Radian6 co-founder encourages patient approach

By Adam Huras – Telegraph Journal | link to original article

FREDERICTON – The co-founder of a startup at the forefront of New Brunswick's emerging technology sector says government money that has been invested into failed new business is not lost in creating the province's future jobs.

Radian6 co-founder Chris Ramsey said Tuesday that it's a lack of access to capital in Atlantic Canada that limits the creation of new business in the province.

Ramsey said governments should not be deterred by failed investment, as it trains a new generation of skilled workers in emerging sectors.

A lack of investment stunts the ability for sectors to grow.

“Investment in business is critically important, even if they fail,” Ramsey said. “If you build a business and you bring young people in, they move up the chain, they get experience, you are training the workforce for the next round of companies.

“If you look at Radian6, we are almost 400 people now and a lot of people in our company have never been involved in a high-tech company before and now they have been.”

He added: “Whether they succeed or fail, it doesn't matter because you are investing in the economy and the workforce to make it bigger and bigger.”

The sale of Radian6 was announced in March to San Francisco-based tech company Salesforce.com for $276 million in cash and $50 million in stock.

Speaking at the Southeastern United States and Canadian Provinces Alliance meetings in Fredericton on Tuesday, Ramsey said the Fredericton-based company will not move with the deal, and that it will be hiring another 100 people between now and the end of the year.

The deal also benefited more than just angel investors, venture capitalists and the Radian6 founders.

New Brunswick taxpayers have a $325,000 investment in Radian6 through the New Brunswick Innovation Foundation, a provincially funded corporation that invests in startup companies.

In the fall of 2006, the NBIF, with a board of private-sector players, put up $50,000 to help Radian6 in its early days.

In 2008, the NBIF pumped $276,000 into the company's expansion.

“The New Brunswick Innovation Foundation is a venture capital firm, but it is focused on early stage,” said Mariner Partners Inc. chairman Gerry Pond. “Here in New Brunswick, we don't have a lot of mature IT companies,so early stage capital is very important.

“You have angels, those are private individuals willing to invest, but it takes quite a few of them to get enough to start an IT company. The critical role that NBIF plays is that they do come in very early in the left of the company before there is revenue.”

Pond was also chairman of the board for Radian6 for the last five years.

“Other than angels, which are myself and just a few others here, there are very few sources of early-stage financing,” Pond said.

Ramsey also said it was positive that New Brunswick joined Nova Scotia in the creation of a new regional venture capital fund to support emerging companies in the region.

New Brunswick will contribute $15 million to fund, created by Nova Scotia and announced in April. Companies involved in clean technology, life sciences, information technology and other high-growth sectors will be able to access the fund.

“It's healthy for the economy,” Ramsey said. “The more we can fund smart technologists and entrepreneurs that have great ideas but not enough financing to take them to market, the better off we are going to be.”