VentureLab recently hosted its yearly HardTech event focused on “deep” technology, with a particular emphasis on hardware, semiconductors, Medtech, AI, and mobility. The event was a gathering of investors and innovators from around the globe.
HardTech took a step forward by being in a great, new venue. The event was well organized and executed.
Lots of investors were present from all over the world, really good to see VentureLab actively trying to bridge the gap between startups and capital.
Denis Gaudreault, Intel’s Country Manager for Canada, had a very interesting presentation exploring Canada’s role in the semiconductor world, focusing on leveraging Canada’s wealth of talent and educational institutions to work together with the government to accelerate the industry.
A group of VCs from Bosch Ventures, Monozukuri Ventures, Kanata Ventures, and Roynat Capital discussed the current landscape of capital investment in Canada, echoing many of the thoughts that Denis had: There is a lot of talent in Canada that needs structure to create successful ventures. Canada is well positioned but needs a little more “fuel for the fire”.
The human capital demand for companies has grown exponentially, with more talented people needed for hardware companies every day, and a panel discussion called “How Do We Meet the Supercharged Demand for Hardware Talent in Canada?” really dug deep into how to get young people interested and excited about hardware and talked about training from the ground up to really meet the upcoming demand for deep tech talent.
Design Services companies need to be able to deal with cyclical market conditions. One of the instruments pointed at were R&D grants. R&D grants are in fact a multiple edged sword. They provide a second revenue stream, obviously still tied to engineering resources, but driven by the R&D programs.
One of the challenges that comes with design services is the cyclical nature of the services business. When the economy tightens and corporates are watching their operational expenses, the first step will be to halt any external contracts/contractors which are not deemed absolutely essential.
Whereas the earlier (staircase) model is a good approach in scaling up revenue and creating new revenue streams, the foundation of the company is still based on the service model: headcount continues to be the main driver (typically up to 60-70% of revenue). In terms of (enterprise) valuation the additional revenue streams, however, will already make a significant difference.