In October of 2017, Volta announced Volta Cohort — a program developed with the help of BDC and Innovacorp that mimics (in many ways) a program that was started in Waterloo with the help of Ted Livingston in 2011 (I do hope that photo of Ted stays on the internet forever). It is a program supported by a micro-fund that provides $25 000 investments in early stage companies.
The big idea is pretty simple. With Volta Cohort, Volta will provide high potential founders with enough money to demonstrate they can do things. Along with the investment capital, we have developed a program to support the founders with other resources to help them learn quickly, develop their network, and build momentum.
By leveraging the ecosystem for programming the intent is to enhance the overall ecosystem by adding to it companies that are moving faster with a better trajectory. This is heavily reliant on a strong group of peers. Which has proven to be an effective model for ‘mentorship’ that has proven itself out over and over again.
Why build a cohort?
There are two major ‘challenges’ in Atlantic Canada that Cohort aims to take on: (1) founders that raise a significant funding round find it hard to engage with peers, (2) there are not enough very early founders receiving ‘get started’ funding from people that can help them at that early stage.
Inside of the Volta community we have a small but growing number of companies that have moved on to the ‘next’ stage of startup. This next stage typically involves a $1M+ investment round and growing passed their 10th employee. When that happens, the company graduates and moves into an office somewhere in Halifax. The founders are now focused on customers, their board (investors), and their team.
Founders tend to disconnect from peers as the company grows.
Other than a handful of very active (but time constrained) investors, there aren’t people writing small cheques betting on the founder over validating a business model. Startup ecosystems need experienced people taking a lot of little bets and lighting a bunch of founders up with hope (and networks) along with holding them accountable for their progress.
Early company progress can happen without capital but it is a lot slower and reduces the number of people trying to build a company.
By building a Cohort, Volta has created a process where early founders can have a platform to prove themselves enough to get enough funding to give things a go. The support and accountability is provided by people that can’t necessarily write cheques yet but can certainly provide a lot of value to this stage of founder as they can remember being on the other side of the table.
The immense value-add to the community is founders are building stronger bonds with other founders in a more efficient way than what is currently happening.
How will we know if this works?
There are two time horizons where I think success will be measured: 2 years and 5 years out. The importance of 2 years is that it is the lifetime of the pilot phase. I expect there to be some evolution in how things operate over that time as well as a decision to keep going or to stop. In 5 years there should be some significant indication of progress from a fund perspective.
In 2 years, 3–5 companies in the program should have raised a round of $500 000 or more.
Over 5 years 1–2 of those companies should be well established and growing past the 20 employee mark. A few will have failed. A bunch will have varying degrees of success.
Most of the founders that have helped guide these companies should be investors in the next 5 years with the added experience of having worked with multiple early stage companies.
In 2 years the fund itself will have have grown and the cohort expanded to run 3 times a year.
Volta Cohort is an exciting program for a number of different reasons but I am most excited about the opportunity created for founders in Atlantic Canada.
This blog post was originally published by Jesse Rodgers on Medium here.