HN interview: Extreme Startups Sunil Sharma on accelerators, startups, and Toronto’s competitiveness
Funding is a huge deal for pretty much every entrepreneur these days – whether they choose to seek it out or not. Funding decisions are not to be taken lightly, as they often fundamentally dictate the nature of a startup’s operations.
Tech incubators and accelerators are programs that, in exchange for a token chunk of equity, typically provide startups/entrepreneurs with some amount of ‘seed’ funding, significant wisdom/guidance from experienced mentors, connectivity to deeper networks of potential clients/funders/partners, and support to help a fledgling company survive the often-gruelling journey to success.
Extreme Startups is one of the most respected of these accelerators and Sunil Sharma one of its main driving forces. HackerNest is proud to present our interview with the insanely-connected Sunil for your reading pleasure. Enjoy!
HackerNest: What’s your job description – what do you spend most of your time doing?
Sunil Sharma: I am the Managing Director and Chief Connector for Extreme Startups. My role is to manage the external-facing side of the accelerator – work with the broader technology and investment ecosystem for the benefit of the startup companies which we invest into. Examples of these stakeholders include outside investors (venture capital funds, angel investors, corporate funds), partner organizations, corporate sponsors, media and potentially even customers for the startups themselves.
HN: What did you do before joining Extreme Startups? What aspects of that experience would you say contributed most to your success in your current role?
SS: Immediately prior to co-founding Extreme Startups I was running the international mandate for the CVCA – Canada’s Venture Capital and Private Equity Association. I was working with Canadian VC and PE funds with their international programming – fundraising, syndications, and association-to-association collaborations. I was doing this as a member of Canada’s foreign service community (meaning I was a diplomat on secondment to the CVCA). As a diplomat I had the distinct pleasure of representing Canada abroad focusing mainly on advancing our commercial and trade interests in international markets. Most recently I served as Head of Consulate in San Diego, California. It was in California where I really developed a taste for technology investing and really got to see the opportunities in front of Canadian entrepreneurs.
HN: What do you like most about what you do?
SS: I really enjoy the relationships I have been building and the intersection of technology and investment. Fundamentally I enjoy connecting people and I guess the title i have of “Chief Connector” is a pretty good one come to think of it.
HN: Are there any types of business models/companies/verticals you absolutely refuse to invest in? How come?
SS: Well considering we are investing relatively modest funds (although a lot for a tech accelerator – more than any other technology accelerator anywhere that I am aware of), we tend to look for internet-inspired business models (e-commerce, social media, mobile, gaming, internet-of-things, etc). We are not really well position to do massive capital-intensive projects such as biotechnology or clean technology. We are also always looking out for investments for our own VC investors so we keep in close contact with them on the kind of things they are interested in.
HN: Without naming names (unless you really want to), what was your biggest mistake in making an investment?
SS: We have the fortune of being pretty young so there is still a lot of time for the mistakes to come to light, but I would say we miscalculated on the team dynamics of the startup entrepreneurs in at least one instance. Not to worry however, things have turned out alright in the end and everyone is on track.
HN: What’s more important to you: massive user traction or a sound revenue model?
SS: Tough one. Personally I am focused on the revenue model but the lack of user traction usually rests on a very short leash.
HN: What are the most important things you look for when investing in a company?
SS: Easy one: the team. We are laser focused on the team and its inherent capabilities.
HN: When choosing startups to take on, is there a particular exit horizon you look towards? 3, 5, 10 years?
SS: Not necessarily. To be perfectly honest one of our primary objectives is to provide qualified investment opportunities for our own venture capital investors. If we can help identify great startups who are at the early end of the spectrum and then essentially de-risk some of the investment decision by having them perform and execute in an intensive timeframe, then our investors will likely be pleased with this outcome. That said, each of our investors has a slightly different perspective in their own right, which makes this a difficult question to answer. So it comes back to the teams. Great teams should generally prove the model.
HN: Can you share one or two of your favourite success stories that have come out of your program?
SS: Well from our first cohort I think it is safe to say that both Shoplocket and Granify proved our model as they have become very active portfolio investments for some of our investors. We expect more of the same to come.
HN: Can you describe what it’s like to be in an Extreme Startups cohort? What’s involved in the process – what does the accelerator provide – what can people expect to have happen in those 3 months?
SS: One word to describe the 3 month experience in Extreme Startups is “Intense”. There is really little else you can expect to be doing over the 90 days. This is a rare opportunity to be build something truly exciting where so many people are going to be watching you every step of the way. And whats even better is that these are the people who you want to be watching you. This is not to say that there is no fun and games in the program, but we tend to do things together and in a way we become one big family over the cycle. The regular part of your life can resume in due course.
HN: What do you think is the most important factor that goes into making Extreme Startups the powerhouse it is?
SS: Clearly its the combination of our investors, our mentors and the drive we have to build these disruptive companies right here in Toronto.
HN: In your expert opinion, how’s Toronto doing – in terms of tech startups, innovation, and investment climate? Do you see any emerging trends? Do you have any strong opinions on what we (as a city) can do to improve over the next couple years?
SS: Toronto is doing great. We are about to enter a prolific period of growth in our technology sector in my opinion. Its a combination of a lot of factors, but nothing more than the people. The engineering and computer science and design capabilities in this city are the envy of almost any other place in the world. As important as the talent is the presence of the repeat entrepreneur. We are starting to see that phenomenon take shape as well. Combine this with a city of over 5.5 million people with great universities and colleges and you have a startup powerhouse.
HN: Have you any words of wisdom you’d like to leave all the startups and entrepreneurs and techies reading this? Perhaps some tips/advice on getting into your program?
SS: The good news is that an accelerator is really just part of an ecosystem. Even for entrepreneurs who choose not to take part in a small-batch program like Extreme Startups, the key is to take advantage of the inherent networks and connections and to take inspiration from all those doing great things in close proximity. Be part of the action, work hard and tell a good story.
HN: Thanks for the interview, Sunil. Can’t wait to see what wave 3 brings! Applications for the Extreme Startups Spring 2013 Cohort are due February 14th, 2013.