High growth in search of a high profile

By KRYSTLE CHOW
Published in the Ottawa Business Journal newspaper and website.
Sept. 24, 2007

Click here to view this article on OttawaBusinessJournal.com.

Diversity key trait among companies at OCRI’s 2007 venture summit

There’s going to be all kinds of green at this year’s Ottawa Venture Technology Summit – from the presenting “green tech” companies hoping to score some major investment from venture capitalists, to the greenbacks that will (hopefully) pour into local industry.

The three-day summit, which begins Tuesday and is organized by the Ottawa Centre for Research and Innovation, will see 16 local high-tech firms at various stages of maturity make brief pitches to potential investors and attempt to form new alliances in the tech sector.

But clean tech isn’t the only industry which will be making its presence known at the summit, says Ottawa Capital Network manager Dave Scollon.

“There’s a wider diversity in this year’s list of presenting companies; it used to be telecom only, but now there are companies from clean tech, Internet applications, and software,” says Mr. Scollon. “It’s the trend in Ottawa right now, which is coming off the heyday of telecom.”

He notes that while there are both very early-stage companies and more mature firms presenting at the event, most of the companies are clustered around the industry’s mid-stage “sweet spot.”

One of the more mature firms presenting at the event is Group IV Semiconductor, which makes energy-efficient lightbulbs using semiconductor technology.

Company CEO Stephen Naor says Group IV’s lightbulb is just as energy efficient as LEDs and compact fluorescent lightbulbs, but isn’t as expensive as the former and produces better-quality light than the latter, which makes the company’s value proposition “compelling.”

“We’ve been in permanent fundraising mode and talking across North America with all kinds of people who are knowledgeable about clean tech, and people are very encouraged by what we’re doing,” says Mr. Naor. “People are starting to understand the value of (clean tech) to the marketplace and genuinely want to do something to help the environment, and it’s even better if you can save money doing it.”

Mr. Naor, whose company closed a major round of financing at the end of June, says although the venture environment might seem tight at the moment, there is investment to be found for “the right company with a good management team.”

“I’m not saying it’s easy, and Ottawa-based companies should not restrict themselves to Ottawa but should look across the country and in the United States, especially at funding communities which are interested in their technology space,” he notes.

The main challenge, says Mr. Naor, is the amount of time needed for investors to learn about a new technology and to become interested in these fledgling markets. This makes it even more important for local companies to look for cash beyond the usual suspects.

Niraj Bhargava, who heads up “smart” thermostat maker Energate Inc., agrees with Mr. Naor that timing is a key issue in the process of securing funding.

Energate is also a presenter.

“We know there are investment opportunities for us and there is access to capital, but it’s a time-consuming process to access the fit and find the right partners,” says Mr. Bhargava. “It’s not an overnight process, and we need to be introduced to the right people and develop partnerships … (The OVTS) is an opportunity for us to further our relationships with investors and update people on where we’re at.”

He says Energate is on a “significant growth curve” and “well on its way to becoming a success story” with the help of its financing partners, which is why events such as the OVTS are so important for Ottawa companies.

Mr. Scollon adds that the summit’s broad focus on different types of companies and panel topics – including talks on exit strategies and starting a “garage” business – should also help address the varying needs of local firms and investors.

“It’s a broad mix of companies, and the only thing they have in common is their high growth potential,” he says. “(This year’s summit) really is about the disparity of the transactions.”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s