Just a quick set-up with Kevin Talbot … we won’t be starting the conversation until 1 p.m. ET. In the meantime, feel free to send comments or questions, but they won’t show up right away.
by Christina Varga 12/11/2012 5:53:13 PM
Thanks for being with us today, Kevin.
by Christina Varga 12/11/2012 5:54:45 PM
Sorry about this. We are having a problem getting Kevin logged in and our expert is working on it right now. We'll have to start a few minutes late ...
by Christina Varga 12/11/2012 6:04:53 PM
Great to be here.
by Kevin Talbot 12/11/2012 6:08:19 PM
Ok, it looks like we're good to go. Hello, I’m an editor working on the Globe and Mail’s Canada Competes series. Joining us today is Kevin Talbot, who runs a venture capital firm focusing on mobile computing.
by Christina Varga 12/11/2012 6:10:07 PM
Kevin, for readers who are unfamiliar with your company, could you give us a quick idea of what your aims are.
by Christina Varga 12/11/2012 6:10:39 PM
Relay is an early stage venture capital firm with offices in Toronto and Menlo Park California that specializes in mobile software investments.
by Kevin Talbot 12/11/2012 6:11:26 PM
The biggest issue that we have seen is the dramatic cost reduction in starting a software company. With open source, free development tools, built-in distribution (eg app stores) and cloud services for hosting and processing) it takes a lot less capital to get a start-up into market....
by Kevin Talbot 12/11/2012 6:13:32 PM
Having said that, this lower bar means that many start-ups are bringing products to market but are not necessarily self-sustainable as "companies". So we do see many enthusiastic entrepreneurs that have "features" but not backable companies.
by Kevin Talbot 12/11/2012 6:15:17 PM
As for our specific criteria, not much has changed. We are still looking for talented people with domain expertise, addressing a burning need in the market. The market has to be large AND growing and we we want to see unfair competitive advantage.
by Kevin Talbot 12/11/2012 6:16:52 PM
So how do you assess what makes sense for your company to back?
by Christina Varga 12/11/2012 6:17:22 PM
We specialize in mobile software, so our filter is both narrow and broad at the outset. Narrow in that we have a specific definition of "mobile" yet broad because we believe mobile is such a fundamental paradigm shift in computing....
by Kevin Talbot 12/11/2012 6:18:40 PM
Within the mobile context we are early stage investors. We typically focus on the Series A which is the first "institutional" round of funding for a company. This follows the "seed" round where a company has gone from idea to proof of concept. We are best positioned (with our networks and expertise) to help a company begin to scale as they go to market....
by Kevin Talbot 12/11/2012 6:20:34 PM
Standout companies have a number of important ingredients (as I mentioned before). Experienced, talented team addressing a burning need in the marketplace (ideally that they have direct, first hand experience with). We expect the market to be large AND growing. Finally we look for "unfair" competitive advantage. In order for a company to meet our hurdle for a Series A we expect that their business model is: repeatable, scalable and predictable.
by Kevin Talbot 12/11/2012 6:23:37 PM
The job of the venture capitalist to find those game changing opportunities!
by Kevin Talbot 12/11/2012 6:25:17 PM
First, I don't spend a lot of time reading analyst reports. I like to spend my time with the entrepreneurs who are driving the trends and creating the opportunities that the analysts are writing about....
by Kevin Talbot 12/11/2012 6:27:12 PM
As for your second point, no, it is not too big to think of these forces at the seed stage. We have backed a number of seed stage companies that are tackling really big problems. If the problem isn't BIG then the opportunity (if you can address it) won't be that exciting.
by Kevin Talbot 12/11/2012 6:28:58 PM