Ben Yoskovitz and Marcus Daniels of the newly created Highline Beta are looking to talk to Montreal founders.
The truth is they’re looking for legitimate founders everywhere in the world. But the cofounders, both of whom lived in Montreal for extended periods of time, will be keeping a close eye on entrepreneurs in this city.
Yoskovitz unleashed Highline Beta two weeks ago. It’s a gutsy business model, but one that the pair are saying is a natural evolution of pre-seed accelerators.
The new company works with large, corporate customers to find problem areas or opportunities of interest and plugs in “top-tier founders” to start companies in those areas of interest. Highline Beta will make pre-seed or even seed investments into the startups it creates.
Both Yoskovitz and Daniels have run accelerators in the past. Daniels took over the former Extreme Startups program in 2013, which eventually merged with Vancouver’s GrowLab in 2014 to form the Highline accelerator. Yoskovitz was a founding partner at Year One Labs. Both men have played investor, founder and employee roles in startups.
“I’m on record saying that accelerators are not an effective way to make money,” Yoskovitz told MTLinTECH. He moved away from Montreal in 2012 when he joined GoInstant. After that he worked at VarageSale, all the while keeping his angel investor hat busy through 15 investments.
Yoskovitz referred to the fact that an accelerator program for startups is a long-term game. A firm needs to invest in dozens of companies every year to eventually find a return, over (ideally) several funds. Even then, striking gold on a profit-earning company isn’t guaranteed.
Neither is Highline Beta. But the idea seems as logical as one could be in 2016. Yoskovitz said he believes better startups will come out of this new process.
“This isn’t Marcus and I in a room with a white board saying, ‘Oh, we have this idea.’ I don’t have the ego to assume I know what all the good ideas are. I think large companies have untapped potential around areas of real opportunity. They know the things that keep them up at night, they see the risks in the market that could disrupt their business and they want to get ahead and figure out how to solve those problems before someone else eats their lunch,” said Yoskovitz.
As Peter Diamandis of the X Prize Foundation once said, “If you’re relying on innovation solely from within your company, you’re dead.”
Yokovitz said Highline Beta will figure out where opportunities lie, work with those companies to do some early validation work and eventually decide if there’s potential to start a company.
Each startup created will be a long-time investment. It won’t be easy work.
After they figure out the idea, the pair will need to recruit legitimate, proven people who can come in and take over the role of founder. Still after that, they’ll need to decide if there’s enough progress to justify writing a pre-seed cheque.
“Ultimately the hypothesis for us is better startups will emerge from working with these large companies,” said Yoskovitz. “It’s something we see ourselves working on and scaling for many, many years.”
Yoskovitz wouldn’t divulge details, but we expect their fund will be worth around $10-20 million. Highline Beta will even write seed cheques (a second cheque after ‘pre-seed’) if it feels enough momentum, but it won’t invest beyond that.
Yoskovitz said the fund will also invest in independent startups that have nothing to do with the company. After all, they have a fund and they’re plugged into Canada enough to know when to go after an opportunity.
But he also warned that we shouldn’t expect dozens of cheques to come out of it.
“This is a quality over quantity fund,” Yoskovitz added. “We can’t co-create dozens of companies because there’s a methodology that takes a huge time investment.”
Just like the Montreal-based company creator TandemLaunch, Highline Beta will need high-quality minds to plug into its companies. For that reason, finding a leader isn’t a locally-targeted affair but rather a global head hunt.
Still, Yoskovitz reiterated that Montrealers should be paying attention.
“We’re deeply connected to Montreal through family, work history and our network,” he said. “We’re looking to talk to founders, people who are thinking about starting companies and people who have started companies to make sure we’re really well connected into that ecosystem at the grassroots level.”
“Anyone who wants to talk to us, we’re easy to find. Please reach out to us.”
Photo by EvaBlue.com