One big question always hung over Marcus Daniels as he helped early stage companies bridge the gap between a good product idea and a Canadian business success story.
“How do we actually unite the best founders, institutional investors and ecosystem partners across the country?” the managing director of Toronto’s Extreme Startups accelerator recalled.
The answer, he believes, rests in bringing together accelerators from two of Canada’s hottest tech centres.
On August 19, Vancouver’s GrowLab start-up accelerator officially merged with Extreme Startups, forming the Highline accelerator.
“Over the next decade, if you look at the talent we have, can we help 1,000 Canadian founders or 1,000 business that are (headquartered) in Canada create $10 billion in economic value? I certainly think we can,” Daniels said.
“As Canadians we’re happy to create nice businesses, but often we’re not looking to aggressively expand into global markets.”
About 90% of companies that went through accelerator programs at GrowLab and Extreme Startups ended up with funding from investors, according to Daniels.
He said one big reason for the merger is to make early stage companies in Canada even more lucrative to investors.
Investment capital is notably in shorter supply in Canada compared with regions like the Silicon Valley or Greater Seattle.
“We have great institutional investors in Canada. I think part of the challenge is the stage at where they invest,” Daniels said.
Highline is moving away from its predecessors’ focus on mentoring businesses still developing products at the conception stage. Instead, the new accelerator is looking at companies that are closer to having products ready to hit the market.
“The Canadian dollars from the institutional investors, that’s the sweet spot they would love to fund,” Daniels said.
The offices in Vancouver and Toronto will operate as separate campuses for Highline.
Meanwhile, Daniels said he expects start-ups still conceptualizing their products will be able to go through accelerator programs geared toward those stages. After that, he said there is the chance for those start-ups to get accepted into Highline’s accelerator program.
Part of the merger is being funded through the Business Development Bank of Canada (BDC), a Crown corporation dedicated to entrepreneurs.
BDC Capital had previously invested $5.7 million in 38 graduates from GrowLab and Extreme Startups. Early stage venture capital firm Relay Ventures is also backing Highline.
GrowLab previously offered entrepreneurs with a three-month mentorship program, office space, networking opportunities and up to $30,000 in funding.
Start-ups that go through Highline will be eligible for up to $200,000.
