EricChouinard.com

Du 26 septembre au 3 octobre, je serai, avec 10 autres entreprises québécoises, à la 6 ième convention du E. Commerce à Paris. C’est la convention du commerce électronique pour l’industrie européenne. Dès que possible, je vous reviens avec des photos de l’événement. J’ai passé une première soirée très intéressante avec les dirigeants des sociétés québécoises! A+ EC

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Let me tell you about what I learned since iWeb went public, in September 2004. First of all, to be involved on the stock market, your company needs to be a certain size, financially speaking, for this to work – this is usually your market cap (Market Cap: the value of your company ). In Canada, specifically on the TSX Venture, you must have a market cap of at least $10-20 Million, all the way up to $100M. Bigger than $100 Million, you can migrate to the senior markets, like the TSX, the NASDAQ, etc. iWeb was actually worth around $5M when we did an IPO – it was really early in our development, but we were growing so fast that it made sense. We peaked at around $47M of market cap in mid-2007, before the financial crisis, not bad, huh?

The other thing you must be careful with are all the fees involved with going public; there are lawyers, accountants, brokers, TSX fees, and more. What I learned, and thank goodness I did, is that you make a commitment to respect the fee and put all this in contact. The other very important thing is to be well surrounded.

Find a mentor who has been through this before, or who has experience in a publicly traded company, someone you can trust! iWeb used a capital Shell, a CPC, which is sort of like a reverse take-over. The small private company acquires the publicly traded entity. The people who were involved with the shell company stuck around and helped us for a while, mentoring us through some of the important first steps of being public – this really makes it easier for your company to succeed.

For iWeb, going public gave us the means to buy our first Data center and all the infrastructure. We raised $750 000, but the net was $500 000 (after paying all the fees I mentioned). back then, it was a lot of money – our annual revenue was $1.3M. With this money, we would quickly generate over $2.9M of revenue – we all knew that we were working on something very special…

Next post I will talk about the challenges associated with growing revenue!

“How did iWeb become a public company?” This is a very popular question when I meet business people and entrepreneurs. How to do it is relatively easy, there are many skilled professionals who can help you. I think the most important thing is to know WHY you want to go public. You must have a very good reason to do it, because once you start it takes a lot of time, money and a most of your attention.

For iWeb, the main reason was to raise money at the highest possible value, which we needed to finance our expansion plan, which was to acquire and build infrastructure – our first data center. The Initial Public Offering (IPO) helped us achieve one of the important elements in our strategic plan. If you’re thinking of doing an IPO for any other reason than what you have in your strategic plan, don’t waste your time.

So in 2004, we went public, we bought a new Data Center with enough capacity for 1 800 dedicated servers and 42 racks for colocation – and we finally started providing services in english.

I will tell you more about going public in my Next post

Off for one week in Perce, Gaspesie, Quebec with my family.

This is the view from our room!

Cheers

In my previous post, I explained how the idea of iWeb originated; from my days as an accounting student to my first job connecting companies, and I left off at the inception of Formatek; the company that would eventually become iWeb.

Early in 1996, Formatek offered many services related to the Internet, including training, website design (well, web page at that point), hardware sales, custom software, and a few other services that companies were willing to contract us for.

Martin Leclair, with whom I co-founded iWeb, was a collaborator on many of these projects. After a few months, Martin and I started to realize just how well we worked together. Martin, though sometimes a little introverted, has always had a more cerebral approach, thinking of new ways to offer the best web services and working on “what’s next”. As a (complementary) contrast to Martin’s abilities, I was more extroverted, and much more interested in developing the business side of things, like financing and management.

By the end of 1997, Martin and I decided to focus more on a specific “niche” market, web hosting. Specifically, web hosting in French. We knew that as a small group of individuals, we would have a hard time competing against the big IT companies unless we had an edge, and the opportunity to meet the needs of francophone customers was right there.

We also knew that one day, everything would eventually be digital; it was the beginning of MP3 music/Napster, digital cameras, online games, VOIP telephony, IMS (chat with ICQ), etc. We had to get started right away!! Early in 1998, to test our market, we launched boutique-iweb.com which offered 4 test services; Web hosting, HTML training, toner and finally, IT books. The big winner, as you might guess, was Web hosting

Once we saw the results, we decided to merge all the companies we were operating; Formatek.qc.ca, Infonet.qc.ca, and WebDepart.com, to officially launch iWeb-hosting.com in 1998 and create iWeb technologies! In early 99, we created the current version of the company, iWeb Group (here is the press release, it was only published in French, sorry)

Next time, I’ll tell you the first years of iWeb, now that we were focused on web hosting!