The Adam conference room in the Chateau Laurier is a spot where Mr. Somers frequently pitched to investors on behalf of the company he co-founded, Bridgewater Systems Corp.
It was also the room where that company went on to host its Christmas parties, until Bridgewater outgrew the space with more than 300 employees.
On Thursday, Mr. Somers stood in that room again and discussed how his company managed to raise $35 million in three years right before the tech bubble burst.
Mr. Somers told attendees at the Ottawa Venture Forum about his time at the helm of Bridgewater, which was founded in 1997 by Mr. Somers and Russ Freen after they worked together at Nortel and Newbridge Networks.
The two men managed to raise $5 million from various sources including angel investors, Celtic House, Newbury Ventures and Vengrowth, and secured a private placement worth $30 million that closed in March of 2000 – just before the tech bubble burst.
“Timing is everything,” Mr. Somers said. “It was like we had people on a bus partying with champagne, and then the bus went off a cliff. That’s when the tech bubble burst.”
As much as luck played a role in the company securing financing right before it dried up, Mr. Somers shared a few lessons he learned during his time with Bridgewater.
1. The power of the right team and culture. Just before closing the $30 million private placement, Bridgewater’s staff was able to complete three big deals that were in the pipeline. Mr. Somers said the funding was dependent upon those deals: “Close the business, raise the money. Don’t close the business, sayanara.” In the nick of time, Bridgewater employees closed all three deals worth $8 million collectively.
2. Make sure the CEO has assistance. Although entrepreneurs often don’t ask for help, it’s important for the head of a company to have someone to turn to for advice. Executives should find a mentor or join a CEO networking group, and investors should ensure the company’s CEO has someone to ask tough questions to – even if it’s not the investor.
3. The value of the local ecosystem. “I think in Ottawa, a few large, successful companies have grown and grown people with them, which then spawn people out, who then start their own companies, which then spawn people out, who then start their own companies,” Mr. Somers said.
Although he left Bridgewater in 2003 to pursue a consulting career, the company went on to raise $35 million in an initial public offering in 2007. In 2011, Bridgewater was acquired by AmDocs for $211 million.
“For the entrepreneurs in the room – give it a go,” Mr. Somers said as he ended his talk. “It’s a lot of ups and downs, but it’s a ride that is like no other.”
The full-day venture forum featured pitches from eight startups – five from Ottawa and three from Quebec – attempting to woo investors for funding rounds ranging from $400,000 to $2 million.
Keynote speakers also included Nathalie Clermont, director of program management at Canada Media Funds, as well as Telesystem vice-president Thomas Birch.
Hosted by Montreal-based Capital Innovation, the Ottawa Venture Forum was organized in partnership with the Capital Angel Network and Invest Ottawa.
Mr. Somers is now an executive coach as well as co-president and CEO of Cassidy Bay Group Inc.