Fundation – Foundational Funding and Incubation to Foster Innovation

What is Fundation
The Players
The Event
What we do the of the year
Why Fundation?
How does Fundation benefit?

Fundation is an organization that fosters innovation through collaboration between investors, service providers, experience providers, and entrepreneurs.
In a unique event hosted annually in Toronto Canada, this group of selected individuals participates in a choreographed pitch-and-play experience used to bring together micro organizations – startups — that will lead Canada and the world in innovation of all kinds.

Investors
A group of between 40 to 50 selected high to medium net worth individuals and corporate representatives that share a vision and passion for seeing Canadian innovation find its way to the top of world circles. Investors will typically commit to investing a minimum of fifteen thousand dollars of seed capital into at least one venture per year up to a maximum of one million dollars.

Incubators
A group of between 10 to 20 selected executives and industry professionals that have helped to build, grow, and sell companies from all walks of industry. These charismatic leaders act as expert references, connection specialists, watering holes, and Sherpas’s to ensure the success of the companies that are formed through Fundation.

Entrepreneurs
10 to 15 Visionaries from various sectors, including budding academic graduates. These entrepreneurs come together at Fundation to showcase and pitch their ideas and businesses. Each entrepreneurial group is screened and prepared for presenting a detailed overview of their ventures to the audience of incubators and investors. Entrepreneurial opportunities are generally selected for their fit into a 2 to 5 year ROI of between 8 to 10 times, and a clear exit strategy for investors on or before year 5.

Presented annually, Fundation is a gathering of like minded individuals looking to push Canadian talent into the spotlight and collegially see a strong return on investment, be that investment through sweat or funds. The event takes place at the Sutton Place hotel, in downtown Toronto, Canada, and includes a 2 to 3 hour luncheon event filled with presentations, expert panels, expert speakers, and a investment auction. Lunch is provided on the house to Fundation’s select guests, as is a warm and rewarding environment.
As the events highlight, the investment auction proceeds throughout the entire luncheon where entrepreneurs present their ventures to the audience. Towards the end of the luncheon, the auction allows investors and incubators the ability to hear expert panelists ask questions of the entrepreneurial presenters as well as ask questions of their own. Once most major queries are answered, the audience has the ability to show interest in one or more of the companies that have presented and side tables are later formed for a more intimate meeting between interested investors, incubators, and entrepreneurs. Should something come of the conversation, Fundation will help to foster offline meetings to push newly formed partnerships to the next level.
This style of group collaboration brings together in one afternoon what generally takes individuals and firms many months to organize. It allows interested parties of all resource types quickly see what industry experts and peers think of presented opportunities.
There is no other event like this in the world.

After the Fundation annual event. Fundation uses its resources to help move these newly formed companies forward. Fundation supplies professional services, including legal, accounting, technology, design, and many other necessary foundational services required to nurture the relationships required to pragmatically start, grow, and even sell these ventures.

Fundation was founded by a group of patriotic professionals with experience in startup and fortune 500 firms with the single goal of showing the world that Canadian innovation can be world class and that through open collaboration a fraternity of investors, incubators, and entrepreneurs can change the world.

Fundation exists as an organization that provides the framework for these start-ups, including professional services and operating premises as needed. As such, Fundation collects a small percentage of capital raised in exchange for at cost services, and does so for two reasons, one, to ensure a certain level of quality and consistency is provided to start-up ventures and second, to provide the much needed reality check for start-ups as capital is introduced and available. In addition to these services, Fundation will be allocated a small percentage of each start-up to ensure that it has skin in the game and its success is wholly aligned with each new start-ups.
Together we can build a better Canada, a better Life, and a better World.

Notes on Angel Investors / Seed Capital Returns
The University of New Hampshire’s Center for Venture Research recently conducted a study on angel investors who financed several software and early-stage high-tech companies in the New England area. Of the companies that were surveyed, it was reported that angel investors were seeking an average of a seven-in-seven return; that is, they required seven times their invested capital over an expected holding period of seven years. This renders an average expected return of 32%.
Not only did this approach demonstrate the tremendous amount of patience on the angel investors’ behalf (willingness to remain in a deal for seven years), but it also showed their rather modest ROI prospective (since many early/seed-stage investors actually earned on average a compound ROI of 65.5% over the last five years). When an entrepreneur puts into perspective the projected value of their company in five to seven years, the amount of equity that angel investors receive, and their return outcome, they must establish to angel investors that their company’s ROI is at least 30-40%.
Angels will simply not take the risk of financing a company if there is no indication of profitability and a strong opportunity for company growth. However, many angel investors are risky and will receive on average a strong multiple return on only 3/10 business ventures. All angel expectations vary for each individual, but they always share two very important numbers when investing: their desired ROI and the expected ROI.

The following table gives an idea of the kinds of returns that professional investors are looking for at various stages of company development:

In November 2007, Robert Wiltbank of Willamette University and Warren Boeker of the University of Washington conducted the largest study on financial returns of North American angel investors. As reported by the Ewing Marion Kauffman Foundation and the Angel capital Education Foundation, a total of 86 organized angel investor groups, including 538 individual angel group investors who experienced more than 1,130 exits participated in the study. Demographics of each individual angel investor and strategic factors, such as due diligence, industry experience, active participation in their company investment, and follow-on investing were studied. It was discovered that in more than half of the venture investments, some or all of the study participants’ investment capital was lost. Those organized angel groups who were more successful received an average of 27% on their internal rate of return, and in 3.5 years, produced 2.6 their invested capital.
Some factors which have contributed to the financial success of angel investors are:

1. Timely due diligence- When angels practiced more due diligence, they received more profitable returns
2. Industry expertise- Angel investors with more industry experience nearly doubled their returns.
3. Active participation- Through active venture involvement, including entrepreneur mentoring, coaching and financial monitoring, angel companies received more returns.
4. Follow-on investing- More lucrative returns resulted when angels avoided follow-on investing.