Check out Pycap Venture Partners’ Podcast Episode on Startup Talk Toronto.
On this Episode, Pycap CEO Stuart Browne discusses blockchain technology, initial coin offerings and how it relates to venture capital financing for early-stage tech companies.
Stuart also covers common challenges entrepreneurs run into when growing their company and highlights the new Pycap – University of Toronto Course that addresses these issues.
The Podcast Episode transcript can be found below…
The Startup Coach: It’s the Startup coach here. And today I’m here with Stuart Browne C.E.O. of Pycap venture partners It’s great to have you here Stuart.
Stuart Browne, CEO PyCap: Thanks Craig great to be here.
The Startup Coach: So tell me what is Pycap, venture partners?
Stuart Browne, CEO PyCap: Pycap, venture partners is a venture capital, that facilitates the raising of capital for early-stage companies.
The Startup Coach: So what is that entail?
Stuart Browne, CEO PyCap: That entails basically investing in companies directly through our venture capital fund. It also entails building up a company financials depending on the stage of a company is in. And providing Advisory services on how they can successfully raise capital from a number of sources, including of course V.C’s (Venture Capitalists), angel investors ICO’s, STO’s, angel groups, and government organizations.
The Startup Coach: And so what types of Startups do you work with?
Stuart Browne, CEO PyCap: We work with companies that are kind of in and around the early stage of course like the pre-series A stage. So they usually have what’s called a working prototype a proof of concept and some sort of market validation.
The Startup Coach: And what do you normally look for a market validation?
Stuart Browne, CEO PyCap: Well, I mean best case scenario market validation comes in the form of revenue. But that doesn’t necessarily have to be the case. Often time a company can prove has there’s a demand out there for the product or the service they are creating and that can come in the form of high-end customers using there Beta version of their platform, for example, if there is pre-sales through a crowdfunding platform. That is great indication of market validation. And I guess how many followers they have and that sort of thing.
The Startup Coach: Interesting, so traction in various forms?
Stuart Browne, CEO PyCap: That’s right!
The Startup Coach: So at this point having worked with lots of Startups what’s the main thing you see Startups struggle with?
Stuart Browne, CEO PyCap: Just raising capital, in general, is a huge challenge if I can elaborate on that. I feel
one of the major things holding companies back or preventing them from being able to successfully finance their business is generally having a fundamental understanding of who and what they are trying to raise capital from.I mean there is a lot of talk of VC’s (Venture Capitalists) and Angel’s and ICO’s and crowdfunding and all that sort of thing. But when you get right down to it and you speak with entrepreneurs, they maybe brilliant in terms of creating the technology for the product or service, they may really know the industry well that they are selling into. But they don’t necessarily know what motivates the investors that they are looking to raise capital from.
The Startup Coach: Interesting, so how did you get into this in the first place, who is Stuart before Pycap?
Stuart Browne, CEO PyCap: Stuart, before Pycap I was doing my MBA at the Schulich school of business. I was looking to get into investment banking, and I started to get involved with the world of Angel investing. And I learned a ton about early-stage tech companies, what to look for, what to avoid in terms of an investment opportunity despite the fact that a product might look good. And in the whole process of getting to know how to value deals and Startups and invest in them and get a return. I decided that there’s a huge opportunity to create a venture capital from like Pycap, and we just pursued it. And that’s what bought us here essentially.
The Startup Coach: So I’ve known you for a while now probably I think my notes have said over three years. I’m not sure… it’s greater than three years now anyway. And I know you’re being a mentor and a speaker, how did you start doing that?
Stuart Browne, CEO PyCap: Well there was a huge lack in the Startup tech community for individuals who intimately know the space of venture capital. VC’s are inherently private, hence the term private equity. They fall under the umbrella of private equity. So they have large amount of capital usually and they looked to deploy that into a much needing early-stage companies that are starving for capital. A lot of VC’s get bombarded with entrepreneurs pitching them for financing, and so there’s in a huge incentive for them to get there name out there, and become a public speaker. And educate entrepreneurs on what it is to be a VC. So when we were starting out, we were very opened to get on stage and work with entrepreneurs. I mean we see ourselves as entrepreneurs and helping them bridge that knowledge gap. It was a huge amount of value for the entrepreneurs we were speaking with and mentoring as well as the conferences and events that wanted someone with our experience to educate the audience basically.
The Startup Coach: Yeah, I’ve also seen you on judging on a number of pitch competitions not only several of our pitch competition here at TorontoStarts. But the CNE innovation garage and several or some… do you get a lot of leads that way?
Stuart Browne, CEO PyCap: Yeah, we get a ton of leads for sure. I mean we definitely do a quite a bit of judging of pitch competitions as you mention in Toronto. But we’ve also had the opportunity to judge pitch competitions in other countries as well. Including countries in Eastern Europe in Latin America throughout Asia and it’s an amazing opportunity for us. Because we may have companies were interested in getting involved with or adding to our portfolio. And then we might see a company doing the exact or the same thing in a different country through these pitch competitions that we might not have known about otherwise.
The Startup Coach: Great! I always think that they are a great source I always tell my Startups to pitch as many times as possible. In fact, I too have my recent Startup Launch graduates at Startupfest pitching this weekend they’re were sending me snaps and they did fairly well I don’t think they’ve won prices, but they are not quite there yet. So you now… have taken this teaching to the next level and you have run a course that you teach at U of T (University of Toronto) what’s that all about?
Stuart Browne, CEO PyCap: That’s right, I mean as mentioned given the demand that’s out there among entrepreneurs needing to learn you know as much as they can in order to successfully raise capital. We have embarked on this initiative with the University of Toronto to create this course called financing in an early-stage company. And as with the University of Toronto school of continuing studies. And our aim is to provide entrepreneurs with everything they need to know to get early-stage company financed. But as we’ve seen, I mean we’ve been doing this since the fall of twenty seventeen (2017), we’ve had students who come from a whole array of different backgrounds. Government organizations, individuals who are consultants helping out early-stage companies. We’ve had individuals come in from MaRSDD as well as retired, you know highly successful very wealthy individual, who are not just looking to raise capital for a Startup. But they are actually looking at like from a different perspective. So they wanna learn you know, how do VC’s value deals, how do they decide which companies to invest in. So they are actually there to learn how to make their own Startup tech investments which is interesting.
The Startup Coach: Very interesting, it’s interesting to see all the differences size of the market that shows up. When I run events I always think that the Startups or entrepreneurs for a lot of times for as many other sequences of the market there to look for clients or to learn more or to do all sorts of things. So interesting you mentioned ICO’s a couple times we went through this. ICO is obviously a new, initial coin offering, is a new funding source. How much do you cover in your course, and how much are you into Cryptocurrency?
Stuart Browne, CEO PyCap: We cover it, it’s a significant portion of the course and we teach that right towards the end. We dedicate an entire class to it and we’ve gotten into guess speakers who are heavily involved and are industry leaders in the world of Cryptocurrency currently we have one block chain company that’s involved into Cryptocurrencies, within our portfolio and we see a massive potential there for all kinds of opportunities. Not least of which are early-stage companies accessing capital to grow their business.
The Startup Coach: I’ve had five block chain companies go through my accelerator program Startup Launch and just talking to Sunil head of TechStars here in Toronto, couple a days ago he was telling me that their next cohort will be a strictly blockchain cohort which is very interesting. And as you know I run the Toronto Cryptocurrency Conference the seventh one is tomorrow actually. And just starting next week with The Cryptocurrency podcast, and probably what you don’t know is next month I am doing a live radio show starting on Blockchain Radio a weekly radio program. So I’m heavily invested in Cryptocurrency community space here. So we would like to talk a little bit more as we go down that road. But since we’ve been talking and in this space for a long time we… you and I decided that we need to educate more and more on Startups on how do we get in front of people, and how do we understanding financing more and more and we’ve been working with a lot of experts in the area. And I know you’ve designed a new course and a structure that we’re going to be putting together around our Toronto Mastermind Series. And you know it’s a… look like it’s a ten-week program, Its not 100% finalized. Because it’s going to cover creating a financial roadmap, understanding and creating a negotiating team, valuing Startups. How to value each Startup, structure a successful investor presentation building traction, building a winning team, you know working with VC’s, Lean Startup methodologies. Is my company VC fundable and how to create an ICO & STOs that’s a lot of stuff to cover? Is there enough time to cover all this information in 10 weeks?
Stuart Browne, CEO PyCap: Well in this space, I mean having been in the venture capital industry for about seven years now I have never really, have the problem of running out of things to talk about. Moreover, it’s more likely the case is that there is too much to talk about. Whereby you know my workshops and my classes, is usually run beyond the end-time with questions and follow-up, and even like bonus presentation that I always try to squeeze in. So yeah, there is a ton of material the students that have taken my courses have been quite happy with the results. And we’re happy to partner with TorontoStarts in order to facilitate more learning for entrepreneurs who need it.
The Startup Coach: And I think we share the same philosophy of having more value. I never like to go away feeling like I under delivered. So whenever I am running my programs, my workshops, my series are two or three hours long of content, content, content. And oh by the way here is share and here is the four manuals, and here are the templates, and here is all these other things here’s a ton of content. And I know that base on all the things that you have done and even in speaking and mentoring for TorontoStarts. And the Startup Launch program. There is so much to be learned in VC and in the financing area when it comes to Startups, I’m really excited about this program. Moving forward at the end of the notes I’ll put a link to the programs so you can take a look at it yourself. But moving forward having said all this, do you have any part in advice for Startups, that you see they commonly do or what they need to do to get right?
Stuart Browne, CEO PyCap: Yeah definitely, Startups need to…I mean there is so much advises it’s a tuff question just kind of summarized. But if I’m speaking from my specific background what entrepreneurs, really, really need to do. If they’re building a business that needs to raise capital in order to be successful.
It is critical that startups understand who they are pitching to and what motivates them.And how to go through that whole process, I mean understandable so a lot of companies get so focused and running their business and selling products and services to their customers and their market. But selling your equity to an investor is a completely different story. And they really need to intimately understand what’s going on in that realm before they embarked on that journey.
The Startup Coach: I couldn’t agree more. I think the relationship between investor Startup and entrepreneur is more like marriage than people understand. and they really need to take the time and consideration and need to know what they’re getting into. And so if people if people want to know more about you and Pycap how do they find it?
Stuart Browne, CEO PyCap: OK well, they could visit our website which is www.pycap.ca and if they are interested in learning more about the course we’ve teach at U. of. T or about our VC fund or any other of the initiatives they could contact us at info@Pycap.ca
The Startup Coach: And the info and the links will be in the short notes below, thank you very much for your time today Stuart.
Stuart Browne, CEO PyCap: Great, thanks Craig great to be here.
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