In this third instalment of a 12-part series of monthly articles, the Ottawa
Business Journal follows Serence Inc. on its journey toward software startup
success or failure. A trio of former Espial employees incorporated Serence on
Aug. 2. The company's technology makes it easier for people to get tailored
information pushed to their desktops and wireless devices.
In the last article, Serence just closed its $70,000 friends-and-family financing
round and was tweaking its business plan in light of outside advice. In addition, it
was receiving positive feedback from its 600-plus beta customers.
This month's article chronicles CEO Allan Wille's visit to ROBTv on Jan. 22 as well
as the company's search for angel financing and a senior business development
executive. If you missed the first two instalments of Serence: A Startup Story, check
them out in the OBJ archives at ottawabusinessjournal.com.
Just minutes after being rejected in front of a national television audience on
ROBTv, Allan Wille is glowing.
It might seem like an inappropriate response, but the chief executive officer of
Serence Inc. had achieved his objective: exposure.
"We're going after angels right now, so the objective for ROBTv was to get
exposure. It has a viewership of 100,000 per episode, which is pretty decent," says
Wille, who appeared on ROBTv's The Bottom Line with Michael Vaughan on Jan.
As part of the show's "Tech Tuesdays" segment, Wille participated in a one-minute
pitch session followed by questions from a panel of investors. Panellists that day
were VenGrowth director Peter Carrescia and Quorum vice-president of investment
Admittedly, Wille was quite nervous about representing Serence for the first time on
a national scale. He had spent the past month practising the pitch in front of family,
friends and his board of advisors. And with the segment being aired live in front of
potential investors, he only had one one chance to get it right.
"I had prepared quite a bit and I think I was nervous right up until I walked into the
studio," recalls Wille. "But when I walked in and met the three other CEOs, one of
the guys was nervous as hell. That kind of calmed me down because there was
one guy there who was way more nervous than I was."
His pitch was timed to perfection. (He even received a compliment from Vaughan.)
The rest of the feedback, however, was rather negative. Carrescia remarked that
Serence's concept had been done, while Moskowitz added the company's market
niche was "not a place I'd want to be." To Wille's credit, he addressed their
concerns in a quick and confident manner. But that didn't change the fact his
company had just got shot down in front of a national audience.
"It was unfortunate that it didn't turn out to be a yes' from the panellists. I think a
yes' would have helped our reputation in the larger community, but I wasn't
surprised about that," says Wille, explaining that Serence is probably too early
stage for either Quorum or VenGrowth.
Nonetheless, he spread the Serence story and looked reasonably intelligent doing
so. That goes a long way in an industry where competent management is highly
"I was pleased with the way we answered, I was pleased with the way we
positioned the company. I phoned Peter (Matthews, co-founder and product
director), I phoned James (Scott, co-founder and chief technology officer), I phoned
my fiancé. I was really happy," says Wille.
For Matthews and Scott, who were watching it from their respective home offices, it
was just as nerve-wracking. The two spent a good chunk of time trading telephone
calls before Wille finally made his appearance. Watching his friend represent their
company in front a live national audience was surreal, says Scott.
"I've never actually seen something I was directly involved in represented in such a
public way. It was a very strange personal and professional experience," he says.
Matthews was mostly nervous about making a good first impression.
"I was very, very nervous to be perfectly honest," he says. "I think I was nervous
mostly because this was our first big public appearance."
The ROBTv experience would have been tougher to swallow if Serence had not
been receiving positive feedback from potential customers. That feedback has
given the trio of Serence founders a quiet confidence, which they draw upon when
investors like Carrescia and Moskowitz question their business plan.
"Even though the (ROBTv panellists) said no,' that's absolutely fine because we're
gaining momentum," says Wille. "We've got a number of interested content
providers, and they're the ones that will pay the bills at the end of the day."
Currently, Wille and Matthews are speaking directly with 10 target content providers
to learn about their pain points and pricing models. Twelve per cent of Serence's
1,000 registered beta users are content providers, which the company hopes to
turn into customers when its version 1.0 is released mid-to-late March.
To turn those beta testers into customers, Serence has recruited business
development consultant Sudhir Tiwari. Wille learned of Tiwari's work while chatting
with GotMarketing Inc.'s Linda Partner. After some initial talks, Tiwari agreed to be
added to Serence's advisory board in late January.
"They need some help in channel development and sales," says Tiwari. "They're at
a point where the first set of customers won't just validate them in the market, but it
will help shape their entire future."
Unfortunately, Tiwari is not the full-time business development person Serence is
looking for. His intentions are to help the company in the short-term, but he is not
planning to vacate his own consulting firm, called StratiSell Systems.
"Will he stay on? I don't know," says Wille. "He's a consultant right now. If he
doesn't he will certainly help us bring on a full-time biz-dev person."
Serence got a flood of resumes following the ROBTv appearance, but what Wille,
Matthews and Scott really wanted were investor inquiries. They are looking to close
seed round of about $500,000 by the end of March, and just started pitching local
angels on the idea.
The company has been depending on referrals from advisory board members and
from OCRI's Ottawa Capital Network. In fact, Serence was among the 12 startups
chosen to present at OCRI's IdeaFlow event, scheduled for Feb. 12. The event's
primary goal is to educate and introduce startups to angel and seed investors.
If successful in raising the $500,000, that kind of money would last the company for
about 12 months. The money would be used to hire three or four more engineers,
a business development person and a marketing person, who would raise
Serence's head count to eight or nine full-timers.
"(Advisory board member) Debbie Rosati has been good at putting together an
investment strategy: Who are we going to talk to? What does the deal look like?
What is the valuation. All of the stuff we need to have a good, consistent story," says
Wille, who is also looking into government funding through the Business
Development Bank of Canada and Canarie Inc.
Someone who may be able to lend a hand is Peter Standeven, president of
Canada IT Ventures and co-owner of the Canadian IT Financing Forums in Toronto
Standeven first contacted Wille as an interested content provider.
"Actually, I accidentally bumped into Serence's Web site on one of my forays onto
the Web," says Standeven. "I had known Allan from Espial and always thought of
him as an intelligent guy."
Subsequently, Standeven was added to Serence's lengthy list of advisors, with a
specialty for business planning and financing. His best piece of advice at this point
in the game is for Serence to choose its investors carefully.
"One of the biggest issues in raising capital is not just getting the money, but how it
will impact your ability to raise money down the road," says Standeven. "You're
building a base on which to raise future financing, so you have to get the base
He also intends to help the company by referring it to angels and VCs he knows
a lengthy list considering Standeven's status in the community.
NEXT UP: In the fourth instalment of this series, the OBJ will follow Serence as it
hammers out the terms of its financing deal. Other focuses will include the
company's IdeaFlow presentation, pursuit of its first customer and getting version
1.0 out the door.