When the L-Spark accelerator for enterprise software launched last September, it was looking for up to six companies that could be accelerated over a nine-month period to the point they’d be ready for Series-A investments.
“The underlying statement is ‘up to six,’” L-Spark managing director Leo Lax said in a recent interview with OBJ.
Mr. Lax said the Kanata-based accelerator set a very high bar, and as a result, only two companies – The Better Software Company and management software firm Frontlines – have been invited to take part in the first cohort of startups.
About 300 companies applied to join L-Spark’s accelerator program. Forty were shortlisted, and 12 took part in a pitchfest in late November, Mr. Lax said.
Mr. Lax said a number of startups were very close to making the final cut but were not quite ready due to a number of issues that concerned the selection committee, ranging from gaps in their management team to questions about whether they’d be able to meet revenue targets in nine months.
“So rather than meet the number requirement, because we have six spots … we took only as many companies as we think we can get them to where they need to be,” he said.
That doesn’t mean the unsuccessful companies aren’t “quite capable,” Mr. Lax said. They just might be more suitable for the L-Spark incubator, which will continue to accept applications until Feb. 27. The incubator is a four-month process aimed at getting startups ready for seed investment.
Mr. Lax said it was a “personal choice” to launch L-Spark with the accelerator instead of the incubator.
“I thought that taking later-stage companies and growing them to be Series-A ready would be a much better way of starting,” he said. “If we’re successful there, incubators and accelerators- targeting companies will flock to our facilities.”
He said it also gave L-Spark a chance to test its processes. So far, the testing has revealed positive results, which gives him confidence leading up to the incubator’s rollout.
“Companies we have in our accelerator now have already indicated to us that this is the best thing since sliced bread,” said Mr. Lax.
Steve Cody of The Better Software Company certainly backed up that assessment. L-Spark prides itself for its “hands-on” approach, and there is likely no better example than Mr. Cody.
The Better Software Company is his first foray into technology after starting about 15 businesses in Ottawa, including Cody Party, Cody Mobile and Monster Hallowe’en.
Mr. Cody developed his own software to better run his different companies. During negotiations to sell some of his businesses, he discovered it was his software that really grabbed people’s attention.
After his wife came across L-Spark on Twitter, Mr. Cody applied but received a rejection e-mail two days before the pitchfest.
He responded to the e-mail, suggesting the selection panel might have made a mistake, and got a meeting the next day with L-Spark’s Marco Janeczek.
Mr. Cody said that 15 minutes into the meeting, Mr. Janeczek told him, “You’re pitching tomorrow.”
When Mr. Cody told him he had never pitched before, he was introduced to Laurie Davis, founder of the Capital Angel Network and a former Nortel vice-president. Mr. Davis coached him for the next 24 hours, Mr. Cody went on to do his first pitch ever and about two hours later, he found himself in the accelerator.
Since then, Mr. Cody has been at L-Spark’s Legget Drive headquarters every day, working with industry experts toward the ultimate goal of Series-A funding.
“It’s huge. I’ve spent hours with Terry Matthews. He personally mentors me. That in itself is unbelievable,” said Mr. Cody.
Mr. Cody is also no longer a rookie at pitching.
“We presented to Google, Microsoft, we’re presenting to IBM, we’ve presented to VCs, they have VCs that they’re talking to in New York, Boston and (Silicon) Valley. It can’t get any better,” he said.
Mr. Cody said he believes he is on the verge of creating “something special, something huge and worldwide” with The Better Software Company.
“L-Spark just makes that a lot more tangible. You kind of feel like you can touch it,” he said.
Responses like this give Mr. Lax reason to believe L-Spark is on the right track. He said he thinks part of the reason the accelerator found only two suitable companies for its first cohort is that it is still relatively unknown.
“Four months ago, L-Spark was a non-existent entity, and here we are today,” he said. “I think with our brand, our capabilities, our values, it’s going to be recognized by the entrepreneurial community, we will have more and more applicants of higher and higher quality.”