Did you know that Panache Ventures has a foot on the Edmontonian ground? In March, we added on Dan Belostotsky as a venture partner to establish a presence in the city. I’ve had the pleasure of chatting with him about the startup ecosystem there and wanted to share the main takeaways from our conversation.
A few words on Dan: He’s the founder behind OTTO Capital, a boutique investment firm supporting tech companies with a focus on blockchain, and the founder of Honestdoor, a real estate technology company. He also co-founded Belonett Media Group, the largest private digital billboard company in Alberta (acq. in 2011), and later partnered with Cieslok Media (acq. in 2017) to lead their expansion into Alberta.
Q: So Dan, tell me why Edmonton is a great place to start a business, and why a founder should think about staying there?
Dan: Edmonton is growing and becoming a world-class city, honestly. I've done a lot of travelling and, while Edmonton may not have year-round golf or a short drive to the beach, it just might be the best place to start a business, maybe amongst the top places in the world. When a city is between 1M to 2M people, fast-growing, and in a first-world country, it seems to be a sweet spot. You have the opportunity to look at more mature markets to see what’s worked.
Q: What are the external challenges faced by startups in Alberta’s capital city?
Dan: In a larger city, there is, in fact, more VC presence and more angel investors who write bigger cheques. But I’d rather be here. The tech and business community is small enough that your company will be noticed and to ensure a homegrown success story. This community helps with their contacts, time and would genuinely feel remiss if they weren’t able to commit to investing in your venture.
Q: Does this make it harder to have access to funding?
Dan: It depends; it might be tricky everywhere. Nowadays you can invest in so much. You can participate in crowdsourced real estate projects, blockchain ICO’s, cannabis stocks, cryptocurrencies, you name it. It’s never really easy to grab attention from investors, but being part of a strong, close-knit community can definitely help.
Q: How can Alberta facilitate the attraction, integration and retention of international talent in Edmontonian startups?
Dan: In a recent Globe and Mail article titled “Goodbye Toronto, hello Winnipeg: Are Canada’s young giving up their big city dreams?”, it highlighted how people between 18 and 34 years old are leaving or seriously considering moving from cities such as Toronto and Vancouver. In Edmonton, you have affordable rent and can purchase a better apartment or house than in almost all other major cities. Plus, we have the Oilers and Connor McDavid! The University of Alberta is also recognized as one of the best universities in the country and even internationally with one of the top AI research centres in the world. We can definitely promote all of that.
Q: You think Edmonton should promote itself as a startup hub?
Dan: Yes, and I think if Edmonton could attract a high profile accelerator, it could definitely boost its status, increase its exposure and have a higher startup success rate. It would help companies scale faster so that we can continue to make our mark on becoming a renowned startup hub.
Q: For a city to become a startup hub, it needs resources and services that benefit entrepreneurs. Who are the major stakeholders and the useful resources that founders should know about, like support programs, main events, university program, great initiatives?
Dan: Startup Edmonton connects you to spaces and members of the community. They can give you advice and they host many events and programs. A100 is an excellent group of entrepreneurs that are happy to meet and help Albertan companies at any stage. There is also non-dilutive funding with grants. Even our banks are becoming more open-minded with funding technology companies in the form of debt.
Q: What are the critical factors that affect or slow down the growth of the startup ecosystem in Edmonton?
Dan: We need talent, capital and culture. The talent comes from our people and our post-secondary institutions – which are already great and getting better. Capital comes from investments and job creation, achieved by creating an environment favouring startups. We need more culture and entertainment attracting the best people to stay in Edmonton.
Something critical that may slow down Edmonton’s startup ecosystem is if we don’t double down on University of Alberta's innovation and research hub for AI. It’s been doing great, but we need to be more supportive of it. Its programs could attract fantastic talent. We also need to keep electing the right mayor to help boost the city in encouraging development, supporting urban planning and funding more cultural initiatives.
Thank you, Dan!