Frequently Asked Questions

 

1. How should I choose a venture capital investor?

2. In which types of companies does Octane invest?

3. Does Octane invest outside of Canada?

4. How much does Octane typically invest in a company?

5. Does a Octane partner always join a company's Board of Directors when Octane makes an investment?

6. Does Octane prefer to lead a round of venture capital investment?

7. Will Octane invest in a company even if it is not the lead or co-lead investor?

8. Do you sign NDA Agreements?

9. What information does Octane find most helpful in evaluating potential investments?

10. What are the key decision criteria Octane uses to determine whether to invest?

11. What is the investment process at Octane?

12. After making an investment, what does Octane do to support the growth of its companies?

13. How can I submit a business plan to Octane?

14. What is a "Portfolio Company"?

15. What is a “Partner” of a Venture Capital Firm?

 

1. How should I choose a venture capital investor?

Management should carefully assess the value-add of potential investors, seeking VCs who have been in the business a long time, have a proven track record of solid successes and a network that will serve a company well throughout its growth. Additionally, management should look for partners with relevant experiences and relationships, who share a similar operating philosophy and understand the market in which the company operates.

Further, it is important to Octane that a company chooses a set of investors who can add value as a company requires in its different stages of growth. We look for co-investors with a similar philosophy, track record, network of appropriate contacts and commitment to the long-term success of the venture.


2. In which types of companies does Octane invest?

Octane invests primarily in early-stage technology companies with the potential to lead in the
enterprise software, consumer services and communications sectors. We do not invest in publicly traded companies nor do we invest in any companies that are not technology-based.

3. Does Octane invest outside of Canada?

Yes. We will look around the world for leading edge technologies that can add value to the oil and Gas industry.


4. How much does Octane typically invest in a company?

Although the amount we invest is driven largely by the opportunity, our typical initial
investment is $1-3 million. We generally also participate in follow-on financing rounds
and assist in finding co-investors in these rounds.

 

5. Does a Octane partner always join a company's Board of Directors when Octane makes an investment?

n most cases, yes. In our experience, active participation on a company's board helps us to maximize our contribution to the company's long-term growth.


6. Does Octane prefer to lead a round of venture capital investment?

Yes. By leading the round, Octane plays a major role in setting the terms of the investment,
the amount of money invested and also helps select other investors to join in the funding.
We feel that by leading a round or by being part of the lead group, we can add the most
value and have the most impact.


7. Will Octane invest in a company even if it is not the lead or co-lead investor?

Yes.


8. Do you sign NDA Agreements?

Octane Venture Partners receives a steady stream of new business plans each week. Without these new opportunities, our ability to make new investments would decrease substantially.
If we were to divulge the secrets of confidential business plans, not only would we destroy our relationship with entrepreneurs, we would also damage our reputation in the market. Thus, we take pride in our ability to protect the secrecy and security of each entrepreneur who presents us with a business plan. Using NDAs to protect secrecy, however, presents problems for us on two levels.
First, with the volume of deals that we see every year, such NDAs would quickly limit our ability to look at new plans and thereby limit our ability to invest. The problem is particularly acute when one considers that most of our businesses are in the narrow range of technology opportunities, so the likelihood of some overlap in business opportunity increases greatly. Second, the legal steps required to execute NDAs significantly lengthen the amount of time it takes our investment professionals to respond to entrepreneurs.
If you are ready to send us a business plan and are concerned about our NDA policy, please do not include the detailed technical specifications for your product or service in your plan. Like most investment professionals, we are more interested in the background of the individuals, the size and scope of the market opportunity and the general problem that the product or service addresses.
Any ideas or other material submitted by you will be treated as having been submitted on a NON-CONFIDENTIAL basis whether or not such ideas or other material are marked or referred to by you as confidential. Octane Venture Partners will have no duty to treat such ideas or other material as confidential. Octane Venture Partners will pass on any ideas or other material submitted by you to our venture capital partners. Again this will be on a NON-CONFIDENTIAL basis.

 

9. What information does Octane find most helpful in evaluating potential investments?

For initial consideration of a potential investment, we prefer to receive a 2-3 page
Executive Summary that addresses the following areas:

  • Brief description of the product or service.
  • Market need, size and competitive landscape.
  • Company/product positioning.
  • Customer and customer acquisition strategy.
  • Background of key management.
  • Development stage of company including milestones met and set.
  • 3-year financial projections summary.
  • Capital requirements and current capitalization structure.

 

10. What are the key decision criteria Octane uses to determine whether to invest?

We invest in technology companies with the following attributes

  • Strong customer value proposition, large market opportunities and a solid go-to-market strategy.
  • Great technology.
  • Sustainable competitive advantages through highly differentiated, superior products or services positioned to dominate emerging markets.
  • Exceptional entrepreneurs with a clear vision of the business, a passion for the technology and its long-term potential, the energy to build an enduring enterprise and the ability to execute


11. What is the investment process at Octane?

We receive hundreds of business plans a year, therefore the key to getting a plan accepted by Octane is to have a sponsor within our partnership. You can improve the likelihood of funding by getting a sponsor. Sponsors come in many forms but generally people from Producers, Service Companies, Attorneys, Investment Bankers, Entrepreneurs or Accountant who are familiar with our process can provide a lot of help. Once sponsored, the partnership does due diligence on your markets, customers and prospects, you present your business plan, term sheets are agreed on and financing and a long-term working relationship begins.


12. After making an investment, what does Octane do to support the growth of its companies?

Octane has a team approach towards our portfolio companies. Our Partners are active on our portfolio companies' Boards of Directors. We work with companies to identify and attract Senior Management, Directors, Service Providers, Customers, Channels, etc. We also work with a variety of trusted Partners to create new opportunities for our investees.

 

13. How can I submit a business plan to Octane?

Having a contact into Octane through one of the partners is the best way. We also leverage
our contacts with attorneys, investment bankers and serial entrepreneurs. Although we prefer
to get business plans by e-mail, we do also accept business plan submissions by fax, e-mail,
or surface mail. See contact information.

 

14. What is a "Portfolio Company"?

Portfolio Company" is an industry term that refers to companies in which venture capitalists
invest. Such companies are said to be held "in the portfolio" of the venture capital fund.


15. What is a “Partner” of a Venture Capital Firm?

An individual who assumes responsibility for managing a venture capital fund and selecting companies in which to invest is called a "Partner”

 
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