BY HADEEL IBRAHIM
Ross Finlay is co-founder of First Angel Network of Atlantic Canada, an arm’s-length investment firm with a particular interest in startups. “Arm’s length” means the investors do not get involved in the operation of companies, but benefit from their success.
Finlay says when he looks at a company as an investor, he’s looking at “what this is, and how will it provide a return on my investment?”
Similarly, he looks at a city or region and asks, “What makes this a good startup entrepreneurial ecosystem?” He has seven criteria that he uses to assess a city’s entrepreneurial ecosystem. This is how Fredericton holds up against the rest.
- Is there a market?
Finlay says he looks at domestic and international potential, and because communication has become virtually borderless, Fredericton is on even playing ground with elsewhere in the world.
“Opportunities are global, so you wouldn’t just look at ‘is Fredericton a big market for entrepreneurs?’ or ‘is Fredericton a good market for an IT entrepreneur or a medical device entrepreneur?’ It’s as good as any other.”
The only setback in this category is “the amount of cash that’s available in the Fredericton area to help that company go global.” (More on that later.)
- Is the culture supportive?
Finlay asks are the people with money risk tolerant? Are they well-enthused to support entrepreneurs?
Finlay says there may not be enough risk-tolerant investors in Fredericton, but there is a startup culture and the community is thriving.
- Does it have a good education and training culture?
For example, is there a strong university presence?
Finlay says yes, especially considering the University of New Brunswick’s entrepreneurial presence and its successful Technology Management in Entrepreneurship program.
“If you look at UNB they have a very strong entrepreneurial culture and they’re working to make it stronger. UNB was selected as the most entrepreneurial university in Canada,” Finlay says. “They’re well respected all across the country and people are modelling programs on the [TME program].”
- Does it have a good regulatory framework and a good infrastructure?
Is there access to transportation? Are there tax incentives?
Finaly says, “New Brunswick has the richest equity tax credit in all of Canada.”
As for infrastructure and transportation, “that’s a matter of opinion. Halifax having the hub airport has a little bit better access to transportation, but nobody can get here from anywhere else without taking less than two flights. So that’s a challenge.”
- Is there managerial and technical talent?
Are there other entrepreneurs that have been through the start up experience and are doing it again?
“I think Fredericton is a good example of that. The people that were at Radian6, a great many of them are involved in startups again, trying to make them go, so that’s very positive.”
- Is there funding?
Finlay says this is where New Brunswick, and Atlantic Canada, are docked the most points.
“The piece that’s always a challenge anywhere in Atlantic Canada is the funding, and financing these things. Are there a lot of angel investors in Atlantic Canada? Not a lot, we have two million people in all of Atlantic Canada so it’s not a large circle of wealthy people that would invest. You’ve got wealthy people, but are they willing to risk that wealth on startups? And we do not have a lot of venture capital, we have some but it’s not nearly as much as we require.”
- Are there support mechanisms?
“We do have a very large startup community. We have Planet Hatch, we have their equivalent in Halifax, the new one in PEI. Newfoundland has accelerators and incubators so there is a lot of support for early-stage companies. Advisors, mentors, professional services, do these entrepreneurs have access to a network of other entrepreneurs that they can get together Friday night, drink beer and solve problems?”
Planet Hatch has “startup drinks” events regularly, so that may just be a yes.
The First Angel Network is based in Halifax and have invested in companies such as Green Imaging Technologies Eigen Innovations Inc. in Fredericton.