LaBarge Weinstein Quarterly: Fall 2013

Although it feels like the summer just ended, somehow we’re already well into October with Thanksgiving already come and gone. Since mid-July, the team at LaBarge Weinstein assisted companies and investors in closing over $45M in financing transactions. We also finalized two M&A deals.

As usual, our clients have also been busy. Here are some client highlights from the past few months.

• SendtoNews has secured a deal with the NFL, which gives the Victoria-based digital news company exclusive Canadian rights to distribute NFL video highlights.

• A recent article in The Globe and Mail featured Giatec Scientific and their revolutionary handheld device, iCOR, which allows for non-invasive examination of concrete structures to detect corrosion.

• PwC recently announced the 20 finalists who have been shortlisted for their Vision to Reality Awards. Among them are clients: Chaordix, Frank & Oak, Top Hat, and Wajam. Good luck to everyone on November 7^th when the winners are announced.

• Toronto-based publishing platform Wattpad has formed a partnership with independent publisher Sourcebooks, who plans to release two of Wattpads’ top young adult titles in 2014.

• Themis Solutions, developers of the legal practice management platform Clio, announced that they are expanding into Europe by opening an office in Dublin later this month. They are also celebrating their fifth year in business.

$50M Invested as Part of Canada’s Venture Capital Action Plan

Last month, the Harper Government announced their next steps in the Venture Capital Action Plan (VCAP), which includes a $50M investment spread across four venture capital funds. The investments include:

• $15M to Summerhill Ventures;
• $15M to CTI Life Sciences;
• $10M to Real Ventures; and
• $10M to Lumira Capital.

According to Jim Flaherty, the Minister of Finance, the “investment will help ensure that Canada’s promising start-up businesses have the resources they need to grow, innovate and create jobs for Canadians.”

This investment is part of the Government’s $400-million strategy, launched in January, to help increase private sector venture capital investments in order to create jobs and long term growth.

BDC will support the deployment of the VCAP investments by providing advice, undertaking due diligence, and supporting negotiations with funds and other investors.

The LaBarge Weinstein team would like to congratulate CTI Life Sciences, Lumira Capital, Real Ventures, and Summerhill Ventures on the investments received.

Read the full press release here.

Whether your startup is a B2B or a B2C, video should definitely be a part of your firm’s marketing mix. Video is an effective and simple way of engaging with prospects and customers alike. Depending on how you want your organization to be perceived and what you’re trying to accomplish, videos can entertain, educate, or even inspire.

In case you need more convincing, here are five ways videos can help your startup.

1) Videos Can Clearly Explain What You’re Offering

Sometimes it can be difficult to get an idea across in writing and unless a prospect truly understands how your product or service will benefit them, they’re probably not going to buy what you’re selling. Using video is a great way to clearly explain your value proposition and describe how your organization differs from the competition. Also, it allows you to influence the delivery of the message, since you have control over the pace, tone, and energy level.

2) Videos Help Your Message to Stick

Studies have shown that people retain significantly more information when they see and hear a message simultaneously versus reading it or having someone tell it to them. By using video, you can make a much larger impact on the viewer than simply explaining your offering in text.

3) Videos Help with Your Search Engine Optimization

Search engines love videos, so including video on your website can help your site rank higher than ones without it. Also, since YouTube is the second largest search engine, hosting your videos on YouTube and linking them back to your site will help with your SEO.

4) Videos are Shareable

Although your video might not “go viral,” videos are the most shared form of media on the internet, so don’t make the mistake of keeping your videos confined to your website. For starters, you will want to use a hosting platform such as YouTube or Vimeo in order to get the most exposure. You should also look at other ways of sharing your videos such as posting them on social media sites and including them in email marketing campaigns.

5) Videos Convert Prospects to Customers

There are numerous studies that indicate video has a significant impact on conversion rates. Recent studies conducted by Internet Retailer show that website visitors who view product videos are 85% more likely to buy than visitors who do not. They also reported that 52% of consumers say that watching product videos makes them more confident in their online purchase decisions.

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If you’re looking to have a video produced for your startup, there are a number of options available including Kicker, Video Rascal, and Simple Story Videos. For those of you already utilizing video to promote your organization, you should consider implementing a video analytics program such as Vidyard. This will allow you to better understand how people are viewing your videos and help you shape future video content to improve your ROI.

Later this month, we are launching a video series called LW Academy, targeted at startups. Be sure to follow us on Twitter for further details.

On September 19, 2013, the federal Minister of Finance and the finance ministers from British Columbia and Ontario announced an agreement in principle to establish a national securities regulator.

Currently, securities regulation in Canada is comprised of 13 sets of rules and regulations which are administered by the 13 provinces and territories. The compartmentalized system has received criticism from both practitioners and academics. The complexity and duplicative nature of the current regime frustrates domestic market participants, as well as foreign entities looking to do business in Canada. Uncertainty and inconsistency of the current regime has a negative impact on the reputation of Canadian capital markets.

The collaborative attempt at introducing a national securities regulator reflects the 2011 decision of the Supreme Court of Canada, which found that the federal government’s previous attempt at establishing a national securities regulator was unconstitutional. According to the agreement in principle, each of the participating provinces and territories will only be addressing matters within their constitutional jurisdiction.

The agreement outlines the proposed system as follows:

• Each participating jurisdiction will adopt uniform provincial or territorial legislation relating to the regulation of securities markets;
• Complementary federal legislation will outline criminal matters and systemic risk in the capital markets;
• A single independent regulator with its own adjudicative tribunal will administer the provincial and federal legislation;
• There will be offices in each of the participating jurisdictions, providing the same range of services that the provincial regulators currently provide; and
• A simplified fee structure will be implemented and will allow for the new regulator to be self-funded.

At this stage, British Columbia and Ontario plan to discuss the agreement with the other provinces and territories to try and convince them to participate in the proposed system. The target timeline for implementing the new regime is for each participating jurisdiction to enact the applicable legislation on or before December 31, 2014. The new national regulator is expected to be operational by July 1, 2015.

Here is a sample of recent publicly-announced transactions that we’ve worked on over the past few months:

• 360pi’s Financing
• eSentire’s Financing
• IMRIS $25M Financing
• Tapstream’s Financing

The Lexpert® Zenith Awards honour lawyers who have led their clients, firms, companies, departments, faculties, profession, colleagues and/or communities, and have been role models for other women in the profession. We are pleased to announce that firm partner, Debbie Weinstein, was a 2013 recipient.

Debbie was also recently named one of The Best Lawyers in Canada in the practice area of Corporate Law, Mergers & Acquisition Law and Technology Law by Best Lawyers® as well as Best Lawyers’ 2014 Ottawa Mergers & Acquisitions Law “Lawyer of the Year”.

LW articling student, Diana Cooper, spoke at NYU’s recent Drones & Aerial Robotics Conference. This event looked at the cultural impact, legal challenges, business potential, and application of drones in areas such as agriculture, policing, wildlife conservation, weather, mapping, and logistics.

We are pleased to announce that firm partner, Lawrence Weinstein, was appointed to the University of Ottawa Board Of Governors on October 2, 2013.

On Wednesday, October 23^rd our Taxation, Tax Planning, and Tax Litigation team are hosting a free breakfast seminar for accountants and business advisors. During the presentation, we will discuss tax planning strategies for successful owner-managed businesses.

For more information, please contact Casey O’Brien at cobrien@lwlaw.com.

Many businesses in Canada are unaware that goods and/or services they provide to customers located outside of Canada may be subject to GST/HST.  For example, if your business provides services on tangible personal property located in Canada (for example, repairs machines located in Canada) for a US customer, those services may be subject to GST/HST even though your customer is not located in Canada.

For sales of goods delivered to a Canadian address, those goods may also be subject to GST/HST despite the fact that the customer and its billing address are outside of Canada.

If you have questions with respect to the application of GST/HST to the goods and services you supply to your customers, please contact us and we would be happy to assist.