“Startup University” Pays Off for VC

As in so many other cities that aren’t located in or near Silicon Valley, the startup scene in Toronto is a fairly small and close-knit community. It  benefits from events such as “Demo Camp” and “Bar Camp,” where young entrepreneurs can come and bounce their ideas off others who have been down that road before, and get some critical feedback. Inspired by those kinds of events, and building on their own efforts to create a community within their own portfolio companies, the venture capitalists at Extreme Venture Partners decided to fund a kind of school/competition last year called Extreme University. It went so well that EVP recently announced it’s running another one this summer.
Based loosely on the format developed by Paul Graham at his Y Combinator incubator, ExtremeU asked for entrepreneurs to “audition,” “American Idol”-style, for one of three slots in the program. Successful applicants got $5,000 each from Extreme Venture Partners, as well as office space and free Internet access at the EVP offices in Toronto, and 12 weeks to build and launch their app, product or service. The program was run by Farhan Thawar, the VP of engineering for Xtreme Labs (one of EVP’s portfolio companies) who says he’s hoping to make it even larger by opening it up to more startups. I’ve embedded a short video interview with Farhan below:
Saif Ajani, co-founder of Assetize, was one of those who applied for and was accepted to Extreme University, and says there were a number of benefits to being in the program. One was the ability to get feedback from Thawar and the founders of Extreme Venture Partners (which has a $10 million fund) as the company’s idea was evolving. Ajani says this was instrumental in helping Assetize shift from its original idea, which was to monetize Twitter by buying and selling user accounts (just as some companies do with domain names), and move towards its current service, which is an advertising network built on Twitter.
Ajani also says the program allowed Assetize to make connections through Extreme Venture Partners that would not have been possible otherwise, or would have taken much longer. As a result of connections between the venture firm and sports management agency Octagon, he says, Assetize was able to form a partnership with the agency to use its Twitter advertising tools, and recently launched a site called FanWaves.com with the Phoenix Suns as a major partner. One of the EVP partners, he recalls, said: “‘You know who this would be perfect for is sports celebrities like Michael Phelps,’ and because they had worked with Octagon, that helped us connect with someone there.”
A third benefit of the Extreme University program, Ajani says, was being able to leverage the development work that was already going on in the offices of Xtreme Labs, which Assetize and the other members of Extreme University shared. The largest of EVP’s venture portfolio companies, Xtreme Labs is a web and mobile development shop that works on iPhone (s aapl), BlackBerry (s rimm) and Android (s goog) apps, and has done work for sites such as Urbanspoon, CitySearch and Dictionary.com. About 30 developers are set up in a single room, working in what is called “paired development” teams, which involves two programmers (typically one experienced and one less experienced) working together on a project. Thawar says this structure allows not just the Extreme University companies but all of EVP’s portfolio companies to take advantage of the brainpower of Xtreme Labs.
The Xtreme Labs VP says the “startup university” idea not only provided a boost for some startups and built goodwill in the Toronto startup community, but also gave Extreme Venture Partners connections to some strong entrepreneurs and companies that could turn into full-fledged portfolio companies in the future (as part of the Extreme University program, EVP gets a 10 percent stake in each of the startups that are accepted). Assetize, for example, is looking for its first round of financing with help from EVP, which has agreed to provide some if the company finds a second VC to join.
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Post and thumbnail photos courtesy of Flickr user Thomas Hawk