"Whether it be your own employees, whether it be to your stakeholders — communications is super important"

- Galen Udell

Galen outlines what he looks for in a start-up

Talk Takeaways

Jeffrey talks to Galen Udell on why he invests in startups, how he ventured into being an angel investor, his favorite part of investing, his investing goals, and the one factor that he sees could define how successful the startup is going to be.

Galen also looked into his crystal ball and has expressed his interesting investment marketing insights post COVID era.

About

As the Executive Director of YAI, Galen is focused on creating lasting value for our four stakeholders: our members, our partners, our ecosystem members and the amazing startups we encounter on a daily basis. Galen brings a highly diversified view to York Angel Investors (YAI). After a highly successful 25+ years with IBM Canada, IBM Corp (US), and Belden in the areas of new business development, marketing, and sales, Galen retired to start a second career as an entrepreneur, mentor and angel investor. In 2015, Galen founded Bark ‘n Yapp, a marketplace start-up that connects dog lovers to the businesses that love dogs. He also runs Novate Technologies, a consulting practice that assists startups with the development and execution of their go-to-market strategy.

The full #OPNAskAnAngel talk

Jeffery:
Welcome to the supporters fund Ask an Angel, and today we’re very excited to have a gentleman that has been working through the angel system over the last couple of years. I got to meet him probably… I’m gonna say three years ago. And in that time Galen supported us through our events at OPN and he has also worked through a startup that he had and now he is heading up the York Angels, a group. So a lot of transformation, a lot of great things. So I’m excited today to be sitting down and having a chat with you. We’re on a roll today, this is our third interview in total so far, Galen we’re continuing to roll these out and bring a little bit more face time to all of the people in the ecosystem, especially the angels. So thank you for joining and let’s jump right into it. So first question, why do you invest in startups? What interested you in it?

Galen:
why do I invest in startups? I think the major thing for me is the fact of working with really intelligent entrepreneurs that are excited and really trying to push a great idea. Not having kids myself, this almost kind of gives me the ability to mentor and take on working with a lot of younger folks without having that baggage of having to embrace them. You know she gets them at the good point where they really want to do something. And I think it’s the excitement working with those folks but also seeing new technology, seeing what’s coming down the pipe. I’ve always in my career been involved in trying to look as I say what kind of look around corners right, and see what’s coming next. And so working with the startup community and working with companies gives me that opportunity to see what neat and different ideas are, you know, people are working on that are possibly going to be hitting us in two or three years from now.

Jeffery:
Okay great! and that’s some great insight into you know everybody wants to follow the innovation so that’s good to get in at the ground level, to meet and learn more from the young launch foreigners that are coming through young and old. How did you get started investing, what was your first investment or what was the thing that really got to really gung ho about this and why jumped into it?

Galen:
The biggest reason that I jumped into investing in startups was the fact that I created my own startup and so I had left the corporate career and jumped into the startup world. It’s something I’d always wanted to do, it had been imprinted on me from my family where I had seen that happen. Where my parents at later stage and left their corporate lives and and then create a start-up in their early 50’s that became a very successful software company in Canada. So, you know, to me it was imprinted to come and take that entrepreneurial route out of corporate and I started to see that some challenges around getting the funding. I saw there were some gaps in trying to get funding particularly as an older entrepreneur. There weren’t nearly as many programs that are available from the government so you really are relying on I’m trying to get investment. And then there was a little, I found myself that there was a little bit of a ageism that was going on. In that people were willing to take a chance on an unproven younger person than someone say who had a lot more experience from the older side. And so kind of bothered me and I said, you know what I need to understand more about this whole investment angle so I spent a lot of time sort of educating myself on the whole investment ecosystem, and how it all works. And the more I got in that rabbit hole, the more I actually thought I would much rather be doing this and doing the investing side and working within the investing ecosystem and starting to work with more startups than actually spending a lot of time on my own startup. And so it was really that kind of got me excited. And then and as you start spending time mentoring, and working with startups, and becoming an advisor and getting advisory shares or starting to put your own dollars behind them, that’s kind of where the excitement comes. It almost becomes a little bit like gambling in some ways, that you’re taking stakes into organizations and so you kind of get the bug once you get going on it.

Jeffery:
Oh a hundred percent! Once you start diving into, you start finding a little nuances and ways that you can help improve and guide, it’s pretty exciting space for sure. What is your favorite part of investing? You’ve been doing it a couple years now, so what is that one key piece that’s really opened everything up and you really get jazzed about?

Galen:
Sure. I think my favorite part of the investing is really spending time with the entrepreneurs. Whether it’s… Whether I’m making the investment or not. I think it’s the spending the time to mentor them, to help them through what problems they’re facing. Typically I’m gonna go to market guy. That’s my my background. So the reality is the majority of startups will fail because they actually can’t do go to market, they can’t get to the market properly, they can’t make those initial first sales or they start the initial first sales and can’t follow up with that and so I do like to spend a lot of time with founders going through their go to market and and understanding what they can do and and how they can push in different directions or how do they find different entries into the marketplace. And so that to me is what I enjoy the most – that’s my favorite part of it. It’s really just spending this time and there’s a lot of affirmation that comes from that. We all love our ego strokes and when you see somebody have some success in the marketplace and know you are part of those discussions with them to help them get there — it makes you feel great. So the there’s a lot to give back .

Jeffery:
I like that there’s really is about a lot of attention that you can put into the operational side and getting people their successes by teaching those go to market strategies. And you’re right, there’s like anything, there’s a lot of moving pieces in a start-up and finding that one that you’re good at that you can really help push through makes a big difference for that startup. On average how many investments do you look at doing per year?

Galen:
It will fluctuate. Again, I’m relatively new into this. I started off as an angel investor three years ago at York Angels. And so the first year I probably looked at twenty opportunities and didn’t make one investment my first year which was kind of what I was coached to do, is don’t come in with two feet. Look as many as you can but don’t invest in them. And then, so the second year I invested in two companies that year, and then took on advisory roles in two companies that year. And then my third year I’ve done three investments so far this year, plus picked up another advisory position. And so I’m trying to build out, I think the philosophy is to build out a portfolio over you know probably a four year to five year time horizon of twenty to twenty-five companies that will give me a balanced portfolio. Balanced view of a five to seven year time horizon for some to start to exit. But you really do as an angel investor, the more investments you can make, he greater your chances of getting a winner are going to be. And you do need those winners to help balance off the ones that are not going to make it so you know to go in and think oh I can do this on three or four investments is not, that’s not, really gonna be successful you’re unless you know hit a hit a lottery right, and your first or second one scores big and you’re just playing with house money after that. But you know, you have to go in with the mindset saying I’m gonna invest over a period of time into X number of companies and and so what that X is up to you as an investor but and same thing as a founder talking to investors, is understand how many of the companies are they trying to invest in and and be a part of.

Jeffery:
Now that’s fantastic. You took a whole different approach to how a lot of investors look at it. They may say ‘oh I’m going to invest in five companies a year’ and what you’ve done is every year you’re doubling your investments. So the more you learn, the more you’re getting comfortable to start taking more investments on, more advisory roles on. So that you hit the goal of a certain number which i think is fantastic because then that way you’re open-minded to anything that comes at you. So I love that approach. That’s fantastic. Are there any verticals that you like to focus on?

Galen:
Yeah, that’s interesting. I’ve kind of actually changed. You know kind of less of the approach I’ve taken over the years. I first started looking at sort of marketplaces, which is where my startup was in. I’ve actually kind of pivoted off of that. In that I’m not sure I want to stay in marketplaces and COVID is probably teaching me that maybe that’s not the best place to be in. But now I co-invest (sic), my wife is now kind of joined our team, and and we’ve kind of taken this philosophy that we want to really only invest in companies that we see as being having positive life change for people. So whether that’s in health tech, whether it’s in something to do with you know mental recovery or mental health you know, so we really are looking for types of startups that have that ability to make people’s lives better. And not in a… This is more in a needs versus wants perspective. Well you know people need certain things, I need mental health, they need personal health, they maybe want to buy a new pair of shoes so I’m not sure I want to stay in the wants category and more in the needs category.

Jeffery:
No that’s great I was told a long long time ago, I can’t remember exactly when it was, probably sometime in my late teens or early 20s when I was playing with the markets and someone told me you should only invest in companies that you use and you believe in because if you’re using them, they’re solving your problem. If you’re just investing in everything else that it’s not solving your problem and you can’t control the outcome because you can’t, you’re not a user you don’t know what’s gonna happen with a product, you don’t know what’s going. So the same idea right, you start to find things that’s in your niche or things that you like to really gravitate to or as you mature and you’re investing, you start to see when there’s bigger buckets of problems and that you can start to focus and hone in on that so that’s kudos, that’s great. When you’re doing your due diligence requirements, is there anything that you like to look for before making a commitment? Are there certain factors that really set aside your DD that will help you cross that line?

Galen:
Probably the biggest one is the founder. I’ve somebody who’s I’ve spent a lot of time in my corporate life and even in my university life we’re really trying to understand people and and so I really started to look at this whole concept of who are the right founders and what makes a good founder. And so that x-factor that founder, is you know, we’ve gone into a situation unfortunate think in certain that can speak from a North American perspective, but you know corporate jobs are going away and we’re pushing we’re pushing University students into entrepreneurial life and not everyone’s set up for it. It’s not the best life, it’s a hard life, it’s certainly hard to be a founder. It you know (sic) the the suicide rates in the valley are pretty high in in the startup founder world and it’s a lonely it’s a difficult thing to be in and not everyone set up for it. And so to find that x-factor in somebody that the person who has that sort of warrior mentality, almost likened to a you know to a sports superstar right. They’ve got, they you know not it there’s.
People who can play professional sports but it’s really that person who’s that superstar right what does it take to be that, what is it and and that’s not, that’s something you’re born with. It’s just not ability but innate ability and so I’m trying to find those things, those people that are when they’re back’s to the wall that’s actually when they perform even better and and that’s a tough thing to find cuz there’s no test, there’s really no testing for it. It’s really spending time with those founders which is why I like to spend time with them before I make an investment. Before even to go to due diligence the more time I can spend with founders to get to know them and break bread with them and get a feel for them the greater chances out there that I’ll invest in that startup as well.

Jeffery:
So you’re taking the founder and you’re kind of diving in, learning a bit about how they work and figuring out how they work inside of some sort of when they’re in adversity, when their backs against the wall, is there any sort of paperwork that you look at it’s really important that you want to make sure if they have done? Is it projected forecasts, is it that they understand financials, like is there something else in there? Are you kind of just you know what, for now it’s you, later stages you might need some of that stuff but for now let’s just think to the founder.

Galen:
Yeah it’s hard. Like at the early stages I mean you know, you’d be aware of those you invest in the same asset class, you know there’s just so much speculation that has to go into this level right. So you know somebody who comes up with a three year plan, very detailed plan, that’s great thank you very much. But you know everyone’s got a great plan until they get punched in the face right and that’s the reality of it. You got to know how to do those things I think. Hey, I do want to see someone who’s got a business plan, I want to see that they’ve got that they put some thought and consideration into what it is they’re doing right. Whether it’s you know, we’re never going to have detailed views of what the total market size is, a lot of that again speculation but show me the work, show me that you’ve spent the time to go through that and you’ve started to think about what you know how you might navigate within this world. Again we’re at a very early stage so things will change. What won’t change will be the founder, right. That business can change completely from when you start to when it actually gets some type of eggs and if it ever exits but that founder is gonna be constant. And that if I really believe in that founder, that company they have might fail, but the next one they go into might not because they’ve learned a bunch of things, so again I’m more interested in tagging myself that founder. But they have to show that they’ve done the work, that they’re not I’m not you know I don’t have a crystal ball on anybody right. it’s like so I won’t get wild over by somebody who’s a showman and you know have all the bells and whistles. I want to see that yeah okay you’ve done the work, you’ve shown me that, you’ve got that little bit of x-factor, okay I’m willing to go along for the ride here and willing to invest my time, my effort, my money, whatever it might be that they ask of me to be part of their journey. That’s more but it’s you know when it comes down to the paperwork, it’s there is just so much speculation that it’s hard to gravitate toward you know, a cash flow analysis, or a marketplace analysis. you know show me you’ve developed some KPI’s, show me that you have thought about how this should grow, because then that’s what we’ll measure. We’re going to go back and we’re going to go look at how did you get from point A to point B and was it right? You know these are experiments, and so show me how you’re gonna create the experiment and then we’ll dive into the completion of that experiment.

Jeffery:
No that’s a great analogy the experiment side looking at you know this is where I’m going to start, here’s my hypothesis and then start knocking some of these off and having a KPI list so that one you’re accountable to yourself but you’re also accountable to your investors. So that’s a great way, to (sic) let’s put that. On my next questions, do you look at leading rounds? Do you look at just participating? Is it something that you looked at doing in the future how do you see that?

Galen:
Yeah, I don’t have the capital wherewithal to lead a round at this point in time. I think if I have a huge home run that I would probably want to take off feed round but I I you know, I certainly want to get engaged and that’s why I’ve taken on advisory roles well sort of try to give that lead at the leadership of trying to help that company as much as I can but at this point I’m I’m not in a capital position to to lead around but I will certainly lead the effort at a York Angels level. Like I will definitely you know take the lead on a due diligence for a group of people and spearhead the discussion and try to you know bring the investment in from that perspective

Jeffrey:
I think one of the things you just brought up there which is a another great point is that you don’t have to it’s leading, isn’t always leading by financial, it’s leading by being a proper advisor, by helping guide everybody else into that same room, helping them guide them through that business build and growth. It’s actually a very prudent, needed role that we don’t see a lot of right. Sometimes someone gets allocated because it’s a round funding versus around how is this business gonna grow. Where’s the strategy? How the other things gonna be brought together on the team? Who’s gonna be working this? So I think there’s a lot of value in both and you still can lead from the other side as well and I think that’s actually just as important if not more important, so that’s a great point in the investments that you have done or through York Angels, is there a preferred method that for terms that you’d like to go with and that you kind of push out to the masses or at least of the groups that you’re part of when making an investment ?

Galen:
You know what, I don’t think there’s any preferred one. Again we’re at that early stage of it all. Depends on what they (the startup) feels comfortable with. Sometimes it comes down to the cost, is there’s a greater cost of doing a shared round, doing share round versus convertible debt . Convertible debt will allow you to put a cap value on it, you kind of kicked the valuation down the road right when you’re doing share around an equity round ,you do have to put a valuation on it so there is a little more scrutiny that goes into how do you how do you price up what are this you’re doing I’m not one who shies away from safes there are a lot of investors in Ontario that are not fans of safes. I present a safe and my company so I would be a bit of a hypocrite if I said that I wouldn’t invest in someone else’s safe but it has to be a safe that has a cap value. I have been asked to participate in safes with no cap value, I wouldn’t do that because it doesn’t you still need to have some baseline that you’re working toward right and so I think it’s just what works best for the startup. I think it’s what again, I don’t want to make an onerous task for them they’ve got so many other things that they’re doing that you know to get stuck on you know do you do we want
common shares do you want pref shares. Trying to figure out evaluations that’s all time wasting for an early-stage startup and let them deal with that when they get to the VC stage, I want to get through the VC stage that’s what’s important so you can get to the next round or get to a PE or whatever it would be right . So at this stage, look for whatever is the easiest road to get money in that’s the Avenue I want to try to take and be as founder friendly as possible.

Jeffery:
It’s awesome and you’re right there is a lot of I wouldn’t say a lot of controversy but enough that it bounces around that people aren’t comfortable with certain aspects of the investment. But at the end the day you’re there to help the startup and make sure that benefits both of you. So you’ll work something out no matter what in the end so thank yo.u So I guess in the same realm we’ve kind of worked our way through learning a bit more about the startup phase why investing, and then jumping right into the types of investments you make, and we get behind the team getting behind the the owner of the business, so now you’re looking at leading rounds and all of this great stuff. You’re kind of going through this ecosystem, is there you set aside one funds for follow-up investments and you look at taking board seats, you mentioned taking advisory roles so would you also look at taking a board see if you really believe in that company?

Galen
So as far as my the money I’ve set aside, I do have money set aside for follow-on rounds but I’ve got none of mine at the point yet where there’s that requirement yet. So none of them have gotten to the point where they’re going into that next round and there’s pro-rata rights or anything else. So but my philosophy is 50% of what I’ve put aside is for new fresh investments and I’m holding 50% for follow on and really use so I can double down on the winners and that’s again a philosophy of how do you make this thing where kind of if I’m if I think about this like any kind of you know like I don’t want to call it gambling but you know if I were to equate this to to a gamble if you know you’ve got a win or you’re gonna want to double down on it right and so that’s why I’m holding aside capital for that and in the hopes that I do have some that are moving in that direction but none of yet given me that opportunity. As far as the board seats for sure I would be happy to take a board seat on a company. You know typically they’re the companies are gonna want you to put a substantial amount of money to take a board seat so at this point in time I would and then the other is it’s the amount of time required right you want to make sure that you’re taking a board position that you are adding value, that you are there for them, that you can spend the appropriate amount of time and so I would want to make sure that if I’m going to make that commitment to be on the board that I’m making on a 100% commitment to do that versus as an advisor you know, you’re called in for certain things you can be there to review something for them, or help and open a door and bring a relationship to them, so it’s not as structured as I’m going to be on a board, you know there’s a lot of requirements around making sure that you’re doing your fiduciary duty in conjunction with that. So but that being said, you know I would definitely be open to working on a board if it was the right opportunity for me and I knew that I can add value to a Phillip equation.

Jeffery:
No that’s great and it’s something to look forward to right. I think there’s a lot of companies that will start to open up to that and obviously jump on the knowledge that you bring to that. On the next the question, we kind of touch a little bit on this but outside the financial things you do advising what are the other things that you try to do and would help startups with kind of working their way through this system? What are the key factors that you really try to help and get those companies to focus on so they do have a better chance of success?

Galen:
Sure, so I mean I do like to spend time with startups well before the funding phase even start. So getting involved with you know with your OPN pitches, there’s a lot of companies that I’ve connected with and stayed in contact with and will help them through getting themselves pitch ready. Getting them to understand the mindset of an investor, might not be me as the investor, but what should they be looking at doing how should they be framing their pitch deck to to get the best attention when is the right time to go for funding should I even go for funding, right? So there’s a group of founders that I just continue to try to work with and my door is always open to them, probably more than it should be in some cases because I also have other stuff to do. But I do love being able to spend time with those startups. To do that and you know, it’s more of that I think just you know being involved in the ecosystem if I’m ever asked to come in and in being on a panel I love to do that and and and be a part of those conversations you know if I’m asked to come in and judge in an event, you know I’m more than happy to come in and do that because again it’s just I think being part of an ecosystem gives you a great opportunity to see new people. As always new people showing up in the you know, in these events that are looking for advice. And that was one thing I for me as a Founder when I came in and maybe it was an age thing maybe it was just me not feeling comfortable but I was coming from the outside into this ecosystem because my last corporate last couple years in corporate I was a global guy I wasn’t even living in Toronto and here I was sort of stopping all that and then coming to that ecosystem I didn’t really have anybody, I didn’t have anybody to talk to. I didn’t have there was nobody that I could turn to as a mentor to help me to go through the whole funding process and so I felt like a fish out of water and so I know what it’s like for these founders you know if they’re in the same situation I was in coming out of corporate and not having those connections or coming out of university you know and what do I do and how do i how do I put this together and I’m not an expert on all those things but at least like if I can help and guide them through that and it’s a good thing.

Jeffery:
That’s great so I think being able to take the things that you’ve gone through and learning from that, it’s gonna really help you hone in and help the startups as well through the ecosystem. That’s some great reasons on why you’re helping. So based on the markets states and everything to stay in the market right now, have you seen a pull back of you looked at well maybe I should pull back on maybe making some investments, to pull back on the amount of companies that you see and talk to you , or have you increased how have you kind of balance through this COVID19 scare that is kind of running rampant around right now?

Galen:
I am 100 percent open for business. I think that at York Angels were 100 percent open for business. The challenge right now is is the valuation gap. And so it’s a big conversation around where did valuations run up to, where should they really be, where are they in in relation to the overall market be US or Canada at the same time where investors have opportunities so we as investors at the end of the day we’re in this to make money. Like no founder should fool themselves on that. We at the end of the day, we have to make some return out of this. Now that return to be some personal return out of it and being able to coach that, but the end of the day we’re also giving money in the hopes of making a return and we have a set number that we’re looking for return. When we’re seeing opportunities like we are in the capital, liquid capital market today, where jeez you know what the market just tanked if I can take a portion of that money I’d set aside for angel investing and throw it in the capital markets to maybe make a quick double of my money or 30 percent I can pull that money back out and I’ve got thirty percent more to now invest into my startup fund but I’m current sort of crazy, right? So you know founders have to understand that you’re chasing capital and that capital can kind of move around within an angel investors portfolio and so I’m committed to the angel space but at the same time I also have to be realistic and looking to go jeez if I can make a quick 20 percent return on something. Maybe I’m gonna deploy over there and I may narrow my my lens a little bit on what I’m gonna do and what’s going to make the excited if a founder comes in and goes I’ve realized that the markets tanking, I’ve realized that hey my valuations got to change, I’ve got to make myself as attractive as I can to an investor. And so we’re starting to see some recognition that the fundamentals have changed and the companies are starting to come in and and the evaluations are starting to change and they’re starting to look very good again. We’re starting to see some really interesting opportunities. And so through COVID19, were it’s just been a cycle, and it will be a cycle and things will grow back again but we’re in this area where there are some great opportunities but I think some founders also had to step back to secure what they were doing. So we may be seen a little bit of reluctance for companies coming forward for funding because I think they’re also trying to take care of their own house right, like hey I got to make sure I can keep things going and do I really want to be balancing going off and trying to find an investor. So I know it’s a big, a lot of (sic), things in that and I’ve just had to apologize with a lot of concepts in there, it could be a whole hour just talking about that and I’m actually think of trying to put together or something around that but it is, I guess the point of it is, open for business, looking for opportunities, looking for great opportunities, and I think there are great opportunities out there and founders shouldn’t be afraid to come forward and look for funding because you know we’ve done surveys at York Angels, our investors are interested and still trying to find good opportunities. They’re not sitting on their hands, some of them are some have gone to the sidelines, but there’s still a good number of them out there they’re looking for good investments and there’s some great Canadian startups out there that they want to go well.

Jeffery:
That’ great. So you got a as a start-up be kind of gotta sharpen the pencil, look for ways to bring some more value back. Keep the interest from the angels and you should be able to keep moving forward. But like you said, you gotta keep out there and keep looking for money and keep getting investment. So that’s great. On the kind of far more on the educational side of things, is there somewhere that you recommend, someone that’s brand-new decided just like you were saying earlier, you kind of left corporate world, you’re gonna start something new and you don’t have any mentorship, you don’t have anywhere to go, is there any places that you recommend for startups to first start out looking for information? Anywhere from Mars, anywhere. You kind of have some go-to’s, is there somewhere where you think that people can really dig in learn a bit more about the positioning and then move forward?

Galen:
Sure. I think any of our regional innovation centers, the Rick’s so whether that be depending what community you’re in, it’s certainly from Ontario perspective, you know so whether that spark center in Oshawa, whether that’s venture lab in North York, Markham Mars downtown, Community TAC out in Kitchener Waterloo, and know I’m forgetting a couple others there’s there’s a bunch of them around. Excellent resources. Mars is the backbone for all of them from an educational perspective. One of the great things I think if you can get engaged with any of these groups is their research capability. So if you’re starting to put together your information, or you need to do research, they’ve got access to tremendous levels of research that will cost you tens of thousands of dollars on your own to get access to that you can get access to if you’re a member of one of those groups. So highly, where they probably hate me for saying, that but it definitely there are great resources, they put on education, they do great support, and the mentoring you know they have a lot of mentors that work down with them. So I think getting engaged with one of those is good. It helps you get on the radar of investors because we also work with those groups to help us with our office hours. To identify companies that will be raising in the next eight to 16 months. Get them on our radar now and get them working with us and so you know we run office hours with most of these groups to try to find those potential nuggets that are out there and start working with them. So whatever side do that. Mako, if you go to the Mako Canada website, they’ve got some great resources on their site, they’ve got links into all these different groups, so they’ve got links over to the educational area on Mars, they’ve got links into all sorts of different resources for you, the common dock so if you’re looking to raise, there’s an area there where you can go in and get some common term sheets that you can work from – so those are excellent. And I think just getting involved in in the ecosystem, you know there we’ve got a great startup ecosystem here in Toronto. It’s actually quite well advanced, compared to most other cities. So you know so whether it’s the ongoing and is sitting through the OPN pitch stuff. You know I’m gonna give you a big shout out, Jeffery, because you’ve been such an amazing supporter in what you’re doing. I love the fact you call it supporter fund because it’s really what you’ve done for years, you know. So learning how to pitch, learning how to get in front of people and hone your chops on going out and talking to investors and then getting their feedback, so whether you go applying the wall to watch what’s going on and eventually get yourself before you can go do that. We’ve got Tech TIO, they’ve got great stuff going on there right. So getting yourself into that ecosystem is really important, push yourself, you know. We’re blessed to have a lot of great resources out there that you can tap them.

Jeffery:
That’s awesome and you really rounded that out good with lots of good players from the ecosystems you bank on. You gotta give in that ecosystem to learn right. So I think it’s a kind of, we’re getting closer to wrapping up here, but one of the bigger questions that I always like to learn about is, is there something that you’ve taken from all of the pitches you’ve seen, all of the businesses you’ve interacted with, and then all the companies that you’ve invested in, is there one nugget there that you look at and say this is the piece that you got to keep in mind in order to win, in order to be successful. And it could be anything from better communication internally, or really honing in your focus into being really good on one thing it just knocks them out of the park, is there one thing that you found that the companies that are winning that make their way up to the top, that they’re doing really well, that people just seem to keep forgetting that they got to be part of or do?

Galen:
I don’t know if there’s one because it is it is a juggling act. I don’t think you can hone in on just trying to do one thing. I’ll go back to the analogy of a sports superstar. They’re never good at just one thing, right. They can see the open ice right, they don’t think about a Gretzky or or a Crosby right, they know where to go, where the pucks going to be, they just have an innate ability but there’s other things they can do right you know. So you have to have the ability to, I think, be able to have a broad view of what’s going on. You need to really understand how to deal with people, with your employees, your customers, so you’ve got to have that view of not and I think that’s the. trap unfortunately for a lot of Engineers is that’s that they’re very focused on their product. They’re very focused on coding or whatever it might be and maybe to the detriment of all the other things that you really have to understand how to deal with people. Dealing with people, you’ve got to do it and everything you do right and so whether it’s your employees, whether it’s your customer, whether it’s your your your suppliers. So you have to know how to deal with people. You just can’t be a ruthless person, you can’t just go on tunnel vision here, you have to have that broad view. You’ve got to be a good communicator, right. So whether that’s communicating out to your shareholders on a quarterly basis, make sure they’re aware of what’s going on. Make sure that when you’re falling down, when things are falling down around you which is going to happen, it’s going to happen right, so that you’re reaching out to somebody that you’re telling them I’ve got a problem and I need help because guess what we’re the ones are gonna come out and help you right but we have to know and if it’s too late, if it’s all falling down, it’s too late, you could have called us three months earlier we would have been there with buckets in hand to throw to get the fire out right. So that’s communication again. Whether it be your own employees, whether it be to your stakeholders — communications is super important and don’t feel embarrassed that that you’re having troubles or that there’s a problem because we’re all going to have them. The wisdom of being in business for so many years as you know I don’t have enough hands and toes to count all the times that I’ve gotten in trouble and that you have to then call on other people around you for support, it’s just going to happen right. So I think communication to me, it’s probably one of those X factors that you really have to work on. Most people do have to work on it. It’s not a common trait for a lot of people. We have a lot of introverts that are coders and engineers and you know so you’ve got to get out of that shell and deal with communication. If there was one big one that would be it, right.

Jeffery:
That’s great! Yeah communication is key I think that goes all the way down to personal, all the way across the board is that the more you can be at ease and sharing things that ask for help it’s amazing how many times more things will come your way and help you in the long run so being open minded to that is certainly helpful. We have one question that I’ll ask from the panelists and then I’ll end it with kind of a projections questions, so if you take a board seat, you put an offer to anybody on a board seat so do you give them shares and how does that look, how would you structure that?

Galen:
Sure. It’s a negotiation, I think for any of them I think depending on how much time you would want somebody to partake in the board. Typically you do give something back to somebody again for being on your board, if it’s just a very simple board situation it could be next to nothing. Its just okay someone want to help you but if, and by the way it works on advisory as well, you’ve got there are advisory shares that you can give out, there are board shares you can give out and so it really is a negotiation with the person across the table and what do you need from them so I was if I were to throw my founders had on it be what am I getting from this relationship with this person, what do I need in this relationship with this person, and then how much is that worth to me. And then trying to determine you know is it 1%, a 2%. and is it you know is it based on a three year time horizon or their commitments as an advisor. Do they need to introduce me to X number of potential clients that I then have to go close you know, don’t make it incumbent upon the advisor to close the deal but hey if they’re gonna open doors. So again it’s every, I think, every one of them in the negotiation there are some standard documents that you can find on the web. You can, if you’re involved with founder, other founder groups, I’m sure other founders will have advisory documents relationship documents that they’d be happy to share with you because they probably got them from somebody else, right. This if not there again, they’re not typically standard, they are really kind of bespoke when it comes to what are you trying to get out of that relationship.

Jeffery:
No well said. There’s yeah, there’s lots of different ways to coach that one through but I can mention there’s her (sic) notes over three years, there’s lots of different ways so that’s all valuable feedback and in great positioning for a start-up to think about. So the last question that I want to ask you is, how do you see the North American early stage investment marketing markets looking in the next 12 months and then in the next three years? So the world is shifting so fast right now, real estate is changing, corporate positioning of employees going to jobs is changing, everything’s moving, flights are probably gonna cost a million dollars to jump on a plane in the near future. There’s a lot of change occurring. Is there a focus that investors are looking at and where do you kind of project 12 months from now looking and then of course the big spectrum is where are we gonna be sitting in three years?

Galen:
Oh, I gotta see. Looking for my crystal ball I seem to have been missing it.

Jeffery:
Don’t worry I’m gonna record this, we are recording this. And I’m gonna play it back too so you better be right, let’s do this — yeah.

Galen:
That’s a very big question, very interesting question. So where we’ll be… So if I think about 12 months from now, take it, let’s take it and two stops but twelve months from now I don’t know what we will obtain a whole lot, in my opinion, I think we’re still going to be what will happen, I think will be the shift in the types of investments that people are looking for. So if I go back to even as you know in November of last year when nobody knew anything like this was even happening, the first words of COVID happening we’re kind of December so let’s say November. We saw a lot of company, you still out there pitching on wants versus needs right? So a lot of market place stop, a lot of discretionary spending, a lot of travel type of apps a lot of a lot of stuff that was still focused on on personal consumption, right. I think that will shift. I think we’re going to.. because we are seeing a dynamic change in (sic) what is going to happen for the world of travel, what’s going to happen in the world of discretionary spending, it is a whole different beast out there from that perspective. So anybody who is looking at trying to want startups in that space, it’s now become very murky waters. Now, some will emerge out of that, they probably will but you better have a pretty strong thesis and be running some really interesting experiments. But I will bet you a lot of them are pivoting right now, that are trying to figure out what do I do the pipeline is completely gone. Likewise we had already started to see a shift from the growth at all cost model right so if I think about the we work and the uber model, where it was just grow grow grow grow grow. Let’s not worry about making a profit we’re just worried about bringing people on board and driving revenue that was already starting to change so until that party had kind of ended so we were already doing a lot more scrutiny on companies coming in saying how are you going to get to profitability. Show me how you were, let’s not worry so much about grow grow grow so that I think will be even ten to five more that we’re going to see much more focus on how are you going to start turning a dollar here and even in our investments at York Angels we do prefer companies that are at least in the market. They could still be doing a free pilot but we want to see them quickly to showing that to a pay pilot, we prefer a company that’s already doing a paid pilot or are onboarding the first customers right so that’s showing there’s market validation that somebody wants your product and but we certainly don’t want people blowing their brains out. We know that they’re gonna have to spend some money to get the Machine going but we need to sort of ground them into how are you going to start turning a profit so I think that will be more of a catalyst. We’ll certainly see, I believe more heath tech type of opportunities coming through the pipeline now you know it’s hard to unring the bell right. So if I think about the things that have changed though the things that were being held off in the marketplace things like electronic signing, you know so we just had to start up coming through recently it was done extremely well in the Toronto marketplace called willful but one of the stumbling blocks was electronic signature. Well because of what’s happened, COVID, electronic signature is now being accepted plays a lot of places that wasn’t being accepted. Before it wasn’t being accepted I think because there was some kind of pushback within probably the legal system or somewhere else to say we don’t want this because it’s gonna encroach on our billing well guess what Pandora’s Box is now open, you can’t, how are you going to shut that because your argument of this isn’t a viable option is no longer available to you and so that Pandora’s Box has been open so we will see more potential opportunities of startups that need an electronic signature, that maybe that was one of their throttle points wasn’t allowing that. Same thing with all of the applications around remote learning, applications around video for healthcare, right. These were all things being held because at some institutional level somebody was stopping it from happening right. So when it wouldn’t work you know with the healthcare model, the billing codes wouldn’t be accepted accepted and so the insurance companies and the government’s weren’t reimbursing the doctors fully for doing telemedicine. Well now, they are, so how do you go backwards on that, you know so that whole telemedicine root will start to explode.. So I think we’re gonna see some fundamental changes and those will be those ramifications but for 3 years from now, we’re gonna start to play out at this point. We’re gonna now start seeing people (sic) this is what invention really happens when things have stopped or something new gets opened up, it’s like wow ok that just opened up a whole new avenue that wasn’t available before and we can now create a whole new set of applications or business models pop out of these kind of fundamental changes. So it’s trying to figure out what those fundamental changes will be. What will be the next version of transit? Because transits gonna have to change. Who’s going to jump back onto crowded buses again. You made the point of the cost of an airline ticket, well okay, yes it probably will be a lot more expensive but what does it mean to the travel industry? to a plane? How are they gonna have to set those up? I’ve listened to a Columbia and the other day talking about their interviewing the director at Heathrow Airport they talked about just one jumbo jet landing at Heathrow, if you had to do social distancing, for that for those passengers can go through customs it creates a kilometer and a half queue how does that even work in an airport right? So that’s one plate so how do you fundamentally think about all those changes that are gonna have to happen because we will go back to these you know, we will eventually start trending back toward you know lives again and travel and all these other things but it’s gonna have to fundamentally change how we do things. And so you know the whole idea of scanning people for sickness and you know different technologies are gonna be born out of this matter I see but the three years from now we’re gonna see some icing, some amazing technology that will pop out of this that we just haven’t even thought of before because of COVID.

Jeffery:
Now that’s some at some great great insight. So I’m gonna hold it to you in three years. But I think you’re pretty bang on with that there’s a lot of change. There’s an article that was written that Air Canada was gonna be implementing these monitors for key temperature taking and people were complaining that this was against their rights and then you have the other side we’re inverting seats on planes so that you can still have the same amount of people in there as well, sorry thirty percent less people on there, but you’re gonna be able to all wear masks. I thin it’s gonna be very futuristic we’re all gonna be in spacesuits walking around with buckets on trying to protect ourselves from the environment. But it’s gonna be very interesting to say the least and I think it’s just like all of the news that came out over the years where they were saying Gen Y, Gen Z, Millennials they don’t want to buy homes, they don’t want to do banking, they don’t want any of this stuff and you’re kind of thinking what where’s this coming from? You know anybody who talked to me I’ll say no I want to own a home, like that’s what I’ve wanted to do since I was a kid like give me a break. Who’s making this stuff up? Well I think those are the things that create change and when you create a big enough story and get enough people saying it they all start to believe it right. So if we started saying that you know what no matter what, everything’s gonna have to be done in social distancing, eventually people will start to agree and say yeah I really do need to be six feet away from somebody two years from now. Because who knows what that person’s (sic) God and I need to be sitting in my car when a doctor’s office calls and that better get a clean path right to him and they hand me a mask on the way in. So I think there’s gonna be a fear set that’s put into the change that goes forward but there’s gonna be a rebalance or people are like wait a second man I’m losing my human side here which is I like to just get around and do my things so who knows where it will all net out but I think there’s a lot of change coming for sure.

Galen:
A lot of it yeah and then it’s you know things like this that caused that. I mean they’ll come up in the vaccine that’s fine. But then there will there will be inevitably another type of upstream of disease. Look come on, we mean SARS was there and and N91 and you know so we’re we’re seeing this progression they believe they will continue to happen but it’s created a heightened sense of urgency around the solutions and you know I’m working with one startup that’s working in the smart PPE space right? So how do you create smart PPE versus just PPE and and so it’s doing more things than just giving me protection but it’s actually actively monitoring the body and monitoring what’s happening around you. You know so these are very futuristic type of applications that you know really a year ago who would have thought they’d ever have a requirements level, now there is a requirement for this kind of stuff right and so you know there’s I think there’s just really to me it’s a it’s kind of exciting and that’s you know like being involved in this space this is a real back to the very first question – -why am I doing this? Because we get a chance to see so many different cool technologies that could be implemented you know, two three four years from now and how cool is that you get to see some of this stuff at the very early stages when it’s happening right and be part of helping those founders to make that dream a reality.

Jeffery:
No I love it and I agree with you well we’re gonna end it on that right at to now. It’s been fantastic Galen. Lot of amazing insights. This is why I’m a big fan of you. You had a lot of cool things to share and we’re gonna cut those into Tibbits and send them around and all that good stuff but uh and we’ll leave the big video as well but you know everybody consumes a little bit vs. a lot so we’re gonna make this work for everybody. But I appreciate all your time. I will let the audience, everybody know when we do have edited it and ready for everybody to see. But I want to thank you very much for timing our insights and I will see you, I’m sure over the next few days somewhere online on some video shooting zoom and we’ll go from there but thank you again for your insights man.

Galen:
Thank you very much, JP. I really appreciate it. For you, any time. You’re good man

Jeffery:
Thank you.

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