Accelerating Innovation

Read time ~ 4 minutes

Todd Coupland , Amy Dyck - Jun 22, 2018

Why Go? 


Make something people want. In 2005, the American seed accelerator Y Combinator (YC) based in San Francisco started with this motto. Since then, YC has mentored, invested in and provided connections for 1,773 technology companies. The combined valuation of the YC companies is over $80 billion, including well-known names like DropBox, Stripe, Twitch, and Airbnb.


The founders pull of YC is understandably appealing and reached all the way to Ottawa, Canada. In 2015, a promising founder was accepted by YC out of hundreds of applicants and was ready to go. At the time, this person told his story to two local and successful technology entrepreneurs.  In response, they asked the promising founder the following question, "WHY GO"?  Ottawa has been the birthplace of global technology giants, and while those companies have changed over the years, the abilities and skills of their founders and teams are firmly embedded in the Ottawa Community. He was told that rather than leaving, he could gain more from staying and it was a better choice to learn locally, well beyond what YC could provide. And that is what he did. 


This founder’s story has yet to be written but the point was absolutely true. Ottawa has the well-deserved legacy and pool of talent from Blackberry, Mitel, Nortel, Newbridge Networks, Cognos and most recently Shopify. It also is the recent home to innovation outposts for Apple, Amazon, Microsoft, OpenText, Survey Monkey, IBM, and Google. In this blog, we discuss the founding of the Canadian seed accelerator L-Spark and its recent investor “Cottage Pitch Fest” competition for mentored companies and founders, which we attended.


Seeding Innovation At Y Combinator


“Y Combinator is the best program for creating top-end entrepreneurs that has ever existed.” - Marc Andreessen, General Partner, Andreessen Horowitz


YC operates on a model for funding early-stage startup technology companies. Twice a year, YC invests a small amount of money ($120K) in a large number of startups that are accepted into its program. In return, YC normally receives a small equity stake, typically around 7%.  


These startups move to Silicon Valley for three months, during which they work intensively with YC and its mentors to get the companies into the best possible shape, and this includes refined investor pitches. Each cycle ends in 'Demo Day',  when the startups present their companies to a selected and highly targeted audience.


Shopify Payments partner Stripe was founded at YC. Its founder, Patrick Collison, doubts Stripe would have worked out without YC. It helped Stripe with acquiring early customers, figuring out who to hire, and closing a deal with banks to raise money.


Seeding Innovation At L-Spark


Following the "why go" discussion, these two technology entrepreneurs saw a clear need in Canada and the idea for an in-Canada technology accelerator was born. In 2015, they founded L-Spark (LS) based in Ottawa, Canada with a goal of being the destination to help create the best enterprise SaaS companies. With the support of Wesley Clover, Chaired by Terry Matthews and in partnership with the National Research Council of Canada, LS was launched.


The LS story is similar to YC's. It accepts founders’ groups twice a year for its six-month program. LS technology mentor stars help the emerging founders validate ideas, and create a structure and business plan around that structure. This includes everything from defining the company’s value, optimal and repeatable sales cycles, a method for measurement, setting forecasts to help potential investors, setting a proper board of directors, finding and hiring the right team, and how to execute partnerships and to raise capital. 


Over the past three years, LS has worked with 36 companies who have raised $26 million.  Its mentors range from technology company founder and entrepreneur Terry Matthews to Shopify's Chief Platform Officer Harley Finkelstein to LS Executive Managing Director Leo Lax and many other experienced technology executives.    L-Spark Team, Mentors and Advisors


L-Spark's mission to foster Canada’s best enterprise SaaS companies is a worthy goal. The enterprise world continues to shift many complex technology needs into services and the cloud. It has led to investable and important cloud companies that are being rewarded.  The Bessemer Ventures Partners Cloud Index is up 38% in 2018 and ~600% since 2011. Its current value is $380 billion with 47 companies in the billion dollar club. Ottawa-based Shopify ranks number four with its value of ~$18 billion. This re-emphasizes the point that Ottawa has the global talent to help mentor and scale the best enterprise SaaS companies.   BVP Cloud Index and Billion Dollar Club List


Source:  Company reports and CIBC World Markets Inc.


L-Spark's Stars At The Cottage PitchFest


Like YC’s Demo Day, L-Spark hosts pitch events for its founders and their companies. Now in its fifth year, the Cottage PitchFest (also founded by Terry Matthews) was held last Friday in Gananoque, Ontario. 


We attended this year’s Cottage PitchFest, which was impressive. It brought together 10 LS enterprise SaaS-focused founders with ~200 interested people, many of which were investors. Each founder gave well refined 15-minute pitches on the problem their company was solving, its competitive edge, the market opportunity, financial success to date and plan for the future, the go to market plan, and ended with a specific investment ask that included a use of proceeds.  These pitches were the culmination of all the work done at LS, and it showed. We understand that out of 10 pitches, four companies are in advanced stages of closing their financing requests. 


As expected, there were some ideas and founders that were more compelling than others. Regardless, the overall message was that LS is well on its way of achieving its goal of helping create significant enterprise SaaS companies.


Several of the presenting companies had compelling solutions with SaaS recurring revenue goals of over $100 million within the next few years.  Currently, these companies are experiencing rapid month-on-month recurring revenue growth of 10%.  These are impressive stats. And as their business plans are executed, the founders and companies will be moving quickly into the view of a much broader audience. Below is the list of 10 companies that presented at this year's Cottage PitchFest. 



Source:  Source: L Spark




We expect L-Spark will soon be telling stories about its own billion dollar mentee companies. It's happened several times in and around Ottawa, and with the help of L-Spark, it will likely be happening again soon.  Our advice is to track the L-Spark cohort.

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Todd Coupland


Phone: (416) 956-6025

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Amy Dyck


Phone: (416) 594-7232