December 30, 2013⬢
We started Full Stack in December of 2012. We moved into our office on February 1st, 2013. Year One was an experiment: how can we help early stage startups succeed through a mix of tools, talent, and capital? We've made some progress in learning some answers to that question, and have also uncovered a host of new questions. We've grown the community of entrepreneurs that we work with, and we'll keep looking to them to see how Full Stack can help and what we should focus on. Here's some of the things we worked on in 2013, and what our plans are for 2014.
At the beginning of the year, we were experimenting with the phrase “napkin capital”. Early stage capital for founders that we liked having dinner with. This isn’t exactly an industry term, and looking back, we’re probably more like a micro-VC than a classic angel. Not that micro-VC is well-defined term, either.
By the numbers, here’s what our capital investments looked like in 2013:
We met with many teams that we didn’t invest in. Many were too early, some were too late, and others we just didn’t feel a fit with. We are looking for founders that we can connect with and that we think we can help beyond just writing a check.
In 2014, we’re going to look for more investors we can work with regularly, both at at early-stage as co-investors, and as later stage, upstream sources of funding. We want to turn on syndication in Canada, both as a concept and as a set of best practices and deal docs.
We’re going to get more heavily involved in product development. This will mean some in house experiments with product development that may get spun out into a company, or stronger partnership / co-founding relationships like we’ve done with CommandWear.
##Office hours We hosted over 100 office hours in 2013. Office hours were a great way to have first meetings with people & companies without having to manually find a time to meet. On the other hand, proper follow up on our part to send links and make intros also took a lot of time. Often times we wouldn’t hear back from people we met with. The very best meetings were those where someone booked a follow up meeting months later, and had progress to share. > You were the kick in the ass we needed, the turning point - a great dose of reality. Again, THANK YOU!
In 2014, we’ll be looking for ways to scale office hours. Many of the topics covered are variants of education and feedback that could be better delivered in a group setting. Whether the answer is small, curated group events or open meetups (e.g. a regular Lean Canvas sharing & peer feedback session), we’re determined to get out of one-on-one mode. We’re going to look at helping founder peers connect with each other and keep on track in the Build-Measure-Learn cycle.
As well, we’ve already had interest from a number of friendly advisors that would be happy to have some office hours of their own. Follow our Ohours group to see new hosts being added.
##Events & Travel
We helped organize, sponsor, or otherwise participate in a number of events in Vancouver. The community events we helped organized were done through Pixel Crafters.
We set aside a budget of $6,000 to sponsor events. Roughly, our approach was to allocate $500 per event that we sponsored, meaning we could help about 12 events per year. We also didn’t do any repeats of the same event or meetup, trying to spread out the types of things we could sponsor.
Major events we attended elsewhere included demo days (TechStars Chicago and The Brandery in Cincinnati), the Evernote Conference in San Francisco, and Web Summit in Dublin, Ireland.
Right at the end of the year, Boris went out to Winnipeg to meet the local startup community there, hosted by the Ramp Up Manitoba team. We found a great community, shared some thoughts on Founding & Funding in Canada, and were happily surprised at the great community there.
In 2014, our travel & events are going to be about the same. Demo Days aren’t probably the best time to be visiting, so we’ll look to visit during accelerator programs, rather than at the end. We want to get out and on the ground to more startup communities directly. We’ll be pickier about events we help organize.
Bijan Sabet of Spark Capital talked about paying their own legal and we thought it was a great idea to support our approach of being aligned with founders. It is a little easier in the US, where there is a longer history of VC / angel investing, and the industry has moved to fairly standard deal documents for both term sheets and full subscription agreements. For background on this issue, see this Venture Hacks article from December 2007, which says yes, you should pay your investors’ legal fees..
This was a failed experiment. The issues were that we lead a lot of deals and picked up the tab for all investors involved, and without a cap or templates, fees were high for the amount we were investing.
The underlying issue in Canada is the lack of common deal terms and docs. This is in part an education issue (for both founders and funders). We found ourselves explaining deal terms and philosophy not just to first-time founders, but also to other investors.
By the time we made it to the end of the year, we found that just having two templates – one for convertible notes, one for equity / common deals – was the best way to go. We negotiate the terms (valuation, cap, discount, etc.), but keep everything else the same.
In 2014, we’re going to stick to these two templates, we’re going to share them publicly, and we’re going to kick off a broader discussion on the deal docs for early-stage financing in Canada. If you’re interested, we’re going to be holding a session with our lawyers, Lawson Lundell, to dive into these topics. Sign up for Event Invitations to be notified when we put this on »
##Shared Office Space
At the beginning of the year, we knew we needed office space. There were a couple of people around that were looking for office space as well, so we did the work to look for a space that we could share. After looking at a number of places that needed ~3+ months of work, never mind having to wrangle contractors, we found a great space that was move-in ready.
That shared space, on the edge of Gastown on Cordova at Carrall, became known as StackHaus. It’s been great to build a space filled with entrepreneurs working on great products, to fire up the BBQ & cook together, and to show off the view.
The negative side of having a shared office space is that people keep thinking we’re an accelerator of some kind. Yes, some of the companies we invest in are also tenants, but just having a fun shared office doesn’t make us an accelerator.
As well, we’re not a co-working space: we didn’t want to get into renting out desks to invidividuals, just product companies. Each company typically has about 3 people working with them. We’ve had various arrangements for people to hang out in the space, and we generally have an open door policy for out-of-towners.
In 2014, we’re experimenting with listing StackHaus on ShareDesk. ShareDesk itself is a Vancouver-based startup, although they have shared office spaces listed all over the world. We know we’re going to have some more alumni moving on to their own office spaces, so a group pod will be available.
We aren’t aiming to be competitive with coworking spaces – check out Launch Academy, The Hive, The Network Hub, or The Cranium if you need desk space or meeting rooms. But we’ll experiment with new faces and new ways of having people use the office.
This was clearly a failed experiment. This newsletter edition is only the 5th email we’ve sent. We got good feedback on the content of the newsletter, but simply didn’t have the time to stick with it.
In 2014, we’re going to try a couple of different newsletter formats plus some new tools to help curate content.
In 2014, we’ll continue to add to the tools section as and when we have useful templates to share. A user model template and a framework for asking great qualitative user research questions are both high on our list. A self-serve early stage marketing guide would also be useful, something we might work on with our friends at Capulet.
We’ll also be adding a Talent section to the website. We’ve had great service from a number of different people in town, from lawyers to commercial real estate agents. We’ll be listing them publicly so you can see the service providers we recommend in Vancouver.
##Family Values We kind of skimmed over what our approach is for finding people to work with in the napkin capital section. The tag line of “talent + tools + capital” is the right order in how we think about the approach to building companies. It really is all about the people, first.
We can joke about “wanting to go to dinner with people”, but that’s not far off. It’s not a requirement to love cooking, but especially for StackHaus residents, wanting to sit down and spend time with your co-workers, and to break bread together, is a big component of our “family values”.
Another approach we have is “help first”. We’d love to make some advisor or customer introductions. We’re happy to give you feedback on your pitch, or your budget, or just sit and brainstorm ideas for moving your product forward. We’d love for your business to succeed - first. If we can assist with talent or tools, great. If circumstances make sense for us to help with capital as well - great.
If this sounds highly emotional, it’s because it is. We’re definitely exploring pattern recognition, and best practices, and data driven decision making. But we want to make room for gut, too.
How do you build a community, a culture, that has an added sense of caring? How does caring and aligned values lead to business success? Can we talk about business and love in a shared context?
We could all do with some strengthening of our EQ (emotional intelligence). We’ll continue to develop our family values in 2014, trying to evolve & improve what it means to be part of the Full Stack community.
##What else should we do?
We’re looking to improve, and want your suggestions. Pop a note in the contact form or hit us up on Twitter @FullStackDotCa. We’d love to hear what you think we should be getting better at or new things you think we should tackle in 2014.