If you believe what you read, Ontario’s MaRS Discovery District is having a very positive impact on a huge swath of the Province’s innovation economy. In fact, MaRS is almost as bright as the Sun. Just a few days ago, MaRS put out some new statistics regarding the success of its programs. A few facts and figures jumped out, and I wanted to share them:
• Independent impact studies conducted by KPMG show that MaRS has delivered more than $3 billion in economic impact since its launch.
• We have provided entrepreneurship education to more than 50,000 Ontarians.
• More than 2 million people have used our online entrepreneurship resources.
• Young companies receiving advice and support from MaRS raised more than $1 billion in financing in the last 3 years, and generated more than $500 million in revenue.
• More than 2,000 events a year bring together 100,000+ attendees to accelerate innovation and strengthen our ecosystem.
Let’s parse these figures.
50,000 Ontarians receiving “entrepreneurship education” since 2001. That works out to ~3,850 people a year, spread across 250 business days. 15.4 people trained each day, assuming the education MaRS is referring to worked out to be a single day per candidate. Plausible, even if The University of Waterloo can only teach entrepreneurship to a few hundred students per semester.
MaRS has supported “young” firms which have in turn received $1 billion in new financing over the past three years. This is a stunning figure, as Canadian firms of all shapes and sizes have raised just $5 billion in venture capital during that timeframe according to CVCA data; of which about 40% at the most would have gone to firms based in Ontario. I don’t have any sense of the private Angel market during that same period, but I’d guess that it isn’t a very large dollar value (although one of our readers can fill us in on that).
As such, MaRS says they’ve supported half of the ~516 Ontario companies that have successfully raised capital during the 2011-2013 timeframe. Remarkable, if true.
That these “young” MaRS-supported firms generate $500 million in revenue is also stunning. According to a 2008 study released by the CVCA and Federal government, the average VC-backed company had revenue of $10.5 million, but this average included some billion dollar revenue companies (and many of the MaRS start-ups I know about have yet to raise a Series A, and therefore wouldn’t have made this cut). Indeed, this same 2008 study found that only 15 Canadian companies started between 1996 and 2007 (and still operating in 2008) generated more than $50 million in sales per annum. We all know that the “average innovation economy” company generates far less than $10 million a year; in fact, most “young” companies generate zero on the topline. That’s why they are in an incubator in the first place.
How then, has the MaRS 2011-2013 cohort generated $500 million in sales?
The event side of the MaRS machine is telling. They say they are running eight events there each business day. All year long. It is hard to believe there are that many sessions one can run for innovators in a given week, but perhaps it explains why they need all that new real estate space.
Sadly, that 2,000 figure isn’t really true. There was one event today, at something called the Cube Rooftop on Queen Street West. Not MaRS. There are five “MaRS events” tomorrow, if you include the online applications for the Toronto Public Library Entrepreneur in Residence and something at the Royal York Hotel put on by Brookfield Johnson Controls. Thursday is dead, but Friday closes out the week with the Indian Institutes of Technology Alumni Canada hosting the PanIIT 2014 International Conference at the International Centre in Rexdale. If they are supporting 8 events a day, and I can count just 7 this week, and perhaps 8 advertised for next (including those at Ryerson and Luminato), I suppose it is possible that a bunch of the public events are not being publicized for the public. Putting the name of a convention in Rexdale on your website as “support for the ecosystem” isn’t a reason for taxpayers to keep you in business.
Lastly, the KPMG “Independent Economic Impact” study doesn’t appear to be available online. Search the MaRS site and see for yourself. If you are going to tout $3 billion in economic impact, you want to put those reports front and centre.
I’ve asked the MaRS team for details on the key topics above, and will share their answers when I get them. In the meantime, we can only hope that the MaRS Board gets this wake-up call, and takes a page from Communitech’s book. Now that’s a venture that is shining strong.