We spoke with this year’s winner, Ronny Barrelli, the founder and CEO of TrendyMED Inc. Here’s what he had to say about the win and his entrepreneurial journey. 

Hi, my name is Ronny Barrelli, and I’m the founder and CEO of TrendyMED Inc. We are so excited to have won the 2013 Up-Start! Competition. Including this recent win, TrendyMED has won three important awards in the past six months of key venture competitions.

This recognition goes along with the great feedback and support we have received from industry experts, key opinion leaders and potential customers. It also marks a memorable milestone in the evolution of our venture toward becoming a proud global Canadian company that can significantly impact patients’ quality of life and care, and save billions of dollars for governments and healthcare providers in taxpayers’ money.

How do we do it?

The pitch: Ronny Barrelli, founder and CEO of TrendyMED Inc.

We have a technology that can replace gravity! No need to be alarmed, though, we can still keep our feet on the ground, at least for now.

To be more specific, TrendyMED has invented the MobileIV infusion device, a small, lightweight, environmentally friendly product that delivers intravenous (IV) infusion liquids to patients from any size bag without the need for gravity and poles. The MobileIV does not require any power source or even batteries, and it can be mobilized safely and easily anywhere, anytime and in any position. Plus, it costs only a fraction of what traditional IV devices cost, yet offers much greater value to both patients and healthcare providers.

Lessons learned

From the moment I conceived the idea of the MobileIV infusion device while being an IV patient myself a few years ago up until the moment of winning the Up-Start! Competition, many lessons have been learned. I would like to share some of these insights with both existing and aspiring entrepreneurs alike, with a focus on our perspective as participants in the Entrepreneurship 101 program and our experience during the Up-Start! Competition.

While MaRS provides an abundance of useful services and resources, such as market intelligence, advisory services and various educational tools, I found the Entrepreneurship 101 program to be specifically focused on refining the building blocks of our business plan. Some of the sessions that were of particular relevance to us were:

• The session on bootstrapping, which helped us realign our strategy to more effectively invest our resources and money to achieve our desired outcome; and
• The session on the go-to-market strategy, which enabled us to look more realistically at our limited resources versus the objectives we would like to achieve, especially during Year 1.

We have now narrowed down our focus to select key customers, including the Canadian Forces, EMS and up to two key hospitals, as part of the market validation process through MaRS EXCITE and the Canadian Innovation and Commercialization Program. The Entrepreneurship 101 sessions and others were instrumental in helping us to adopt a more practical and realistic approach, allowing us to optimize our business plan.

The judges: William Brown, Sonia Sanhueza and Rob Scully

The Up-Start! Competition process and Entrepreneurship 101 sessions allowed us to interact, network and listen to what others had to say, which helped us in substantiating our value proposition with one of our most intriguing market segments: emerging economies in Africa, Asia and South America.

Millions of people—children and adults alike—suffer each year, and many die each year, from dehydration, malaria, dysentery and diarrhoea, among other afflictions. Healthcare providers in these continents rarely use electric IV pumps as they are very costly and gravity poles do not offer the mobility, accessibility and ease of use required. In this respect, the MobileIV can offer valuable benefits to improve quality of life and care, and can significantly help in decreasing mortality rates.

Here are three of the main tips and highlights we picked up in the Entrepreneurship 101 sessions.

1)    Focus on select key achievable objectives. Focusing on too many objectives is neither practical nor realistic.

2)    Adjust your resources to your existing budget. Fundraising is important, but knowing what you can achieve with your current budget is of even more importance at this early stage.

3)    Make your pitch clear and simple—to view, to read and to explain.

These three tips, coupled with the feedback we received from the advisors during the Up-Start! Competition, allowed us to perfect our pitch to the level where we were confident that it was clear, engaging and compelling enough for the finals.

I am a very passionate person by nature and this comes across to the audience when I pitch. Having a great idea is important, but a pitch is not always about the content—it’s mostly about the delivery. It’s about how compelling and engaging you are in delivering your story and message.

The winners! Ronny Barrelli, founder and CEO of TrendyMED Inc., winner of the Up-Start! Competition prize (left); Mihnea Stoian and Ana Caracaleanu of Luevo, winner of the People’s Choice Award (centre); and Tony Redpath, master of ceremonies (right)

Finally, you will encounter many challenges, both with developing your product and with building your business plan. We encountered many, from technical challenges with research and development to a lack of relevant market intelligence information. However, putting in the right effort and thought process led us to overcome most of these challenges. In fact, the challenges will increase as your venture evolves, but with the proper state of mind you can beat them all.

As Sir Winston Churchill once said: “Kites rise high against the wind.” My very best wishes to your success. — Ronny Barrelli

To view more pictures from the competition, check out our Flickr page. The Entrepreneurship 101 series will begin again on September 25, 2013. Join us to learn the fundamentals of building a successful business. Register now!

For those unfamiliar with the term, a hackathon is a 24- or 48-hour event that brings together members of the development community to focus on rapidly developing and prototyping technical solutions to everyday problems. AngelHack’s goal is to help aspiring entrepreneurs follow their dreams of building real businesses from crazy ideas that all started with a hack.

AngelHack is both a hackathon and an accelerator program. This year alone, the group will organize 100 hackathons, bringing together over 15,000 developers in over 50 cities.

Winners from each city are admitted to the AngelHack Accelerator, where they are mentored in their respective cities for 12 weeks before heading to Silicon Valley and the TechCrunch Disrupt conference to raise investments and meet with global incubators.

This weekend alone, five simultaneous AngelHack competitions took place around the globe in Toronto, Melbourne, Seattle, Moscow and Chennai. MaRS was a proud sponsor of the Toronto hackathon, providing the venue for the two-day event.

Previous AngelHack winners have moved on to attend Y Combinator, AngelPad, TechStars, 500 Startups and other incubators around the world.

The event kicked off with a welcome address from Greg Gopman, CEO of AngelHack, who flew in from Silicon Valley. Greg pointed out that Toronto’s startup community is one of the most vibrant and thriving in the world and that its startups and talented entrepreneurs are world class.

After sponsor presentations, the hacking was officially underway—and in typical hackathon fashion, caffeine, sugar and headphones were a plenty.

Moving in for the weekend

There were also many Nerf guns and remote-controlled helicopters on hand to keep the attendees entertained and interacting with one another.

What’s a good hack without toys?

Red Rain Energy Drink was a generous sponsor of the event and provided a fully stocked candy, chip and drink bar for the teams.

Stockpiling at AngelHackTO

Many teams chose to hack through the night, taking shifts, and some even opted to set up camp in the MaRS Atrium under the escalator!

sleeping under the MaRS escalator

In total, 53 creative and innovative tech projects were submitted, which were then  narrowed down to the following top seven:

1. Bitcrowd
Bitcrowd is a crowdfunding platform for app developers. Users can bid on developers’ time (more features, widgets, etc.), and the platform also provides useful data and analytics.

2.  SMRZr (pronounced summarizer)
SMRZr allows users to record YouTube videos and share them with friends. Watch it. Summarize it. Share it.

3. Code.Kata
Code.Kata produces quality data about developers for recruiters through the gamification of code tests and real-time matches.

4. Tune.r
Tune.r brings focus groups to the masses with a crowdsourced video metrics tool that allows people to rate media as they play.

5. Dazzle
Dazzle provides editable website templates. Any designer can submit a template and earn royalty fees.

6. Chip
Chip is a wearable device that reads your heart rate, perspiration and body temperature, and whose open application programming interface can be used by developers to create any app with a sensor. Chip can also give pre-emptive notification of heart attacks.

7. Code Warrior
Code Warrior is gamification software that helps children learn how to code. Kids play a game and the software shows the real code in the app as they play.

The competition was certainly fierce! Code.Kata took second place and Chip, a team of six, was the grand prize winner.

The winning team…Chip!!

The event sponsors, PayPal, OANDA, Prepr Foundation and Context.IO, also gave away prizes, including Boxbees, Apple TV and Apple gift cards.

A special thank you goes out to the MaRS AV team, Allen Gelberg, Janet Grant, the awesome panel of judges (including MaRS’ own Sue McGill), the generous sponsors and last, but not least, event organizers Robert Hamilton, Caitlin McDonough and Salar Chagpar.

Keep on hacking!

We had covered some interesting topics: the fuel efficiency of different vehicle models, hybrid-electric versus electric vehicles and, of course, alternative methods of transportation, namely walking, biking and public transit. But we hadn’t talked about the trucking industry at all! Which left out a significant portion of the fossil fuel-consuming, greenhouse gas-emitting transportation sector from our discussion.

In Canada alone, trucking represents a $65-billion industry, employing over 260,000 drivers. In 2006, heavy trucks accounted for 21.8 billion kilometres of transportation in Canada and medium-sized trucks accumulated an additional 7.4 billion kilometres (Canadian Trucking Alliance).

To put that in perspective, that’s about 730,000 trips around the Earth or 97 round trips to the sun. All of this accumulated mileage requires fuel—lots of fuel. However, fuel requirements, primarily diesel, include not just the amount of fuel needed to move the transport vehicle from location to location, but also the energy required to run the HVAC and auxiliary power systems that are necessary to maintain the vehicle’s cabin environment.

EnerMotion, an Ontario-based startup and MaRS client, has developed a method of capturing waste exhaust heat from a vehicle and converting it into useful, practical and efficient energy. EnerMotion’s Hybrid Power & Energy Recovery (HYPER) storage system is an innovative mobile waste heat recovery and energy storage system with potentially huge implications in transportation applications.

Market-changing technology

The goal of the HYPER system is to reduce operating expenses for the trucking industry while meeting anti-idling laws. The system improves the overall efficiency with the vehicle both in motion and at rest. Additionally, the HYPER system is an environmentally friendly solution that has the potential of removing thousands of kilotonnes of carbon dioxide emissions every year. In fact, the carbon dioxide reduction for a long-haul truck with a sleeper cab adopting the HYPER unit is estimated at 92 cubic metres (32.5 tonnes) per year, with an average truck in Canada and the United States realizing 55 cubic metres (19.5 tonnes) per year. The corresponding figure for the entire North American truck fleet would be 48,900 kilotonnes per year!

How does it work?

Waste heat from the truck’s engine, in the form of exhaust, is captured and used to drive a refrigeration cycle similar to the process used in your fridge at home. The HYPER system is able to generate cold and hot thermal conditions with the same unit, providing a complete HVAC system for the truck’s cabin and sleeper without consuming any extra fuel. Further, the HYPER unit has the ability to store thermal conditions to provide HVAC capabilities for various haul routes in a variety of environmental conditions and climates while the vehicle is at rest, thereby eliminating idling of the main engine or the use of diesel auxiliary power units. The technology offers significant operational cost savings and lowers greenhouse gas emissions.

EnerMotion is currently conducting road trials of their HYPER system on their own heavy-duty truck. They most recently returned from Florida, where the trials yielded very positive results. The company will be expanding field trials with customers in the coming months as traction increases all across North America.

And the award goes to…

EnerMotion’s HYPER system was recently chosen among thousands of submissions to receive a 2013 Invention Award from one of science’s most widely read magazines, Popular Science, which has more than seven million readers. The magazine’s May 2013 issue announced the winners of the 2013 Innovation Awards, giving EnerMotion top honours in the energy category with the award for “Hot Savings.”

Raising capital

In a recent Meet the Entrepreneurs panel at MaRS, Jack MacDonnell, CEO of EnerMotion, talked about the difficulty of raising capital and emphasized the need to maximize use of government funding programs. Jack and his team have made full use of Canada’s funding programs, which have allowed them to finance the development of HYPER.

Thus far, EnerMotion has received financial support from:

• the Ontario Centres of Excellence;
• the National Research Council of Canada’s Industrial Research Assistance Program;
• the Toronto Atmospheric Fund—Impact Investing;
• the Natural Sciences and Engineering Research Council of Canada; and
• Sustainable Development Technology Canada.

EnerMotion has also secured partnerships with strategic players who are helping the company to de-risk its technology and build out customer traction. You can see a list of EnerMotion’s partners on their website.

Advice for entrepreneurs

I sat down with Jack to discuss his business and to get some advice for up-and-coming entrepreneurs.

You’ve been extremely successful in securing non-dilutive government funding. How important has this been to growing EnerMotion?

Our government funding has really helped us leverage private capital and achieve progress from one year to the next. It’s a tough grind raising capital in North America, either from private investors, venture capital firms or investment banks. Having financial support from the government provides tangible differentiators between you and the next guy—and there are lots of other startups out there all vying for the same capital. In my humble view, Canada has one of the most accessible and rewarding funding infrastructures in place anywhere in the world, and if you’re not capitalizing on it for your own venture, you and your company are missing out.

What inspired you to tackle fuel efficiencies in the energy sector?

My team and I have been focused on energy efficiency since Day 1 of EnerMotion’s existence. We realized that changing infrastructure overnight was unrealistic, but that the world needed an answer to fossil fuel consumption and harmful greenhouse gas emissions now. This is what motivated us to develop the HYPER technology, because tangible benefits are the outcome of improving energy efficiency—especially in the heavy-duty transportation segment.

What is the return on investment for your technology? What’s the payback period?

Industry average with existing technologies (i.e., idling primary engines or utilizing fuel-powered auxiliary power units) is approximately three-and-a-half years, according to research company Frost & Sullivan. Our HYPER technology offers payback significantly less than one year for line haul drive cycles. Additionally, our HYPER unit functions while the vehicle is in motion, unlike any other commercial system, so there is additional payback associated with the elimination of the A/C compressor being driven off the engine.

There are several exemptions to many anti-idle laws that I see your company being able to address. Do you think systems like yours will become mandatory on idling vehicles in the future?

Legislation in the United States and Europe is already driving adoption of anti-idle technologies. Canada, Australia, India, China and other countries are not far behind in adopting and enforcing similar legislations. Other transportation sectors are adopting energy-efficient technologies that also contribute to the reduction of greenhouse gases. In addition to all of the vehicles on the road or off road, HYPER technology is being considered by original equipment manufacturers because of its compelling value proposition for their own customers. Mandatory adoption will be driven by clean air legislation and by the market demanding energy efficient products on a global scale.

Music and art are often held as ideals too lofty to be tainted by mere commerce, but any musician who has been around long enough will tell you that the life of a starving artist is no fun. The problem is that they don’t teach you how to run a business with four co-founders (read: a band) in music school.

Many musicians read articles by successful bands who say things like: “We just write songs for ourselves and don’t care what people think.”

Most successful bands have target markets

It may sound romantic, but it isn’t true. Most successful bands have a careful target market in mind (be it tween girls, 20-something hipsters or suburban hip-hop kids) when they write their music.

In fact, any major label will demand a customer profiling session and will conduct a series of focus groups to determine the marketability of a song. The looks of the band members and the design of the band’s website and album cover all need to resonate with a particular demographic. In short, the band’s brand needs to be consistent.

Concerts as focus groups

Speaking of focus groups, there is no better focus group setting than a concert where your current early adopters (that is, your die-hard fans) are all assembled in one place. You can try out new products (songs) and then carefully gauge your audience’s response. The trick is to not push your new product too quickly, but to weave in the new features with the old to make a seamless transition (“play the hits!”).

Just like startups, the product that allows a band to scale is often not quite the same as the product that got the band its early traction (Exhibit A: The Black Eyed Peas’ first couple of albums). Usually, a pivot is in order. Band members are fired by venture capital investors (big labels), lengthy legal contracts are signed and the band’s focus goes from pleasing customers one by one to making as much money as possible.

This leads to discord among the co-founders, which means that most bands don’t make it past this stage of the venture. I’m not sure of the stats, but I’d bet that the same ratio of startups make it to scale with venture money as bands make it through the process of signing a record deal.

Labels and venture capitalists

Venture capitalists usually only write cheques to startups that have been introduced to them by people they trust. Similarly, labels usually sign musicians that have come through one of their existing networks. For musicians, that means heading out to shows, handing out business cards and buying people drinks. Sound familiar?

In our growing economy, entrepreneurs are usually assumed to be working in the high-tech industry. The reality is that entrepreneurial skills are crucial in any profession where you are trying to stand out from thousands of others, all of whom have the same dream as you: to make it big.

What is a culture of innovation? In the process of drafting my PhD dissertation, I posed this question to members of Ontario’s research and innovation ecosystem. While some found the phrase overused or empty, many shared their experience in the innovation process.

Based on my interviews, I’ve arrived at the following definition.

• A culture of innovation is an environment that supports creative thinking and advances efforts to extract economic and social value from knowledge, and, in doing so, generates new or improved products, services or processes.
• A healthy culture of innovation has a shared set of values and mutually reinforcing beliefs about the importance of innovation as well as an integrated pattern of behaviour that supports research and innovation.
• A thriving culture of innovation can leverage the existing strengths of a given research and innovation ecosystem.

Ontario’s culture of innovation

From 2003 to 2011, Ontario made notable strides toward developing a culture of innovation. Intermediary organizations like MaRS and the Ontario Centres of Excellence were set up to provide local entrepreneurs with support to advance their innovative ideas and ventures.

Ontario’s research institutes, hospitals, colleges and universities ramped up efforts at partnering with intermediary organizations, local businesses and international firms to cultivate research in key areas. The province’s angel network and venture capital community engaged with industry partners and intermediary organizations to invest where early-stage funding was (and remains) critical.

The provincial government’s efforts at implementing a culture of innovation has been demonstrated in a range of strategies, including Ideas to Market Strategy, 2006; Strategic Plan, 2006; and Life Sciences Commercialization Strategy, 2010. It has established funding programs such as the Ontario Research Fund, Premier’s Awards and the Innovation Demonstration Fund. Institutional structures such as the Ontario Network of Excellence (ONE) were designed to promote these goals. (The ONE supports entrepreneurial activity, encourages collaboration between research and innovation partners, enhances regional competitiveness, increases productivity and fosters job creation.)

What’s missing in Ontario?

But here’s what’s missing in Ontario: the qualitative tools necessary to evaluate our success in actually establishing a culture of innovation. Without these measures, how will Ontario identify the full range of its shortcomings, learn from past mistakes and truly build on its strengths?

Stay tuned for the next blog in my series to read about the advancements that I think are imperative for achieving a robust research and innovation ecosystem in this province.

A call to the school’s chief executive, Alastair Wilson, ensued, and our engagement with the SSE soon began.

While visiting a series of best practice initiatives in the UK, a quick visit to the school (which was then co-located with The Young Foundation in London’s Bethnal Green community) to see the program in action led us to believe that the SSE was on to something. The school’s action-learning approach offered a unique program design to support social entrepreneurs, particularly those from marginalized communities.

As it does with many great initiatives in this province, the Ontario Trillium Foundation agreed to fund a feasibility study to see if the SSE program would, in fact, be applicable to Ontario. With this funding, MaRS hired MASS LBP to conduct a province-wide study. The results clearly indicated that, although we would need to “Canadianize” certain components of the SSE program, we should definitely explore the opportunity further.

A consortium was formed and further funding was secured from the Ontario Trillium Foundation to hire staff and launch the first cohort of the School for Social Entrepreneurs Ontario (SSEO). The school remains a SiG@MaRS client to this day, and we are proud to serve on its advisory board.

With the first SSEO cohort ready to graduate, I recently had the chance—with a few other experienced colleagues in the social impact sector—to meet with many of the students and to offer advice on their ventures and their prospects of achieving both economic and social impact. I would like to highlight a few of these ventures here.

• Just Access is a “crowdfunding for justice” venture that is designed to find a novel way of increasing access to justice—and offering new opportunities for civic engagement and social empowerment—by facilitating crowdfunding to legal cases. This was one of the most polished of the SSEO pitches. With a strong team of professionals and a strong network of advisors, this group is well placed to use the power of the crowd to tackle the discrepancies in access to justice.
• Gashanti Unity is made up of a group of young Somali women in Toronto whose mission is to provide girls and young women with a safe atmosphere to develop their gifts, abilities and positive relationships. One of their many accomplishments is their ability to capture weddings by training young women to act as videographers and disc jockeys. The group’s work in mobilizing support from not only the women, but also the men of their community has been nothing short of inspiring. This is a group of young women to watch.
• The final venture is called Peopleshare and it is an innovative staffing service for non-profit organizations and small businesses that cannot hire all of the people they need. The venture’s founder is seeking a cure for the “many-hats syndrome” of many people who work in the not-for-profit sector. She not only wants to provide interim staffing support, but she also wants to change the ways that the not-for-profit sector uses limited resources to achieve even greater impact.

However, the ventures are secondary to the real success of the SSEO program. The program works with people who often have had challenging life experiences and helps them try to understand those experiences, learn from them and share their newfound perspective with others.

I was moved to tears more than once while listening to the students’ stories, their desire to help others and their motivation to understand their journey and to think about new and innovative ways to impact the lives of others who are faced with similar life challenges.

The approach used by the SSE helps the participants to not only create businesses, but also to find themselves as they attempt to find ways to make money and make an impact. As we well know, ventures come and go, and creating a venture with a double bottom line is not an easy thing to do. But if you can learn about yourself through the process and reach out to others to walk with you, then it seems as though it just might be worth the effort.

The call for concepts was launched in November at the Social Finance Forum organized by the MaRS Centre for Impact Investing. It is noteworthy that in less than three months (including the Christmas break), a host of individuals and organizations marshalled their energies toward putting forward proposals that would use social finance methods.

The results demonstrate that Canadians across the country are thinking about how to apply innovative financing methods and partner across multiple sectors in order to revitalize traditional ways of funding and delivering public services.

More than half of the self-identified respondents were based in Ontario alone, and over three-quarters of them were from the non-profit or charitable sector. This makes it clear that more work needs to be done to support broader engagement with social finance.

There was also recognition that many of the challenges we face today are interconnected and deeply complex. Of the 154 proposals submitted, no one issue area stood out as a priority; rather, a third of all proposals incorporated multiple issues. The community identified youth, health, Aboriginal Peoples, housing and homelessness as particularly important issue areas.

There has been significant coverage and commentary regarding the report since it was published. Much of the conversation has focused around the idea of getting the private sector involved in delivering social services, and more still on a specific social finance instrument, the social impact bond. Adam Jagelewski of the MaRS Centre for Impact Investing was part of a conversation on a recent segment of “Power and Politics” on CBC as well, discussing the concept. Watch the segment here, beginning at the 1:20:35 mark.

Examples of social finance ideas

While the social impact bond model is indeed a very interesting one, it is only one of the instruments that were referenced in the ideas proposed by Canadians. Here are some examples of other social finance ideas (see the full list here).

• Housing funds (Habitat for Humanity Toronto)
• A network of social innovation hubs (David Phipps)
• Targeted rent supplements (Mental Health Commission of Canada)
• Impact infrastructure exchange (Tessa Hebb)
• Social performance derivative (Sean Geobey)
• Independent living account program (Social and Enterprise Development Innovations)
• Business accelerator for social entrepreneurship (PARO Centre for Women’s Enterprise)

These ideas truly convey the breadth of approaches that social finance encompasses. The discourse around social finance is not limited solely to impact investing or social impact bonds.

The real story of the report released by Human Resources and Skills Development Canada is that Canada is witnessing a larger cultural shift to the idea that no one single sector can provide the solutions that are required, and that it is quickly emerging as one of the global leaders in impact investing.

According to Brian, crowdfunding can be defined as “an event that harnesses networks for funds, awareness and feedback.” Historically, crowdfunding can be seen as part of a long-term trend of “democratizing innovation,” as described by Eric Von Hippel in his 2005 book by the same name. In the world of funding, crowdfunding fits somewhere in between “The Long Tail” as described by Chris Anderson in 2004 and microfinance as done by Grameen Bank and Kiva.

The Pebble effect

Considering that current security regulations prevent equity from being raised through crowdfunding events in Canada and the United States, what exactly is the appeal of crowdfunding to the current class of entrepreneurs?

One word describes it all: Pebble.

When Pebble Technology was unable to raise venture capital funding to develop and market their smartwatch, they decided to run a pre-sales campaign on a crowdfunding platform in an attempt to obtain orders totalling $100,000 so that they could begin production. The campaign launched in April 2012 and reached its initial funding target within days. When the campaign wrapped up, 68,928 buyers had placed orders for a total value of $10,266,844—more than 100 times the initial funding target.

As other entrepreneurs struggle to raise risk capital from traditional sources, such as angel and venture capital investors, the Pebble campaign has shown that pre-sales through a crowdfunding platform can be a very attractive alternative to raising the capital required to get commercial operations started. After all, Pebble’s founder raised more money than he was looking for and did so without having his ownership share watered down.

Is crowdfunding for you?

In his talk, Brian presented some statistics that should cause people to think twice before launching a crowdfunding campaign.

• A typical crowdfunding campaign attracts between 50 to 500 funders.
• On average, each transaction is $75.
• On average, overall campaign revenue ranges from $3,750 to $37,500.

In other words, the typical crowdfunding campaign is very different from the Pebble campaign. Lean startups that are hoping to use crowdfunding as a way to validate their solutions and business models should ask a few critical questions to determine whether crowdfunding is, in fact, the right way to go.

• Deal size: If the average transaction is $75, does that fit with what you are offering? What kind of goods and incentives can you put together to entice people to place an order?
• Network size: Do you have enough potential customers in your network? Do you have well-connected “evangelists” in your network who can take your campaign to their own networks so that you can break outside the typical 50 to 500 backers if required?
• Project type/quality: Does your project grab people emotionally? Do you have an eager fan group like the cult TV show “Veronica Mars” had? (Over 91,000 backers contributed $5.7 million to fund the making of a “Veronica Mars” movie.) Does your project have a feel-good factor that travels well through social networking sites?
• Risks: Do you know enough about your product and the timelines and costs involved in developing and manufacturing the volumes you are seeking so that you can get the price right and manage the expectations of the backers?

If your responses to these questions are positive, Brian offered further advice in the form of a project checklist to make sure that you’re truly ready for a crowdfunding campaign.

• Does your project have a catchy title?
• Has a financial goal been established?
• Has a time frame for reaching the financial goal been set?
• Do you have quality photos of the goods/incentives?
• Do you have a two- to three-minute-long video that promotes your project in an authentic manner?
• Do you have audio that echoes the video storyline?
• Do you have a written description of your venture?
• Have you calibrated the rewards that you will offer potential backers?

This checklist alone does not ensure success. Once a crowdfunding campaign is launched you need to have a game plan in order to engage with potential backers, to get your first “wins,” to build and maintain energy in the campaign and to communicate actively with potential backers throughout the campaign.

Crowdfunding for lean startups

While lean startups may plan to use crowdfunding as a way of validating their solution and business model, they must resist the temptation to jump in too early in the customer development process. Crowdfunding should not be considered until some fundamental pieces are in place.

• First, the customer problem must have been validated. Without the insights generated from validating the customer problem properly, there are too many unknowns to run an effective crowdfunding campaign.
• Second, a minimum viable product solution must have been designed and priced properly, a process that may involve negotiating with suppliers. Some successful crowdfunders have encountered supply chain issues when their campaigns finished, leading to delivery problems, unhappy customers and bad publicity.

Only when these two points have been resolved would we recommend that a startup consider a crowdfunding campaign.

Watch this space

Meanwhile, we are waiting for both Canadian and American regulators to move forward with new market rules that will allow crowdfunding platforms to facilitate the raising of equity and debt for startups and projects. The United States Securities and Exchange Commission was supposed to issue new rules earlier this year, but the new rules have been delayed and are not yet known. The Ontario Securities Commission has engaged in a consultation process, but has not yet issued new rules or a timeline for when such rules should be expected.

For more information about crowdfunding and the potential crowdfunding exemption being considered by the Ontario Securities Commission, see the following resources:

• Crowdfunding: Is it right for your startup? (part 1)
• Crowdfunding: Have your say on possible changes in Ontario legislation (part 2)
• MaRS’ response to the potential crowdfunding exemption

Check out this five-minute “Hot Tips for Startups” video:

Check out Brian Meece’s full presentation here.

On May 15, 2013, nine finalists will compete in the eighth annual Up-Start! Competition for a chance win $10,000 along with a pitch video production package from MaRS Media with a retail value of $4,000.

Under the mentorship of MaRS volunteer advisors, the finalists have spent the last few months working hard to prepare their pitch presentations. Individuals or teams will give a 10-minute presentation on a business idea in the following categories: IT, communications and entertainment (ICE), cleantech, social venture and life sciences.  Competitors are expected to apply concepts from the course to make a compelling case.

Watch this quick video to learn more about the competition and hear from last year’s winner, LIFEbike:

Meet this year’s finalists

Luevo (@luevofashion)
Luevo, a tech startup based in Toronto, is launching the first crowdfunding platform targeted at aspiring and emerging fashion designers. A blend of crowdfunding and traditional e-commerce, Luevo’s platform will help fashion designers receive pre-orders from customers and help raise the funds needed for production.

Heal.X Innovation (@healxinnovation)
Heal.X Innovation is a revolutionary immobilization system for bone fractures and sports injuries. It provides better support than a traditional cast while reducing the side effects and the costs for the patient and the healthcare system.

Telewella (@telewella)
Telewella helps consumers to socialize by voice. The company enables businesses to capitalize on the popularity of their brand and to deliver their ads directly to related interest groups. Use the power of social networks to drive your revenue!

Matalo Productions Inc. (@myhandylittle)
Matalo Productions Inc. is developing personal health recording systems to help women who are health-conscious but lack the tools to properly manage their health and wellness. Matalo plans to launch an introductory app to accompany the release of their book, My Handy Little Health Journal, in the fall of 2013. Women will have better health at their fingertips.

Find My Itin (@findmyitin)
Designed to empower the do-it-yourself traveller, Find My Itin inspires, creates and shares trip itineraries. This web platform helps you save time planning your trip and leverages others’ experiences.

TrendyMED Inc. (@RonnyBarrelli)
TrendyMED has invented the MobileIV™ infusion device. This small and lightweight product delivers intravenous (IV) infusion liquids to patients from any size bag and does not need gravity or poles. No power source is required (not even batteries), and the MobileIV™ can be mobilized safely and easily anywhere, any time and in any position. MobileIV™ costs a fraction of traditional devices, yet offers much greater value to both patients and healthcare providers.

The Social Art Movement (@artismovement)
Helping starving artists connect with art lovers worldwide, The Social Art Movement is developing online and mobile tools to help independent artists take their minds off of the business of being an artist, and to focus on what really matters―being creative. The platform will brand and market artists by leveraging the art community’s ever-growing online presence.

Coverpitch
Coverpitch is an app that helps unemployed and underemployed graduates amplify their cover letter. It creates a digital mosaic of micro-videos to get them noticed and land interviews. The solution gives job seekers a platform to SHOW and TELL prospective employers who they are and why they are the best person for the job―in ways a traditional cover letter and resume cannot.

Sployment Inc. (@sployment)
Sployment is an employment suite that connects students with local employers. It enables them to find co-op, internship or part-time positions based on their availability and interests. It offers services through mobile and online applications, including S-Journal, S-Mentor and S-Connect.

Meet this year’s judges

• Peter Evans, founder and CEO, Speakerfile
• William Brown, managing director, BCW Ventures
• Sonia Sanhueza, practice lead, Life Sciences & Healthcare, MaRS
• Rob Scully, Investment Manager, Investment Accelerator Fund (IAF)

Past winners

See what our past winners have been up to: LIFEbike, The Hot Plate and Eve Medical.

To see the pitches in person, register here.

In his talk, Peter reminded us that pitching is about seeking other people’s money—going beyond you and your family and friends. This new level of investment creates a whole new dynamic. For many investors, investing is a numbers game, and their shields go up as a defence mechanism because they can’t say yes to everything.

Entrepreneurs need a “Yes.” Investors need creative ventures that have great potential in the market. They want to be excited by an entrepreneur’s passion and credibility.

Getting a “Yes” requires three levels of engagement: emotional, rational and financial. In your pitch, it’s important to connect on each of these levels. Involve your investors and put them in the picture as partners.

Peter explained that investors understand the power of teams and want to be part of good ones. Teams pivot better and faster, they can overcome market challenges and they can navigate better to keep lean startups moving forward. A team’s composition is very important to potential investors.

Building a 4H team

When it comes to building a team, Peter recommended building a “4H” team:

• Hackers at the code level
• Hipsters—that is, design thinkers, such as product managers
• Hustlers or visionaries who can sell the deal
• Helpers, such as good advisors and mentors

You are pitching an executive summary. You are laying out the components of your venture for potential investors to consider so that they can make the best decision for their involvement, time, expertise and funds.

Four components of a good pitch

Peter shared the four components of a good pitch:

1. A real problem: You want to solve a real pain point for a market that wants to pay.
2. An attractive market: There should be lots of room in the market to scale a business.
3. A unique advantage: This might be the team or the patent.
4. A compelling investment: You should have key metrics that explain the bottom line for investors.

Peter also cautioned entrepreneurs against pitching the “Google Earth” model of their venture. Don’t take your investors right down to “street view.” Instead, show them what planet you are on, what category you are in,  where you are playing and who is adjacent, and take the investor through a day in the life of your venture.

The point of the pitch is to connect. Show potential investors your passion and make them excited about joining you (emotional engagement). Reassure them that your venture has a market, that it is credible and that you have a great track record (rational engagement). And then present very good numbers (financial engagement). If you show them that your venture is just what they have been looking for you may just get a “Yes.”

Produced by MaRS Media.

Join us this week for the Up-Start! competition

Join us on May 15, 2013, for the annual Entrepreneurship 101 Up-Start! Competition where our nine finalists will pitch their business ideas to a panel of judges for a chance to win $10,000, along with a pitch video production package from MaRS Media with a retail value of $4,000. Click here for more information.

The Entrepreneurship 101 series will begin again in September 2013. In the meantime, catch up on previous lecture videos here.

Resources from the Entrepreneur’s Toolkit

• Article: How to identify an investor for your business
• Article: Elements of a pitch deck
• Article: Elevator pitch
• Workbook: Financing Workbook 4: Developing and Delivering a Winning Investor Presentation
• Video: Raising Money from VCs
• Video: Terms of Investments

Want to connect?

• Join the LinkedIn Group.
• Follow the conversation on Twitter: #ent101.
• Get updates on Vimeo.
• Download the course schedule.