumann – VC (Probably) Isn’t Right for You - Link • Don’t Raise Venture Capital: Hiten Shah’s Route to Riches – Link • How to Bootstrap to Product Market Fit – Link • He Gave Up on Chasing Unicorns – Link • Basecamp – Why We Chose Profit - Link

Resources

Venture Mindset – Ilya Strebulaev, Alex Dang - Link

• From 1m to 100m revenue: Scaling VC backed SaaS with Notion Capital -Link • Hustle Fund – Raise Millions - Link • Steve Blank - Raising Money - Link • Alex Iskold – Startup Hacks - Link • Angela Tran and Boris Wertz - Startup Handbook - Link • Charles Plant – Unicorn Math - Link • Tank Talks - Fundraising - Link • 20 Minute VC – Fundraising Like a Pro - Link • First Time Fundraising - Link • Michael Ho – Investor Expectations and Capital Efficient Growth - Link • Joe Speiser – Fundraising System – Link

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Deals

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Field audit and daily checklist software targeted at restaurants

Background

MeazureUp

• • • • •

Bootstrap

Financing Progression

Friends and family round Seed round - operator angels

Key lesson: Bootstrapping and operator investors, not VCs

Debt

Exit to Private Equity

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Business software and payment solutions for gyms, fitness studios (yoga, MMA, dance), etc.

Background

Wellness Living

• • •

Bootstrap BDC debt

Financing Progression

Late seed round - operator angels Late seed round extension Debt, PE growth round and secondary

Key lesson: Bootstrapping and operator investors, not VCs

• •

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Background

Digital real estate brokerage

Zoocasa

Opportunistic purchase from Rogers -founder financed Seed round - operator angels

Financing Progression

• • • •

IRAP

Key lesson: Carve out with quick move to cash flow, operator investors not VCs

Cash flow

Exit to eXp World

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Background

Collaboration service provider

Pragmatic Solutions

Wholesale deal with Globalive for telecom infrastructure and finance support Two angel loans with a revenue royalty that converted to equity

Financing Progression

Key lesson: Studio model, cash flow driven growth

• • •

Bank facility

Cash flow

Sale of assets and wind down

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Background

Secured Browser / Private VPN / IP Masking

SurfEasy

• • • • • •

Mantella Venture Partners Comerica Venture Debt

Financing Progression

MARS IAF

SRED

Two angel rounds

Key lesson: Customer sales trump all else

Customers - TV shopping networks

Exit to Opera

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Infrastructure as a service and marketplace for satellite and other space data

Background

SkyWatch

• • • • • • •

Bootstrap

NASA hackathon Convertible / SAFE

Financing Progression

Google cohort, Velocity, CDL, Techstars NY Angel round / small VC’s

Key lesson: Significant accelerator participation to get the story right

Series A round Series B round

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Restaurant scheduling, messaging, performance management

Background

7Shifts

• • • • • • • • • •

Bootstrap

Draper accelerator - Boost Convertible debentures / Safe

Early seed round

Financing Progression

Seed round

Government innovation funding

Key lesson: Non-dilutive government funding

Series A round

Series A extension round

Series B round

Series C round - Softbank

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Background

Restaurant maintenance intelligence and marketplace

ResQ

• • •

Bootstrap

Early seed round

Financing Progression

Seed round - brought Homebrew to Canada Seed extension round

• •

Key lesson: Optimized investor group when building cap table

Series A round - Tiger Global and Canvas Series A extension round

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Tablet-based point of sale and payment solutions for restaurants

Background

TouchBistro

• •

Multiple angel rounds

Financing Progression

VC Series A-E - eight VC’s including a Japanese corporate VC and JPM

Key lesson: Massively scalable institutional investor base

Secondary

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Predictive sales software and one to one messaging for wireless carries and dealers

Background

Statflo

• • • • • • •

Bootstrap - large customer

Angel rounds Seed round Venture debt Series A round

Financing Progression

Key lesson: Venture debt reduced dilution

Series A extension round

Bank debt

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Background

Incentive compensation management software

Varicent Software

• •

Large angel round

Financing Progression

Three VC rounds - two Canada, one in Silicon Valley

• •

Exit to IBM

Key lesson: Traditional VC path

Spin-out from IBM with tech PE

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Background

CSI / forensics in the cloud

SceneDoc

Friends and family including in-kind for sales and finance

Financing Progression

• • •

Two angel rounds

MARS IAF

Motorola Ventures / iGAN Partners

Key lesson: Corporate venture capital

• •

Venture debt

Exit to Tyler Technologies

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Background

Fraud solutions for U.S. mortgage banks

Pitchpoint Solutions

• • • • • • • •

Multiple angel rounds

SRED

VC round

Financing Progression

Venture debt

Common equity venture round

Key lesson: All common equity cap table

Bank debt Cash flow

Recapitalization

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Background

Drone IP

Draganfly

• •

Angel rounds

Financing Progression

Go public transaction with CPC (RTO) and equity / debt financing as required thereafter

Key lesson: RTO with methodical build in microcap capital markets

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Background

Cannabis lifestyle brand and distribution

Tokyo Smoke

• •

Two angel rounds

Financing Progression

Go public transaction through merger with DOJA Cannabis (TSXV) and renamed to HIKU

Key lesson: Momentum driven, quick RTO and exit

Exit to Canopy Labs

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Background

International licensed producer

Nuuvera

Financing Progression

• • •

Two angel rounds Go public transaction Acquired by Aphria

Key lesson: Momentum driven, quick IPO and exit

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Background

Craft brewery with pubs

Mill Street Brewery

Financing Progression

Multiple angel rounds - danger of infrastructure

• •

Bank lines of credit

Key lesson: Financing infrastructure has unique challenges

Exit to Labatt / AB Inbev

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Background

Real estate rental and development

Brockview Rentals

Family funding from operator, remainder Globalive principals

Financing Progression

Personal guarantees for mortgages Property management contract for operator

Key lesson: Debt and the use of personal guarantees

Construction loans

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• • •

Telecom services Consumer - Yak

Background

Business / Hospitality - OneConnect

Globalive Communications

Two angel rounds plus a secondary

Financing Progression

Divested tucked in divisions to generate liquidity Senior secured bank facility to acquire Yak

Key lesson: M&A growth strategy

Sold to Accelerated / Distributel

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Background

Facilities based wireless

WIND Mobile

Strategic foreign investor - Orascom / Vimpelcom Equipment suppliers - Alcatel, Huawei, Nokia Equity recap - West Face, Tennenbaum, Guffey, Serruya, Hui Private debt - Canyon Partners

Financing Progression

Key lesson: Pure chaos

• •

Bank / ECA facilities

Exit to Shaw

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We must make war as we must; not as we would like

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Thank you.

Brice Scheschuk - LinkedIn

LinkedIn:

@mindframeconnect

Twitter:

@MindFrameCN

Instagram: Facebook:

@mindframeconnect @MindFrameConnect

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