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Ten Valuable Lessons from our Between 2 Term Sheets Podcast – Part 1

The Between 2 Term Sheets (B2TS) podcast brings listeners behind closed doors into conversations between investors that typically stay private. Produced by Alacrity Canada, B2TS features intimate conversations with some of the most prominent investors, founders, venture builders, and accelerators across North America’s thriving technology scene.

From a Shopify co-founder, to a venture partner from NEA, to founders of rapidly scaling startups, to a former CBC Dragon’s Den dragon – season one of Between 2 Term Sheets was full of amazing conversations. We’ve gone back and compiled a roundup of some of our favourite lessons and insights.

Episode 1 – Tom Williams, investor, & founder of BetterCompany & Owen Matthews, chairman of Alacrity Canada

Tom Williams

Tom Williams

“In the first minute [of a pitch], I basically write a person off, or not. I can be there for an hour, nodding my head, but I’m either checked in or checked out in the first minute. And then five minutes in I decide if I’m gonna get excited about it and whether it is an investable business for me. I’ve essentially made that first determination [with] 90% certainty in the first five minutes, and the rest is either information gathering to advance the opportunity, or being polite. So, you’ve got a minute to get attention. Show, don’t tell.”

Owen Matthews

Owen Matthews

Owen Matthews: “This is something that I speak about often when talking about pitching: the first minute, and the story associated with what happens in that first minute. It’s all really subjective. The complexity and the nuances of the investment pitch are far less important than earning the right to do business with somebody. And to earn the right to do business with somebody, you need to speak to them in a way that they understand and can absorb information. Stories are really the best format for that. You want to tell a story about your experience with a customer, and how that customer used the tool, and then the opportunity to expand [on that story].”

Listen to the full podcast episode here:

https://www.alacritycanada.com/2018/05/30/between-2-termsheets-launches/

Episode 2 – Scott Lake, founder and general partner at Hello Ventures, co-founder of Shopify

Scott Lake

Scott Lake

“For anyone who’s ever been in sales, it’s actually easier to get to the ‘yes’ or ‘no’ faster if you put forward the terms. The benefit to that is you don’t get the, “I’m interested but I want to wait and see”, which is actually generally a no. It’s a huge waste of time. I can remember cold calling with the first software startup I was ever involved with, and it would go like this: “Are you sure you don’t need this product? Can you confirm right now that you’ll never need this product? That’s a no? Okay, thanks!” And then I’d never spend any more time on them. I think there is some benefit to that in the investing world as well. You can’t dictate all the terms, but you should have a good idea about the terms you want. And part of the first conversation is, if we ever did get to yes, would these terms be acceptable or possible? And if the answer is no, and you know that you do want to go and do that in some other form, then it’s better to just move on.” 

Listen to the full podcast episode here:

https://www.alacritycanada.com/2018/06/06/alacrity-podcast-ep-2-feat-co-founder-of-shopify-founder-of-echosec/

Episode 3 – Ben Narasin, venture partner at NEA

Ben Narasin

Ben Narasin

“Nothing succeeds like success. If you want to get credibility, deliver.”

“The thing I always thought about for myself as an investor, and for my entrepreneurs, is whether or not we were pulling together a syndicate of people that could add value – not just capital. If you’re an entrepreneur and you’re out there to raise money, there’s a time when you just need The Money. And if all you can get is The Money from one source, then it’s highly likely that’s the source you’re gonna get it from. But if you have the luxury of choice, this is the time that you really need to exercise as much diligence as you can in learning about that investor.” 

“Everybody’s great when times are good. It’s when times are tough that you need to find out how people are going to operate. It takes seven to ten years to get returns from funding a company – and that’s at series ‘A,’ not even seed. At the seed stage, it’s probably more like eight to twelve [years] to reach the kind of magnitude that people desire for venture scale returns. […] This means you’re on that journey with the people that you brought in for a long time, and you better understand how they’re going to operate in smooth sailing or rough. Because if you don’t, you end up getting surprised at the worst possible time, and that’s a painful reality to face.”

Listen to the full podcast episode here:

https://www.alacritycanada.com/2018/06/27/episode-3-of-between-2-termsheets/

Episode 4 – Alex Tong, principal at Information Venture Partners

Alex Tong

Alex Tong

“Early-stage investing is very much a two-way relationship in so far as we want to de-risk and get to know the founder and see how he or she goes through trials and tribulations. I think it’s important for the founder to get to know the firm/investor that he or she could be working with. […] What are they like? How are they like in trying times? How are they going to help you make introductions and connections? How can they add value beyond capital?”

“The best pitches I’ve seen are those that are focused on a very specific market opportunity that they believe they can conquer. The team has conviction around each of the members, and its ability to add to [the market opportunity].”

Listen to the full podcast episode here:

https://www.alacritycanada.com/2018/07/05/alacrity-interviews-information-venture-partner/

Episode 5 – Steve Clark, president of Company Capital

Steve Clark

Steve Clark

“It starts with a business plan. Because anyone can go on the internet and download a business plan and fill in the blanks. So really at the end of the day, you have to start looking deeper into it. I usually start out with the character of the individuals, specifically the central management group. If you can ascertain an intelligence factor, an experience of formal training, how much commitment they, and quite often their family, is willing to put forward, that’s where it starts.”

“What do you think you’re best at? That would probably be about the second or third question in a financing situation. What’s your core competencies that you guys have?”

Listen to the full podcast episode here:

https://www.alacritycanada.com/2018/07/25/between-2-term-sheets-episode-5/

Episode 6 – Bruce Croxon, managing partner of Round 13 Capital, TV co-host of ‘The Disruptors’

Bruce Croxon

Bruce Croxon

“One of the things we obviously look pretty carefully at is: how happy are the customers they currently have? Which generally shows up in a low churn number if the customers are happy. And if they’re not happy, the churn is usually higher. So we look for applications that are making customers happy and in markets that are big enough and solving real enough problems that we can get excited about. And thankfully, we’re at a pretty golden time for Canadian companies, because there seems to be more companies that fit that description than I can recall at any time in the ecosystem. And I’ve been at it since the late eighties.” 

Listen to the full podcast episode here:

https://www.alacritycanada.com/2018/09/19/bruce-croxon-on-episode-6-of-alacrity-canadas-between-2-term-sheets/

Episode 7 – Brian Kobus, partner at OMERS Ventures

Brian Kobus

Brian Kobus

“Startup creation and ultimately growing a big business in venture capital is a business of outliers. And that means that by definition, you’re not going to be average. I don’t think you should let whether you’re Canadian […] define anything about what you want to do and what you want to become, or whatever school you went to, or where you came from. As investors we’re always looking for outliers, people that are doing different things. There’s a lot of stats that get thrown out about investment activity, but what really matters is those very few that are thinking differently and doing things differently. And from an entrepreneur’s perspective, that may mean you’re more likely to hear “no’s”, and people finding reasons it’s not going to happen. But in some ways, if there’s too much consensus, you’re probably not seeing the world differently enough. There needs to be some contrarian element into what you want to accomplish.” 

Listen to the full podcast episode here:

https://www.alacritycanada.com/2018/10/18/between-2-term-sheets-episode-7-brian-omers-owen-matthews/

Episode 8 – Randy Garg, founder & managing partner of Vistara Capital Partners

Randy Garg

Randy Garg

“At the end of the day, this is a people business. You need to be networking. You need to be at the events.

“You’re entering into a relationship by the same token, we also look at the company to see who they’ve partnered with in the past, investors they’ve had along [the way]. Are they saying good things about them? Are they not saying good things about them?”

“We want entrepreneurs to own more of their businesses at the end of the day. You’re the ones putting in the 80 hours a week so you [should] own as much of the business as possible. Equity is very important, but do it at the right time. Optimize your capital structure. There’s other alternatives out there. And you, as the entrepreneur, deserve to own more of the company. I cringe at these companies where it’s a great company and they’ve done incredibly well, and then you look at the cap table and there’s – as they call it – the “alphabet soup” of venture capital on top, and you’ve got the entrepreneur’s single digit ownership in the company. It’s too small a piece of a big pie.”

Listen to the full podcast episode here:

https://www.alacritycanada.com/2018/10/31/between-2-term-sheets-episode-8-randy-garg-vistara-capital/

Episode 9 – Sam Haffar, partner at Real Ventures

Sam Haffar

Sam Haffar

“Great entrepreneurs don’t need venture capitalists. Venture capitalists need great entrepreneurs.”

“We [at Real Ventures] strive to be the source for great entrepreneurs, and I think to be that source we have to work really, really hard. Our view is that we’re always chasing. We’re chasing the best, and I think there’s a lot of people who come to us, and they’re great as well. But I think that when it comes to really ambitious founders with really big ideas, we work really hard to make sure that they feel comfortable with us, that we feel comfortable with them, and that we iron out all the details before we sign on the dotted line. And that goes a long way.”

Listen to the full podcast episode here:

https://www.alacritycanada.com/2018/11/15/between-2-term-sheets-episode-8-sam-haffar-real-ventures/

Episode 10 – Sophia Maize, VP at HarbourVest Partners

Sophia Maizel

Sophia Maizel

Sonia: “What we’re trying to embed into all our due diligence is the answer to the following questions: is this a ‘need to have’ or a ‘nice to have’ type of product? And what would happen to the business or this industry in a recession? That’s always a component of our due diligence, and we’re trying to stay disciplined around asking those type of questions.”

Listen to the full podcast episode here:

https://www.alacritycanada.com/2018/12/06/harbourvest-guests-senia-rapisarda-sophia-maizel-on-between-2-term-sheets-episode-10/

about alacrity canada

Alacrity Canada is a venture builder that supports driven entrepreneurs. We help create thriving companies & connect them to our global network of expert investors & mentors.

To explore more of our content, visit the Alacrity Canada Blog page where you’ll see Alacrity’s podcast on early-stage tech investment Between 2 Term Sheets, and our cleantech podcast series, Cleantech Talks. Follow us: @alacritycanada on LinkedIn, Facebook, Twitter and Instagram for the latest in tech news, and information about upcoming events.

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