1. Adjacency - For starters, Jon said they look for companies that are “adjacent to the core business.”  In some instances they have bought companies that are not necessarily adjacent but something they know they could benefit from moving forward. A perfect example of this is their acquisition of Aquantive in 2007, which they knew would help better monetize Microsoft’s online content.
2. Valuation – Considering valuation and doing a model helps Jon decide how much more money they will make by buying your company today vs. developing the technology in-house and releasing it in 8-10months.  ”At the end of the day, a valuation is all about what someone is willing to pay for you,” Jon said.
3. Think like a VC - Since everything moves really quick in the tech industry, Jon needs to think like a VC and have an asymmetric risk return.  Models are imprecise.  And at the end of the day, Jon and his team have to decide that based on their model and the assumptions is this acquisition “directionally correct.”  What matters most to Microsoft is taking market share and keeping it.
4. Market Traction & Technology –  Two girls in a garage with a few users vs. 20 people in an office with real customers makes a difference.  Microsoft is looking for traction, credibility and getting another point of “query share.”   That said, Jon stressed that the size of your company, number of employees, and price is all ultimately irrelevant.  Microsoft will happily consider buying a two person company or a larger entity.  However, they sweet spot is a company with less than 50 employees because of the low organizational impact.
5. Team and Culture – This is something Microsoft looks closely at.  They have passed on deals for cultural reasons.  While culture is important, Jon’s team looks for good documentation, coding and hiring practices.  And after a price is negotiated, Microsoft will hire an independent third party of your choice to delve deep to find out if your code actually does what is advertised.
6. Location – Microsoft has bought and invested in companies all over the world.  Location “matters only as much as it becomes a friction point.”  If Microsoft can manage a company remotely, then borders and location are not an issue.
7. Patent Portfolio - As a startup, you probably don’t want to be spending your money on filing patents.  VCs like Brad Feld would like to abolish software patents all togther. Jon stressed that “any technology is replicable” and if you are concerned bout people stealing your ideas, don’t share your core IP.  Jon mentioned that Bruce Sewell, Apple’s Lawyer believes that a “patent is worth pretty much what it costs to process it.” Execution is what matters.
8. Get Noticed – If you want to capture Microsoft or any acquirers attention, focus on building a quality company. Execute! Execute! Execute! Don’t worry about the exit.  Jon said, “Performance is the best advertisement.”

And once you do get noticed, be organized.  Eliminate as many friction points as possible to getting the deal done.  If Microsoft asks for your latest financials and historical projections, turn it around fast.  Let them be the bottleneck.

As you build your company, Jon recommends working with good attorneys, practicing good corporate hygiene and engineering practices and fully understanding all risks of the deals you sign.  If there are any weird contracts you sign or deals you do along the way, these can affect your success and possibility of a future exit.

Microsoft also invests in companies as a syndicate investor but they did lead the round for a multi-touch screen company called N-Trig in 2009.  ”We will only invest, when we sign a commercial deal along side it,” Jon said.  Investing is a great opportunity for both sides to build a relationship that could lead to an acquisition down the road.

If you are interested in exploring a deal, all you have to do is send Jon an email jgelsey@microsoft.com and he will happily take a look at it.

Many thanks to Jon for taking the time to come to Vancouver to meet with us and to Fasken Martineau and BCIC for helping us bring Jon to town.

If you have any other mentors you would like to connect with – leave a comment here and we will see what we can do.

Martin Ertl of Contractually, LPV9 Startup Competition People’s Choice Winner
Photo credit: Jeremy Lim

Our ninth edition of Launch Party Vancouver on June 17th was definitely our biggest event yet.  As Debbie Landa tweeted, LPV9 was definitely a “who’s who of Canadian tech.” We were thrilled to have Chris Albinson, Katherine Barr, Dan Martell, Debbie Landa, and Anthony Lee from the C100 fly up from Silicon Valley as well as Chris Arsenault and Shawn Abbott from iNovia Capital in the house.  A great big thank you to all of our out of town guests for making the trek to Vancouver.  Go Canada!

Chris Albinson of the C100 Organization and Panorama Capital
Photo Credit: Jeremy Lim

Put your hands together for…
We rely on public and private donations and a whole lot of sweat and sometimes tears to make this all possible.  Many thanks to Sonia Ryan and volunteers Melissa Joaquin, Angela Baldonero, Tarlan Klo, Tina Hoang, and Laurent Munier for working the door and helping us set-up.

We could not do any of this without the backing of our LPV9 Partners:

• BCIC – the lead organization charged with advancing innovation and commercialization in British Columbia.
• Canpages - fastest growing local search company in Canada with a nationwide API for smart phone application developers.
• Clark Wilson - BC’s Law Firm for Business. Mark Longo & Brock Smith are the go to guys.
• HSBC - the world’s local bank with startup banking packages.
• Fasken Martineau - a leading international business law and litigation firm. Keith Spencer and Shahrooz Navabi are the real deal.
• Strutta - the platform for creating online contests and the brains behind the LPV9 Startup Competition.
• Lonsdale Rentals – the place to go for all of your corporate and private party rental needs. From bar rentals to glasses, they have it all.
• Pixstar - Pixstar Photo booths provide the perfect memento to remember any party.
• Mission Hill – Mission Hill has an amazing selection of Okanagan wines. They featured Rigamorole red and white at LPV9.
• Russell Brewing - committed to brewing 100% natural, real Canadian beer. And it shows!
• Jeremy Lim - Check out Jeremy’s awesome LPV9 photo set on Flickr and contact him for your event.

Our Media Sponsors rock:

• Techvibes - our favorite technology blog does an amazing job highlighting all of the LPV9 startups and covering daily tech news in cities across Canada and the United States. And best of all, Techvibe’s President & Editor, Rob Lewis always shows up as promised   ——->
• Startup Digest - All you have to do is enter your email address and choose your favorite hubs to receive the best startup events in your inbox every week.  Jon Chui runs the weekly Vancouver newsletter.

Thank you all for making LPV9 so great!

After having a successful exit, I look back and found that in the early days the biggest challenge wasn’t the great idea we had, it was getting people worth talking too, to listen to what we had. – Steve Wandler, Founder of Metabridge

Last Thursday afternoon, Danny Robinson of Bootup Labs drove a big blue Suburban filled with 6 other entrepreneurs from Vancouver to Kelowna for the 2nd annual Metabridge event.  After a late start and a pitstop in Hope, BC to refuel at the iconic Hope Drive in & Restaurant, we were on our way!

Photo Credit : @dshanahan of Foodtree.com

Derek Shanahan of Foodtree, Lyal Avery of Outcome 3, Mack Flavelle of Compass Engine,  Cristian Strat of Summify and Dean Prelazzi of BCIC were all brave enough to make the trip with Danny at the helm. Both Derek and Cristian are from out of town so I was really happy they could join us and take in the beautiful scenery on the Coquahalla.  No companies were formed but many ideas were shared and my belly hurt from laughing so hard on the road to K-town.

Photo Credit : @dshanahan of Foodtree.com

Day 1
We arrived in Kelowna just in time to catch the bus to the Quails Gate Winery for the Welcome reception.  It was great to see so many old friends from Metabridge 1 including Ethan Anderson, Founder of Red Beacon, Peter Haubrich, Founder of ORIC, Jason Richards of Vineyard Networks and Gary Symons, Founder of Vericoder.  Unlike the first Metabridge, the room was full with many attendees from Vancouver and I was not the only female entrepreneur in the room.

Photo Credit : @dshanahan of Foodtree.com

Day 2
A pitch breakfast for attending startups kicked off Day 2 before a day of Golf or a Sparkling Hill Spa tour.  There were only 8 companies in attendance last year and over 30 startups at Metabridge 2.  Since I spent the day catching up on work, I did not get to experience either afternoon adventure personally but I heard that a full round of golf at the Okanagan Golf course was hands down the better choice!

Photo Credit : @stevewandler of Metabridge

Metabridge ended with a networking dinner at Earl’s Restaurant on the water. Various visiting VIPS were assigned seating throughout the venue and acted as hosts for each table.  I was paired up with Lars Lekkie from Hummer Winblad and Amy Leger of HuStream and Brent Bolleman from Axel Partners joined us.  I can’t sit still for very long so, as soon as dinner was over I was table hopping and mingling.  Without naming names, I made many great connections, who I intend to keep in touch with in the future.

Photo Credit : @dannyrobinson of Bootup Labs

Thanks
Many people were thanking Steve Wandler, the Founder and organizer of Metabridge throughout the evening and he deserved all the props he was getting.  It takes a lot of hard work to pull an event like this off successfully.  Luckily, he had the help of Chantelle Kshyk, Event Manager from Ostec, who is absolutely fantastic to ensure everything ran smoothly and left attendees raving.

Bring Back the Boat!
When I caught up with Steve at the end of Day 2 to thank him as well, he turned to me and said “I don’t want to just hear how great the event was.  I want to hear how I can make it better and better.”  To which, I replied – “well, I have a couple of ideas…”,  which includes a boat, Dale Fuller and a few other suggestions I will share with Steve the next time he is in town.

Photo Credit : @stevewandler from Metabridge 1

All and all it was a great event!  Kelowna has a growing and very supportive tech community.

Thank you Steve, Robert Fine, Chantelle and the entire Kelowna Tech Community for being such great hosts. You are welcome at casa Bootup anytime.

“Bootup Entrepreneurial Society fulfills an instrumental role in the acceleration of technology start-ups to competitively position British Columbia in today’s global technology space,” said Dean Rockwell, CEO of BCIC.  “BCIC is dedicated to develop entrepreneurial talent and to drive the commercialization of technologies and we are pleased to partner with BES in their efforts to make our province a desirable place to found and build digital media start-ups.”

Through this partnership, BES plans to expand its International Mentorship Program to include regular talks and workshops by leading business development and marketing experts. In addition, BES will work closely with BCIC to raise awareness of BC’s burgeoning digital media startup community locally and abroad.

Wantit.bootup.ca
On top of that, we really want to hear from you.  We started wantit.bootup.ca last month to get your feedback and suggestions.  Two of the ideas posted on the Wantit site are already in motion:

• Mentor Speed Dating – Mack Flavelle of Compass Engine has come forward to organize a Mentor Speed Dating event on February 10.  If you are interested in being a mentor or looking for mentorship, please sign up at mentors.bootup.ca and Mack will get in touch with you.
• University Connect Program – Jon Chui is working on a plan to support student entrepreneurs. More information to come.

Go to Wantit.bootup.ca if you want to add or vote for your favorite suggestion.  If you want to help make some of these things happen like Mack and Jon, please contact me or comment below.

Connect 09 is the aiming to be the biggest gathering of the technology industry, and is being hosted by the BC Innovation Council on October 19th. They’ve just opened up a CrowdVine-powered networking site so you can connect with attendees ahead of time. We’ve found it a useful tool in the past when we’ve used it at Launch Party. If you’ve signed up for one of the previous Launch Party networks, you can sign in with the same email/password to join the Connect 09 Network. You can register and buy tickets here: http://connect09.eventbrite.com/

DemoCamp Vancouver is coming up later the same week on October 22nd. We’re going to hold it at our old favourite standby, the atrium space next to the private Steamworks lounge at 375 Water Street. There will be a handful of featured presentations, and we’re looking for a few more 6 minute presentations to round out the evening. There is no charge for the event, but please register to indicate attendance. In particular, if you want to give a presentation, sign up for a “Pitch Presenter” ticket with a description of the pitch you want to give.

We’ll be having some out of town guests give presentations on a variety of things, including an announcement of some new funding sources for startups in Canada.

As always, if you want to be notified of major events and applications, subscribe to the Startup Events notification list, or check the list on Upcoming at http://events.bootuplabs.com. Want your event shared? Add it to Upcoming!

And the Winners are…
Congratulations to LPV8 attendees, Carly Franklin of Magpie Social Media
and Dan Coburn of Atomic Robot for winning the tickets to Connect ‘09. 
That night, Carly and Dan will enjoy panel sessions with industry experts, a technology expo, awards ceremony and great networking with other innovators in the BC technology community including BES Board members, Leonard Brody and Danny Robinson.

Leonard is the Keynote Speaker this year for Connect ‘09. Among his many achievements, Leonard is an experienced entrepreneur, who co-founded NowPublic, a citizen generated news website that recently sold to local news network, Examiner.com. Having heard Leonard speak before, I believe you will walk away feeling inspired.

Danny has been starting and advising companies for over 15 years.  As Managing Director of Bootup Labs, he helps early stage digital media companies go from “concept to proof.”  Danny will be sharing his wisdom on the Accelerator Factor panel at 5pm. If you are launching a startup, you will want to attend this session.

Join Carly, Dan, Leonard, Danny and many more innovators and technology professionals at Connect ‘09.  If you haven’t got a ticket already, you can learn more about the event and register at http://www.bcic.ca/connect

The Entrepreneurial Society helped organize the event in Vancouver along with other local connections from BCIC, SFU TIME Center and the Vancouver Economic Development Commission.

In the morning, the event is open to all the companies that applied. Chris Gill of SVASE is running a session on tuning your pitch and putting together what investors want to hear.

In the afternoon, 24 selected companies are presenting to three panels of investors and advisors from San Francisco, San Diego, and local firms.

The selected presenting companies are:

• AdHack
• Juump Sports Interactive
• Layerboom Systems
• Lambda Solutions
• Let’s Go For Dinner
• Vineyard Networks
• TeamPages
• Rainforest Automation
• Overinteractive Media
• Awesense Wireless
• Zeroes 2 Heroes Media
• MSR Innovations
• Mobify
• Noomii
• Optemo Technologies
• Sound of Motion
• DEQQ
• Visible Strategies Software
• Jostle
• Wireless Image
• Kutano
• Aegis Mobility
• Groove Systems
• Engine Lock
• arcaLife

Congratulations to all the presenting companies, and good luck with your pitches this afternoon!