"Asking for help is a strength is not a weakness. Asking for help is a strength. And we need the entrepreneurs to ask for help more than they do today, and they have to ask for help earlier than they do today."

- Bruce Green

Bruce outlines what he looks for in a start-up

Talk Takeaways

Bruce Green discusses his 37 years in corporate background, his journey into angel investing, how the exit is his driver in investing, his over-all strategy when in comes to building out his investment portfolio.

Bruce offers insight into how angel groups collaborate with one another and how startups / entrepreneurs can leverage this. At the end of the interview, he has shared his golden nugget on what would drive a startup to be successful.

About

  • Inspired Investor/Advisor focusing on high potential early stage start-ups.
  • Canadian – Silicon Valley representative for companies looking to launch and establish a market presence in the US.
  • Over 35 years of Corporate leadership including Capital Management, Strategic Planning and Operations from Concordia University.

The full #OPNAskAnAngel talk

Jeffery:
Bruce, welcome and thank you very much for for joining us today. i’m excited to to share and learn more about how you’ve been investing over the last few years and maybe just to start it off, why don’t we jump into — maybe you can give us a quick little brief background on yourself, and then we’ll jump into a few questions.

Bruce:
Great, thanks so much. So for the last four years I’ve been an active investor, an active angel investor, early stage investor, and i also invest in the markets. I’ve always had an entrepreneurial drive. But that said I had 37 years background in the corporate world. I was a corporate dude for 37 years but inside my corporate life I managed like three and a half billion dollars of capital inside the company and i invested in projects in the company. So I was in Bell Canada. So telecommunication, so we have to build out some infrastructure, we’re going to lay out some fiber optics, we’re going to roll out a new product, or a new service, or a new offering, we’ve got to build a call center. I looked at freaking thousands and thousands of business cases over my life right, but they were all internal, internal. Like how is this gonna — ? What kind of a return are we gonna get on this investment? What’s the NPV look like? What head count is it gonna reduce…? What kind of productivity is it gonna drive what kind of customer, customers, are we going to attract? So I always did that inside with a company, using the company’s money. Which was a little bit easier. And on the side i invested in the public markets. You know and and it was toward the end like I was getting ready to leave, i wanted to do something different, i wanted to be free, and i wanted to kind of get it because my wife works in the entrepreneurial world. Oliver’s clients are successful business owners and that attracts me a lot more than the corporate world. So I left and I had already established a little bit of a bridge with angels and had started already investing in some startups. So it was a really easy, easy transition for me. And it’s one that I feel very grateful for having had the opportunity. I like being freer and i like the startup world, and the energy, and the opportunity there, so that’s a little background.

Jeffrey:
No that’s great! When I was reading up on you and i’ve learned a lot about you over the the last few years through Spark Angels and I was reading up and there was a lot of great compliments to yourself. About exactly all those things that you just stated around how you were able to build very energetic teams to build out products and help support Bell Canada’s initiative so that’s awesome. So the first kind of question is you know what you talked a little bit about it but what got you invested in startups? What’s made you look at instead of helping maybe just purely from a help standpoint, as you moved out of Bell what got you in investing into early stage companies?

Bruce:
Yeah so I’ve always been an investor. And you know the public markets are interesting, but you’re a million miles away from it. And it’s it’s more exciting I find when you invest in a an early stage startup company, it’s a lot more personal, you’re closer to it. You can look at the eye, into the eyes, of the CEO or the founder. You can kind of get an idea of read their energy, you get a a sense of what it is they’re trying to do and where they want to go and so there’s much more direct relationship in terms of being able to help them. There’s also you know if you’re fortunate and everybody wins, there’s an opportunity for some fantastic wins and returns. I think entrepreneurs are the engine of the economy, you hear everybody say that right that’s what we need, we need small business, we need entrepreneurs to keep things going. Anything I can do to help them realize their dream for me it’s just kind of like when i manage my teams in the past, like I wanted to see them win. i didn’t care about — I just want to see them win anything and everything I can do to get a smile on their face and get that and for them to get a win it makes me feel good. And i get that same buzz really from the startups and the founders that I meet. So connect, collaborate, create. Those are the three things i like to do. And if I can do that in a way that helps people move their dream ahead then I’m all in.

Jeffery:
No that’s awesome! You and I totally commit to that same philosophy. When you have 97, 90 of of the world made up of early-stage startups, you know they’re supporting so much of the economy that we got to do a lot to kind of help support that. And it’s people that work their way through the system that start to learn and say how can I really give back and how can i get in there and support it and your household obviously accommodates that which is amazing. So when you’re kind of going through this and you’re figuring out you want to start to work and invest in startups, what was the trigger point that got you invested in this? Was it you met someone that was already investing in the startup world? Were you approached by someone? Like what was the the trigger outside, I guess your wife obviously played a big part in this in her role, but was there a trigger that said you know what i got to get into this full-on, this is really going to be impactful?

Bruce:
Yeah so it kind of happened by accident. You know sometimes I think what you’re looking for, sometimes shows up and it just happened to be a brunch. I was out, Shannon and I were out or brunch with Gary Einenham and his wife. And his wife was an old family friend, I grew up with her and we were — and then (inaudible – 5:57) and I just thought so I hadn’t met i hadn’t seen him for a long time so I was just asked Gary what do you do? So he mentioned that well you know I’m part of this angel group and he was telling me a little bit about it and I was inspired by it. And so he invited me out to a meeting. So i went out to Ajax, right… Which is like the middle of nowhere for me. But I went out there and and I went to the Spark Angel meeting and I met some cool guys and I thought this is freaking great! This is great, this is awesome, I want to be a part of this. So I’ve rarely missed a meeting since then right, I signed up right away. And I became part of the group. I love the guys that are in that group. You can see everybody is there for the right reason, they all want to help, they all want to contribute, they all want to help. They they have such a diverse set of backgrounds and skills so everybody brings something to the conversation and so I gotta thank Gary for it. And you know Gary’s helped me make a lot of money.

Jeffery:
Well Gary’s a good man. I’m a big fan of Gary too. So that’s a great way to to get brought into the field. And I found that in interviewing a lot of early stage investors, a lot of them have a very similar story that they kind of just fell into it. You know life was changing, they were going there, and all of a sudden boom this was in front of them. They jumped right into it and they went full into that’s amazing. So a great way to start. So what’s your favorite part of investing? There’s obviously the money, there’s all these things that kind of go around but what’s the piece that really intrigues, interests you the most?

Bruce:
My favorite part is — I love the story. My favorite part of investing i love the stories. I try and understand why somebody thinks this is a good idea, like what is it that you’re doing, what are you trying to achieve, what’s the problem you’re trying to solve like why and and i like sort of just like to try and get inside their head, the founder’s head, and understand what it is that’s driving them and why do they think this is going to be successful and make a difference. And you know sometimes I don’t get it right, and sometimes it’s like man this guy’s on to something and I want to help anything i can do anything and everything i can do to help this guy succeed and reach his goal – i’m all in. So i have to really get that kind of connection for me to to engage but i love the stories. They always have over time, they always have twists and turns, and ups and downs, it’s never a straight line. It’s not like you give them you know a couple 100k they go and build some software and then they’ve got customers and everybody’s happy. There’s always twists and turns, and ebbs and flows, and you know every now and again they got to reset they have to pivot. So I love seeing the entrepreneurs and ride that journey with them. And of course my the favorite part I guess is the reason the angels are — why we’re there in the first place really is that I love an exit right. An exit is a beautiful thing. And I’ve been fortunate to experience a few and they more often than not are surprises, when you’re least expecting it, something happens out of the blue. And it’s you know – it’s cool.

Jeffery:
Yeah that always is an exciting part, it’s like a little early birthday gift or something if you will but i do like the fact that you created around the story and the story is what creates the drive. And when you have that and you can really understand where they’re coming from and jump inside of that story and work with them. I think that always creates a great potential outcome especially when you get a lot of people with different insights into how that story can shift. And like you said at Spark you’ve got a lot of different ideas and people that come from different domains, and having them jump into that same idea and that same story can really help bolster it make it a lot bigger and successful.

Bruce:
Can i tell you about one that was probably one of my very first meetings, JP. So i’m looking around the table and there’s you know probably about 30 middle-aged dudes like myself and this young guy comes in to pitch. And so i’m flipping through the material and it was about gaming, right. So it was Menashi so I’m looking, I’m flipping through this and this guy’s video gaming and i’m looking at the table i said holy smokes this guy’s in the wrong room, right. It’s all a bunch of middle-aged geezers here, I bet you nobody in this room, myself included, has ever played a video game. And he started talking about his dream, his vision, his company and what he — and and his passion, and what he loves, and what he wants to do, and what he sees as as an opportunity, and where he sees the future of video gaming going. And then he starts talking about numbers, i started making notes. He starts talking about numbers like the number of people that play online video games, and all the stuff; and and it started to become flabbergasting. And it was still, I think to this day, it’s the only time at the end of his pitch when Malcolm asked is anybody in the room interested in learning more, every single person put their hand up. First of all he was — first of all, you knew you could see this is a guy who knows what he’s talking about. He’s absolutely passionate about what he’s doing. The size of the market and opportunity is mind-blowing, even though before that morning — but before that day, i had no i didn’t know anything about it and all sudden it’s like this thing is staggering i can’t like it I couldn’t stop myself from learning more, and more, and more about the industry and what was happening and so that was one of my very first investments which ended up being a bit of a treat.

Jeffery:
Yeah they went IPO or eventually…

Bruce:
RTO, RTO, merger, IPO and yeah onward and upwards. So that’s one. That it’s just a great story. Sort of pulls you in and it compels you and you start to follow it and you’ll learn a lot about it and then you find ways of contributing and helping, sometimes you’re just a passive observer and you cheer them on, you know there’s different roles for angels depending on the business and the opportunity in your background.

Jeffery:
Agreed and that’s a great story. For enthusiast gaming, I came in a bit later but the same thing big fan, jumped right in and very exciting. But I wish I was there for that first story because i think that that would have been very compelling to watch and to see but that was great for sharing, thank you. So now you’ve kind of gone through this cycle, you’re seeing pitches, you’re learning more about why you’re inside of this or getting through it, is there a set number or a schedule, or how you look at how many companies do you want to invest in a year? Do you have that tallied out? and from all the interviews everybody kind of has this real strategic way of how they were looking at the year and say okay i’m going to do five or I’m going to do it this way, is there, do you have a philosophy or anything that you stick to when you’re investing in companies?

Bruce:
Yeah so I try not to jump on every shiny object because I’ve got this nature that would be easy for me to do that. I have to — like you know — so I’ve over time developed a filter that I use to determine which companies i want to invest in and which ones i’m not interested in investing in. I probably jump on like three to four new companies every year. And i know that you will ask later on about follow-ons and things like that because what happens. Once you start building up a portfolio a couple of things happen, the companies that you’ve already invested in have come up with a second round or a third round or something and you know — i’ll talk more about that later but yeah so i try to like three, maybe four, new companies a year. But you get to a couple of things happen one is you start to get too many so you can’t pay attention to them, and I think it’s important to stay on top of you know — you can’t, they can’t, be 100% passive you got to pay attention and you know follow up and see how they’re doing. So i probably have about 12 or 14, right now. Some have already exited and moved on and some new ones have come in. I’ve got about 12 or 14 companies. So two things happen one is you don’t want to get too many, you don’t want to jump on every shiny object, you need to be selective, and eventually also these are the liquid investments. So you only have so much money, you have to decide how much money you want to throw into this asset class, right. Like how much of all my you know, my cash how much of it do I want to have you know that’s illiquid. There’s no market for it you got to wait, you have to be patient, you got to wait for something to happen. It may or may not happen somewhere down the road. And then I also spread it around to different types of investments right, so like I’ve got some of them are angel investments things that i saw at the Spark Angel or York Angel or GTAN and in all those different groups that have brought opportunities forward to us. I had, through the network there, I’ve met a lot of people and I’ve joined other groups and I’ve participated in larger the more venture capital sort of stage stuff so like with the Bright Spark group, I’ve done a couple of deals with uh mark and the guys at Bright Sparks. You know through people that I’ve met i got connected into this group that we get to get in early on unicorns. Investox is a big firm out in Vancouver and they get pieces, they get to buy inside their shares of large companies like the best one that i got there was Spotify and Music. So first of all I love, i love the company, i love the product, i had an opportunity to invest in it before they went public and i did it. And you know so but that it’s a later stage you get in at a later stage so when they go public then you get I got like two and a half times a return instead of some of these smaller companies and they go public you get 10 or 12 times return. So there’s all kinds of different things when you get in at a later stage, there’s less risk but there’s less return. you get in at the front end, there could be massive, massive return. There’s a lot of risk because there’s a fantastic amount of unknown and uncertainty.

Jeffery:
But you’re diversifying well right. What you’ve kind of laid out there is that this is an asset class and you can’t just dive everything into it you’ve got to be sparing to figure out what goes in here where can i get some mid-tier stocks, can i buy into another company that might be as you mentioned unicorn. There might be some other things that you might get into that are outside of the whole stock markets and early stage companies but you really do have to diversify and i think that balances out your portfolio and being able to manage that i guess that number and that amount of dollars will then lead into the fact that you’re able to make sure you can reinvest so is there a percentage of reinvestments that you look at doing as well?

Bruce:
Yeah so every time so you know, you get new money comes in. Sometimes you get an exit, you get money from that and then you got a stash that you get to redeploy back into the space. And you start to get a nice little cycle going. And it takes a while obviously for that to build up and for it to happen but i know i remember talking to a guy early on and he said that the problem why some of these angel groups need to keep on recruiting new angels is because existing angels run out of money. You know you’ve invested in 10 companies nothing’s happened. You haven’t had an exit and then you start worrying like am I doing the right thing or do i just need to be more patient. As soon as you get one and one pops and some money is freed up then you’ve got the cash and the stash ready to go and look for your next opportunity.

Jeffery:
And that’s great that you’re looking at the future of that because a lot of the times I see with investors is that they’re kind of a one-time onto the next, one time, onto the next and they kind of forget that it also looks good when you reinvest in a company. It also gets de-risks for the rest of the investors that are coming in at that next level so if you came in at early stage and now it’s at a pre-seed, now it’s at a seed, if you decide not to go back in, there’s other investors looking at that and they’re asking hey are the other investors coming back in — well why are they not coming in. And it actually does help de-risk a lot of it when they see that investor has gone through at least one or two stages. It makes a big difference in helping that company secure that next round and really at the end of the day that helps your companies from failing. A lot of the times they’re not at the stage where they can get through without that extra liquidity.

Bruce:
Something that you mentioned there JP I think is really important is that there’s a a fair bit of collaboration between the angels especially the group of guys, the good group of guys, that I was fortunate to meet up with at Spark. So there will be often a company that maybe four or five of us all went in on in the early stage and then they’re coming up with a second raise, and so we have conversations what do you think are you going in — what are you doing — and so we talk about it why do you think this is a good time now. There’s different reasons that companies have a second round right. There’s good reasons and bad reasons. Sometimes they need to because they’re running out of cash and they just need more money for sort of to complete what they started. Sometimes it’s a beautiful thing because they need money because they need to keep because they need to — they’ve already developed their product or service or software or whatever they developed and now they need money to meet customer demand. And when you see something like that, when that kicks in, i’ll give them as much money as I can. Because actually, now, you’re not funding the development of the company you’re actually funding the growth of the of the company and you start getting closer and closer to a reward. You know each time you go in the valuation of the company has changed so you know the return, you’re going to get on those later stage investments is a little bit less but i would say the risk is also considerably less. So it balances out nicely.

Jeffery:
For sure and you’re also getting like you mentioned the group thing, you’re actually bringing a lot of these investors together to help prop it up and the more investors you can bring into an opportunity, the more interest they’re going to have at the next opportunity, the next opportunity, and it really does benefit that early stage company to know that they’ve got four or five or ten people that are really interested in what they’re doing to support them. So you’ve kind of structured your investments, where you’re going to go, on the the dd side, going into the deep dive are there certain criteria that you look for that you really like to make sure that you have in order to make this investment? And i look at this from there’s two sides to it, there is more on the paperwork side and then there’s of course on the team or other areas that you might think outside of your standard dd materials that you look for?

Bruce:
So well I guess the DD is the most important thing right because you know that’s the commitment. That’s where the rubber hits the road. It’s either you’re in or you’re out. But once you’re in you can’t be half and you’re all in, right. They got your check and they cashed your check. Yep so the DD obviously starts with the founder, starts with the entrepreneur. And I have to like the person, right. I have to believe in the individual. It’s nice to hear a little background in terms of where they’ve come from and what they’ve done in the past. But i have to believe that they’ve got what it takes to turn their idea into a success story. And so you look for like you know, they really know what they’re talking about, they’re they’re knowledgeable in the space, they’ve got passion, they’ve got drive, they’ve got tenacity. You have to find an entrepreneur who’s strong and clear in terms of what they’re trying to do but also somebody who you believe is going to be coachable, who’s prepared to learn along the way, pivot, and make accommodations and adjustments if they’re required.You need people absent ego. If the CEO looks like they’ve got some kind of an ego and they think that they know everything, and they got it all figured out and just give them the money and it’s a guarantee — i’ll run as fast as I can. A zero ego, somebody who’s prepared to build a team with people, surround themselves with people that are stronger and smarter than they are. That’s how you build great teams, right. And give somebody who’s going to give the other people, the team members, the credit. I have to believe in the CEO 100%. And then the idea has to be scalable. I have to believe that this thing can catch on like a wildfire one day. Like a good old Australian wildfire. i see so many pitches that a lot of them are good ideas like usually they don’t make it that far with a bad idea that they kind of in front of the room and they’re telling you about their idea but a lot of them I find are maybe they’re too nichey. A niche isn’t necessarily a bad thing because there’s some large niches but some of them are maybe a little bit too nichey. Some of them i think are good. This could be a good business but not a good investment. I don’t want to invest in something that’s going to provide a guy a good job and income for the rest of his life, you know what I mean? Create a nice little business and you know you’re going to make a couple million bucks, he’s going to make a couple million bucks a year and it’ll roll on. But if the thing has so you have to look like how is this company, is this idea saleable. Like most of these i would say the majority of the exits that we’re going to see from these companies is somebody buys them out. I don’t think very many of these early stage startups actually make it to the IPO stage. If they do it’s super cool. But you have to invest in a company that — at a company that i think once established it can scale fast and it has to scale and that’s really what i look for. I have to believe in the CEO, i have to believe in the idea, i’d have to believe that it’s going to scale, i have to believe that there’s going to be an exit.

Jeffery:
Those are four great pieces and i agree 100% that when you start to look at the idea, shapes around the CEO can they see a vision of growing this really big and scaling quickly. Do they have the right people, can they get the right people and are they too niche that it’s not going to allow them to move… so those are great, great things to look at when you’re going through DD and diving in and sometimes when you’re in the DD, you’re, again, in with these larger groups and there’s a lot of ideas, a lot of comments, a lot of questions bouncing around and it’s interesting as you’ve mentioned by putting ego aside how fast you can find how they can adapt to all the questions, and how they’re maneuvering in and out of all the data that’s required for them to move forward. So it really does give you a good idea on the tenacity, the passion, the drive, and how hard they’re gonna want to build the company because you know they don’t want to give up because they hit a little bit of a hurdle. So i think some of those things come out during DD and along the way so it’s some great four things to look for, a hundred percent i love that. Inside the investment portal, now you’ve kind of gone through this journey, do you look at leading rounds or do you tend to work with the groups that you mentioned and kind of all lead together how do you look at that scenario?

Bruce:
Yeah so looking at leading rounds JP, I really know myself well. And i hate administration. It’s not my thing right, it never has been. And i know my strengths and i know my weaknesses and when it comes to leading a round, leading around is administration, you know we have to be committed to doing it. You have to — it’s chasing people down you know, making sure that they read all of the documents, that you get the doc, you send out the docusign packages, and getting everybody’s NDAs back d and getting the checks in and you know reminding and nudging and following up so it requires a lot, it requires a lot. If you say that you’re going to lead the round, then the entrepreneur, the business of the entrepreneurs put a lot of faith in you and you gotta, you have to deliver. And it’s just not my thing, I’m not good at that kind of stuff. I’m an idea guy, i’m not a paperwork guy, an administrative guy. So i would say so in terms of leading around I’ve never done it, I’ve helped a little bit, chase people, i’ve helped a little bit. Also i would say because when I was reading your question I say never say never. I’ve learned that lesson and i’ve had to learn it over and over and over again with myself right. I say never say never because there could be a time when i see a company that i just feel so strongly about that i would do anything to help them get get off the ground and so i would even maybe break my own rule there but it hasn’t happened yet.

Jeffery:
Well I’m sure there’s a company out there that’s going to hear this and they’re going to come after you and find out how they can get you to lead. So I’m sure you’d do a fantastic job at rounding people up especially like you said you haven’t done it. So that puts a real big flavor to someone wanting to get you in there because you know you’ll do a a great job. Is there any preferred terms that you look for in an investment?

Bruce:
So obviously you want a good favorable terms. It needs to be a balance between — it has to work for the entrepreneur, it has to work for the investor. And so I have invested and i don’t know if i have a real preference. I just want to make sure that it’s fair and reasonable. Like, so I have some companies i have preferred shares right. Some companies i have convertible debt. Some cases I’ve provided companies with loans right with favorable — with very nice interest, the payments that are generating a nice return. Other times I’ve joined into limited partnerships you know with some of the larger VCS that build out these things like Bright Sparks would be an example. All the investments I’ve made in Brightspark would be through a limited partnership. So limited partnerships, preferred shares, convertible debt, convertible notes, and loans so i deal with them all right. They’re all different and they all have their pro pluses and minuses but depends on the situation. Different situations call for different structures.

Jeffery:
But it seems that you’re pretty flexible so there’s not a — you’re not interested if it’s a safe or as long as you like the company you’re going to work within their terms and figure out what’s the best value for yourself and your investment.

Bruce:
100%.

Jeffery:
That’s great. The other side of this goes to board seats as you’re making these investments have you taken a board seat? Do you choose to take board seats depending on your investment size or the amount, is that something that you look for as well yeah?

Bruce:
So that’s something that I’m extremely interested in. It’s an area where i feel i can contribute and create value. So right now I’m on the advisory board of two companies, and I just like listening, i like getting an understanding in terms of where they are and what roadblocks are in front of them and looking for ways and help them think different and to think different and to crack the code and what to watch out for. I love like my business card says connect collaborate and create. I love connecting with the business owners, I like collaborating with them and I help them like i love helping them create new opportunities and i think my background especially for my corporate life when i was looking at you know thousands of business cases inside the company i think that positions me well to be able to really add value and contribute to make a difference in an advisory board type position. So i’m doing that, I like to do more of that. There’s a guy that i follow Keith Cunningham, I love that guy. You go and he’s like tough love and he talks about the role of the board is really to watch for dangers right and ask the difficult questions and watch for dangers and anticipate what could blow up and make sure that you’ve got contingency in place so that you can manage unforeseen challenges. The other thing that I’ve learned in my past life that i think I could bring to board position is I’ve understood the importance of focus. Focus, focus, focus. You’ve got to have a target, you gotta have a clear defined plan to hit achieve that target, you have to have KPIs that you’re going to measure and track to make sure that you’re getting there. If you don’t know where you are and you don’t know where you’re going, you know i’m not clear in terms of how you’re going to get there — like you see companies sometimes that are in those positions so you have to be crystal clear you have to be honest about where you have to be honest about where you are and you have to be clear about where you’re going and you need to have a a defined path and a team and the resources that are going to help you get there and those are all the things that i can have with companies that i think benefit them and the discipline that i think is required for company to be successful and i think that’s the role of the board.

Jeffery:
well you touched on a lot of points there and you’re you really steered it to all of these other elements that you helped see and envision while you’re on that board seat and I think that is really conducive to as you mentioned your background by being able to work with a lot of different companies and a lot of different plans or projects that allow you to kind of see is this going to have a good result, is there a KPI that’s going to make sure that this makes money so that you can bring that back to that startup and I really i love the three things that connect collaborate and create i think those are really great terms that help a focus get into an entrepreneur’s mind and when you’re starting to work with them deciding how you know right now this is where we’re at but we got to get somewhere and we all have to work towards something and i think a lot of the time startups don’t always think that they’ve got to be somewhere, they’re just hustling and bustling around and they don’t think that if i set a target or i don’t set somewhere to go i’m just going to get there and those little targets turn into big targets and they become a very much accomplished when the team can get behind them and they can all believe in the direction that they’re going. So being able to bring that to a board seat but also looking for that in the CEO is really an amazing feat to have. And i love the crack the code I think that’s key to any startup is helping them understand how they can crack that code. So you’ve talked about a lot of different things that you kind of help bring to the startup, is there any communications that you like or ways that you want the companies to be able to help you stay in tune? So the outside of a board seat is there other things that you’re looking for to make sure that you can help when it’s needed or before it’s even needed?

Bruce:
Yeah so what do i see in in the way companies communicate, so i’ll tell you JP — that was my number one early dissatisfaction as an angel investor. Number one I almost decided not to continue as an angel because i thought this is like goofy. Like you’re writing checks, you’re giving all these people money that i earned and then they go dark and you have no clue what’s happening. I would say the majority of the startup companies are lousy communicators. I’ve had conversations with all my angel buddies and with Malcolm and the people at spark angels and i said you know there should be an expectation that there’s gonna be some communication that comes back to you. It doesn’t have to be onerous, it needs to be like it’s just a simple like a KPI. The same kind of like KPIs that they report on every quarter. Once a quarter would be fine. Could be a nice little one pager and it can be a nice standard thing. i’ve even drawn one out. Like — what are you aiming to achieve the next 90 days? What are the challenges that you see in front of you for the next 90 days? What are the resources or what helped you need to achieve those goals? Right and then it just had a nice simple thing that was repeatable and it was every 90 days and you sat down. I don’t think it’s too much to ask the founder to sit down for a half an hour a quarter and just update their 90 day vision so what did I achieve over the last 90 days, what went well what didn’t go well, what am i set out to achieve for the next 90 days. And then in terms of the communications and partnership really that i believe is important between the entrepreneurs and their investors is that i don’t think that the companies ask for help as often as they should. Or they could i don’t even know if they realize the resource that’s behind them in that room, and it doesn’t even have to be investors. So let me give you an example. If we have 30 angels at York or it’s at this the Spark Angel group we’ve got 30 angels that are there, and six of us invested in a company the other 24 guys would be more than happy — people love helping people — and the other 24 guys even if they didn’t invest in that round in that last round or something like that, if somebody needs somebody who knows something about logistics, or somebody needs somebody who knows something about getting some a part manufactured in China, or somebody needs to know how do you get your product on a shelf at a hardware store, like people if somebody needs somebody, who knows how to get, maybe it’s a legal thing right, — like how do i protect myself, how do i get some protection on my on my idea — everybody wants to help. You know they’re dying to help and it feels good to help and the business so communication they should have a 90-day plan, they should have a 90-day KPIs, they should tell us what happened in the last 90 days, just tell us what’s happening in the next 90 days you know, how full is the funnel, blah blah blah and they should say i need help. These are the three places that this is what i want to do for the next 90 days, these are the three areas i could use some help, be more than happy to have a conversation with anybody who thinks that they could pitch in. that’s a long-winded answer to your question it’s crystal clear to me you can see through my voice that I’m massively frustrated because there’s a huge — you don’t have to go out alone there’s so much support and it’s free.

Jeffery:
Yeah it’s a very tough space when it comes to communication and I think if you look back at when it all, where it all, starts with the the company going and looking for funding — this is all new to them. And then this part of communicating back to share what’s going on the business I think that also becomes quite new to them. So nobody wants to share fails or things that are upsetting or things that don’t work well. So i think it kind of goes back to what you were talking about before was the type of entrepreneur that you get to invest in or the one that you’re working with, i think that rapport plays a big part I helping them better understand that here’s how we need to be able to communicate because if you do we’re going to catch a lot of this stuff beforehand and as you mentioned you’re on a couple boards but you can’t be on every investment boards so you’re able to only help the ones that you’re really deep in and helping but then there’s all the other ones that don’t get that same intrinsic value because you’re not in the inside loop if you will so how do you get them to still look at it the same way and say how do I get my problems out so that people can help answer? how do i use the room of all these people more frequently.? i think that’s just a mind shift. It really is a tough one and you’re right, it’s not the first time angels have said you know what no one wants to tell me what’s going on and then i find out at the very end that’s terrible because then I couldn’t help them.

Bruce:
When i was younger, I was taking flying lessons and my instructor told me one thing that stuck with me and i can apply it all over my life. So we’re sitting on the runway Toronto island, it’s over at Toronto Island Airport, we’re sitting on the runway and he said what do you call the runway behind you? I didn’t know what he’s talking about, he said you call it useless. Whether it’s a takeoff or a landing it’s useless, you can’t make use of that right. And so that’s the same thing with what we’re talking about here, it’s what can you when you find out three months later that the guy was struggling with something that you could have helped with right? When people asked and and this was my only thing with my team members when I was a leader and i told my team members the only time i’m ever going to get mad at you is if you don’t ask for help early enough. And asking for help is a strength is not a weakness. Asking for help is a strength. And we need the entrepreneurs t ask for help more than they do today, and they have to ask for help earlier than they do today.

Jeffery:
Now that’s great and you’re right asking for help is a strength. I love that I’m gonna use that line i think that hits it home right there in whole discussion from there. I think just because we’re kind of getting close to wrapping things up, so I’m going to ask two kind of final questions for you or maybe three because I really want to know has there been, based on the COVID side of things, have you seen as you have you shifted your investments, are you continuing to move forward just as is nothing’s really slowing you down that you’re looking for great deals or how has that shifted in the last three months?

Bruce:
I think for all investors, myself included, it’s changed things a lot. I think the breaks have gone on. And you know, I have personal experience right now, I’m trying to help a company raise a couple million bucks and we’re within like a couple hundred thousand dollars of our goal, and it’s brutal, it’s impossible. We can’t get it. And no one is all willing to — you know people that i know that would be able to write that check in two seconds before, with just a simple conversation — everybody’s sitting on their wallet, “no I’m just gonna wait it out”, “I’m not quite sure right now”, “I’m just gonna you know take a bit of a pause”, so it feels like the environment has changed, it’s not, it’s not an easy environment to raise funds in right now. Me personally, i’m probably more inclined to help the companies that I’m already invested in over the next hump versus jumping into something completely brand new and unknown to me. So I think yeah the environment has changed and I think it’s difficult, it’s a difficult environment to raise money. Obviously if something just showed up in front of me and I thought, you know, it met all my criteria yeah an that really I felt engaged and inspired by it i would do it, i would never say never right.. but I would say that the environment is tough right now for raising funds.

Jeffery:
No and duly noted it is, it really has shifted a lot and it’s still looking for opportunities and great opportunities and then from there deciding if it’s gonna be a good one or you’re gonna have to wait it out a little while and things have shifted a lot you can see it everywhere but that’s good to know. So the last two questions i have and this one’s always an interesting one, in all of the time that you’ve been working with startups and you’ve been investing in startups and everything that you’ve kind of learned in the last 40 years of working in big business, is there one or two things that you see from the exits you’ve had and the companies you’re working with that really stand out as being exceptional pieces that other entrepreneurs can say you know what I really need to have this skill or I really need to have this that’s going to make my business successful. Is there something that you can pinpoint on that really changes things around? Like you’ve named a lot of things from tenacity and agility and being able to to maneuver and being passionate so those are some skills but is there something that really stands out around how to be successful as an entrepreneur?

Bruce:
Well you know again right away you have to have a great idea. You have to be solving a real problem. If you’re gonna go into a space, you’re not gonna go in there with an idea that’s gonna be two times better than what anybody else has got out there, you wanna go in there with something that’s gonna be ten times better than what somebody’s got out there. It has to be materially different and better. You have to create space, you have to create space between you and the competition and the way you do that there’s two ways. One is that you you have an idea that’s ten times better, ten times faster, ten times simpler, ten times more meaningful, ten times whatever. And then you know you differentiate yourself in such a way that you got a massive moat around you where it’s not an easy thing for somebody to copy or follow that’s even more powerful than having IP protection like who cares about all the legal blah blah blah. Win in the marketplace not in the courts. You win in the marketplace by having a product or a service that’s ten times better than anybody else’s catch me if you can, right. So they have to have that and they have to build great teams. They have to build great teams and you know hire the best and they have to be focused and all those things that I talked about right. You got to be focused, you got to track like small wins, you got to celebrate, establish, track, and celebrate small wins. It’s a series of small wins that gets you to the finish line. And yeah so some of the exits that I’ve seen you know and obviously back to my other favorite it’s got to be massively scalable right. So like I invested in this company i saw right away the guy had a cool thing I knew exactly what he was trying to do. It didn’t exist, nobody was doing it, it was cloud computing, in the cloud computing space, the company was called HTBASE and he got bought out by Juniper Networks. Boom! Within a year and a half of investing in this company because the guy had the secret sauce he thought of something, he saw an opportunity that nobody else had noticed and he was first to market he was first there, with a solution that worked and and it was brilliant you know. We talked about the EG, those guys sort of like snuck up on a growing theme and are are making the most of it. I don’t know if i answered your question.

Jeffery:
But yeah no you totally did and you worked in a few different spots to it. You’re right that it really does com down to that drive of the CEO, the scalability, the idea of being able to find something that’s unique and sets them aside, creates a moat around them so 100% those are all great, great pieces.

Bruce:
if i can add on just to set for a second JP. That one conversation that I’ve had with a couple of the founders, as I say that i want you to be passionate about what you’re doing, and I want you to love what you’re doing, but I don’t want you to fall in love with it. Because if you fall you know what I mean? It’s like there has to be an exit. You know it’s a lot, it’s kind of the company reaches a level of maturity where it’s better in somebody else’s hands than staying in your hands.

Jeffery:
The judgment becomes clouded sometimes I find that when i first started investing myself, I looked at different angles on the way the startup was and the people that came in it to make money and sell it versus the people that were solving a problem that they faced. The people that were solving the problem that they faced had a harder time seeing the real problem in a bigger picture and a scalable problem. It became a passion love project and it was hard for them to let go of something because it meant so much to them, Whereas the person that found the problem, solving the problem but was in it because they were seeing the end of the rainbow, if you will, they tended to not be as connected to it, but were so passionate about knowing the field, knowing the understanding of the logic, understanding the sales cycles, understanding how to close people, they were really driven to get in there so it kind of started to take me back from you know, i’m solving this problem because i live through this versus i’m solving this problem because i see this happening to everybody and it’s something that i want to tackle and fix. And there is a big difference between the two.

Bruce:
The role of a CEO changes over time as a company matures. At the beginning you’re a jack of all trades right, you’re the accountant, the sales guy, the marketing guy, the coder, the software coder, you know… Then you become more of a manager, then you become more of a leader, then you’re actually overseeing the company, you’re leading the company. So the role of the CEO changes over time. Some people can make that transition, and some people can’t. Some people don’t know how to let go. And so that’s important. Helping is going to make it out on the other end and become bigger than the vision that they had in the first place.

Jeffery:
Yeah you got to figure out if you’re good at starting something and you can find the right person to come in and be the growth, and then somebody to come in to be the accelerator and then if you come back and clean things up, there’s always different ways that you can fit into a business. But a lot of CEOs start to look at themselves as just being that starter facility inside that business so those are those are great points. There are been a post and a couple questions, but because of timing I want to ask one last question and it’s kind of pull out your crystal ball time. Where do you see and look at the market, where we are right now, in the next 12 months. where do you see it going any areas of real focus that you think are going to pop out and then where do you see us in three years?

Bruce:
I think for founders and startups I think you need to step back and reflect because this COVID’s been a bit of a punch in the face. And it’s shaken things up and i don’t think return to normal is what we’re gonna see. I think things are always going to be a little bit different and I’m hoping different in a better way, i’m not saying in a negative way, i’m thinking in a positive way. But i think COVID has exposed opportunities and needs that if an entrepreneur can discover and leverage there’s some great opportunity. You know a lot when you look back three years, JP, when you look back three years and you say like what did the world look like three years ago and it looked and what it come as compared to what does it look like today — today it looks way different than it did three years ago but i think this COVID has accelerated everything. And in terms of things that were already changing, I think maybe that things that would have maybe changed over three years are maybe changing now in three months. Adoption of technology you know that might have taken somebody three years to get get there and get comfortable with else and they have to do it in a week. You know my wife’s company that was always on the back burner projects have come to the front burner through COVID. All of a sudden in there you find some gems, some surprises, some things that maybe wow you know I was always saying one day i was going to get to this but now the time, this is the time to do it, and so I don’t have the answers in terms of what like i’m not going to tell you, I don’t know, i’m only going to invest in biotech or i’m only going to invest i don’t know but i wanted like this it’s a new new world order. And the new world order is it presenting new opportunities ,and new challenges, new problems. I think for the people that get on that real quick and find a way to create value in a meaningful material way are the guys that are gonna win. Guys or people that can free you up. So that’s my answer.

Jeffery:
No I like it you know what it’s going to be, it’s going to be a quick change, it’s going to be a tough change but the difference is as you mentioned people are adapting so much faster now. So if you’ve got something out there that solves a problem if it’s in biotech, if it’s in future tech, it’s in whatever domain that you think is going to fit if people can adjust to be able to live through the COVID, they should be able to live through any sort of new change that’s going to come in tech and i think that’s really what is happening, people are adjusting quickly to the new norm, people are pivoting in their everyday jobs. Entrepreneurs are pivoting. Families are pivoting. Education’s pivoting. Everybody’s trying to find a way to fit. And if you don’t find a way to fit, you’re not going to survive. And i think that’s what I’m kind of getting out of what you’re saying is that you’ve got to fit to move on so if you can’t find it you’re going to struggle. So figure out where that is and move it, move it, and you’ll find yourself in a good spot in three years.

Bruce:
Exactly and it’s been really inspiring to see the companies that have been able to already pivot and adapt and kind of refocus and make a go of it right. And to recall that like some companies are growing like wildfire, some got really creative and did a quick pivot, some people are just using the time to think and regroup, and some people are you know not not as fortunate.

Jeffery:
For sure and that just takes time and some great experience for some great people to kind of help you so I think from today Bruce, I want to thank you very much for all of your insights. I got lots of notes, so i’m a big fan of everything you’re doing so thank you very much for joining us today. We’re gonna cut this up into little bits and send it out so we’ll do that over the next few weeks and we’ll keep you posted on that but I think there’s a lot of great things that i’m happy to share with everybody, a lot of great insights, and i think as a as a founder of a company that’s trying to grow and figure out if they can look for funding if they keep their focus, they find the right market fit, and they look at scaling, and they build the right team i think they got to be reaching out to you because there’s going to be a they’re going to be knocking off a few of the things that you’re looking for, and being innovative obviously is going to fit inside of that so outside of it inside of it I appreciate all your time. Thank you very much and we will put a pause on it and maybe we’ll come back and look at your crystal ball in a couple years when we do a follow-up interview.

Bruce:
Good show JP. Love what you’re doing. Thanks a lot. Have a great day

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