"Let's focus. There's going to be all kinds of things that are gonna knock you down. Take a deep breath because with resilience, with passion, with hard work, with the right type of mentoring -- you'll get through it."

- Peter Dal Bianco

Peter outlines what he looks for in a start-up

Talk Takeaways

Peter Dal Bianco talks about his amazing business background and how his passion for helping and mentoring are the two main drivers on why he invests. He also shared why healthcare is the prime vertical he is most keen on, and why technology and franchise comes second and third, respectively.

Peter also shared his investment strategy using the Peter Dal Bianco rating system, touched on what he looks for in his due diligence, the startup team, and even shared an amazing story of an entrepreneur he mentored and the success  she has reached. His insights on the early stage startup landscape for the Northern Ontario and Canada as a whole is exciting.

About

  • Born in Pordenone, Italy, I emigrated to Sudbury at the age of six and have been a local resident ever since.
  • Spent most of the past 45 years owning and operating retail, consumer electronics, video rental outlets and commercial property enterprises in Northern Ontario. During this time also acquired tremendous experience as a shareholder/Director of a Nasdaq publicly traded company. Here are some highlights:
  • Opened first retail audio/video store in downtown Sudbury in 1975.
  • By 1981, had opened stores in Elliot Lake and three others in the Sudbury Region under the name Bianco’s National Video.
  • Moved to Toronto in 1983 and became the President of National Video Canada, a franchisor of video rental stores and opened 130+ franchised outlets across Canada. These years allowed me to gain huge expertise in Franchising.
  • By 1985, became 2nd largest shareholder of the parent company, National Video Inc of Portland Oregon. My first actual “ANGEL” investment.
  • In 1986, with over 700 video rental stores across North America, we took the company public on Nasdaq. At the time, the company was recognized as the largest Franchised video rental chain in North America.
  • Also, by 1986, put together a new team in Sudbury, to sustain and grow the Bianco’s, National Video group of companies in Northern Ontario.
  • In the years following, National Video Inc. sold off its franchising business and changed its name to Rentrak Corporation. Rentrak went on to become one of the largest movies and video data gathering/reporting entities in the world. In 2016, Rentrak was merged with another information specialist, ComScore Inc. ComScore stills trades on Nasdaq today.
  • In Northern Ontario, Biancos –which started with 8-tracks, in the 70’s, to CDs, VHS and DVD’s in the 80’s/ 90’s, to 4K HD television and IOT digitization of Home appliances today…  the Bianco’s Brand has competed against all competitors and crises to survive, grow, and prosper through it all to the present.
  • In 2007, I won Entrepreneur of The Year for both Northern Ontario Business and the Sudbury Bell Business awards.
  • In 2014, the Bianco’s brand was split with my portion of Bianco’s retail operations sold to longtime partner, Mike Rowlandson. Mike will continue to operate and grow the retail side of the Bianco’s businesses well into the future.
  • In the division, I formed Bianco’s Management Consulting Group, focusing my 45 years of business expertise as a business advisor/mentor/investor to local businesses and start-ups.
  • Presently, my contracts primarily involve me as a consultant for Northern Ontario Angels, helping raise over $7 million for local start-ups/scale-ups since 2014.

The full #OPNAskAnAngel talk

Jeffery:
All right. Welcome Peter. Thank you very much for taking the time to join us today and we are going to dive right into it and we created this module about probably four weeks ago and our plan was that we wanted to interview one angel investor in a pre seed seed brown investor across Canada to start with, and learn what they’re looking for, and how they’re going to invest. So you came highly recommended as a fantastic investor, coach, mentor and all of the above and Peter we wanted to learn a little bit more about you so maybe you can give us a bit of a background on yourself before we jump into all the questions.

Peter:
Thank you, Jeffery. Pleasure to be here and hello everyone my name is Peter Dal Bianco, I live in Sudbury Ontario, and started my business career in 1974 and I probably have been through six crises now since that time because I started off retailing 8-track tapes some of you are probably too young to understand what that is, but 8-track tapes is where I started and we sold LPs out of our store and started off with something with about 700 square feet and bottom line that developed into the Bianco’s Super Centers, we expanded and open up multiple stores. Around that time the end of the 70s, we started having some real great discussions about all the VHS and beta stuff that was coming out so as well at the forefront of the video revolution became very very aggressive in getting together with a new company out of Portland Oregon of all places by the name of National Video. Quickly opened up multiple franchises all over the north and the president of that National Video said at that time you’re wasting your time up in Sudbury, come to Toronto. So I moved to Toronto for about five years, became a head of president of National Video Canada then I invested in the company in Portland Oregon, board everything I could and that was my first angel investment. In 1984 I became the second largest shareholder of NDI, we took it public in 1986 on NASDAQ. And that’s really where a lot of my training, in terms of mentoring, in getting involved with angel type work, because we had an incredible board, just an amazing board. And I was on that board for about 12 years and the company quickly transitioned from being a video store franchisor, we sold that off and became data collectors. The name of the company was called Rent Track for rental transactions, and rent track went on to be very successful and merged many years later with ComScore. And I was still have the feudal shares of that company left. And so a lot of the work that I’ve been doing is traveling through all of the 80’s and 90’s between Portland Oregon, the States, and Canada, mentoring a lot of franchisees, a lot of stores. In terms of technology and I feel that technology, I feel that the ability to convince people to come into your store, to purchase your product, and messaging, the marketing, the salesmanship, and management of course because we at one time, we had 15 stores 16 stores personally. And after running around the country for 20 odd years I decided to let’s focus back into Sudbury, we opened up a bigger store got into some other things. Bottom line got to a point by 2014 that I had so many individuals locally come into the store say Peter you’ve been doing this, you’ve been successful at that, can you help me with this idea, can you help me with that idea… You know I really like this, I really like the idea helping young people because I had seen a brain drain from Northern Ontario for so long, so so long and I had seen the frustrations with the local political system throughout the north. And very quickly and by 2014 became involved with Mary Long Irwin who is the managing the executive director for the Northern Ontario angels out of Thunder Bay and she says I have no representation in Sudbury, we have consultants throughout Northern Ontario and I’m looking for for somebody to be a consultant who’s got your experience… So we find a nice little contract for five years. I said I’ve got five years. And I split my retail business at that time, my partner bought me out of that, I’m no longer involved in retail basically started doing management consulting, found a huge demand for it. But I really concentrated on the two factors being, the Northern Ontario Angels the NOA, and the Regional Innovation Center at nORCAT which is the Sudbury regional innovation centers called nORCAT innovation and under the leadership of a brilliant young man by the name of Don du Val. We really saw eye-to-eye and what had to be done in pushing the whole ecosystem within Sudbury. And so I got involved with mentoring, investing in companies, doing work specifically over the last five or six years with local individuals and as our reputation spread throughout the north and we raised just over so far — we’ve raised just over seven million dollars for different startups here in Sudbury. So we’re quite, quite proud of having worked together to get some of these companies up and running and staying here locally, building companies here locally, because like I said before we never had a lot of places to go. There just wasn’t a place to go to get the mentoring and Southern Ontario is always such a draw and so so far so good then that’s what brings me to where I am.

Jeffery:
That’s a pretty amazing background. You’ve been investing a very long time, but working with startups and giving it back the entire time as well so that I think really rounds your career very well and nicely that not only were you driving business in a big way but you were also helping others along and I’ve chatted with a few companies over the years in Sudbury and they always talked about the regional innovation centres, so I think that’s an attachment to what you guys have done so that’s pretty exciting, very cool. You mentioned a little bit about first investment, what got you into investing? What really got you excited about it what was the the real reason or the best part of why you jumped into it?

Peter:
I’ve always measured my successes by the failures I’ve had, the hardships that I’ve had. I’ve given talks to CARP people you know the old folk people, and I’ve given talks to startups, I’ve given talks to bankers and regional innovation centers throughout the north and I said you know — thank God I had a lot of failures, thank God I made a lot of mistakes, and I think where I’ve really found that startup in National Video that I could be a help because I quickly saw when I went to Toronto that you know we sold 135 franchises. Basically myself going from coast to coast and when I saw that they were in trouble, they were in trouble in Portland Oregon, I thought you know I think I can make a difference here and I love the business. Absolutely passionate about the business and I can bring so much education to the franchisees and because when I first started in business, the way I start off with buying a franchise which turned out to be a disaster and I quickly learned that there is a right way to do franchising and the bad way to do franchising. And I’m a firm believer believer in the franchise system, I have my opinions of what makes it successful and what doesn’t. I’ve been very fortunate to be involved with about 30 odd years with an individual who was in McDonald’s here in Sudbury and God bless us all we did a lot of comparing thing so I really pretty good about franchising and that’s why I joined the company, that’s why I bought into it, and sat on the board for 12 years.

Jeffery:
Amazing so you continue to kind of have that real drive and desire to help support through investments so that’s kind of I guess working with these early-stage startup people that are coming in and looking how can I make a business, how can I make this succeed, and you’re jumping in there said I love what you’re doing I’m gonna get behind you so you kind of gave an idea what helped you get started. What’s your favorite part about investing?

Peter:
It really is the mentoring part of it I always try to take some sort of position within the company. I know there’s a question coming up about do you take board positions, not anymore. I took quite enough before I got involved strictly with managing and again for many different reasons I do allow myself to become a special advisor to the board. How to set up a board properly, how to mentor the boards, what to look for, and so the real exciting part of this is trying to pass on the experience and all the mistakes I’ve made and hopefully try to short-circuit because when I started there was nothing, like there was nowhere we could turn to. I mean God bless if I had listened to my accountant, my banker, my parents, I’ve never worked started in business I mean I had a very nice job as a federal employee, I’m an engineer basically, a surveyor by trade and very honestly there was just nowhere to turn. And I’ve always felt this passion for great young people, with great ideas, with passion, with just the right guts to say I want to build it myself, I want to try it out, and so I really like, I love as you can tell from my voice, I love that part of it. To me that’s where I can be the most useful.

Jeffery:
Well that’s amazing on the mentoring side because — and the risk side once you kind of get into it the risk, it kind of dulls itself down for the excitement for the go get it and make it happen, and obviously you’ve done that quite well and many of times, and it’s fascinating that when you say you know my parents to your legal to everybody — they would never force you into it because risk management is so different when you’re in a job that you’ve been doing for a long time and it’s hard to get people to really dive in deeply and I know just as myself growing up too was the same and oddly enough throughout all these years I probably guessed that probably half my family don’t even know what I do everyday but the best part is that my mother joins every one of these calls and it’s like she’s having this — I think my mom’s gonna turn into an investor soon because she’s getting so excited to learn about all these investors and startups all over the world, it’s pretty exciting. So I think that once you take that leap of faith in that step but you have the right people supporting you from the mentorship, I think it really will help you move forward quicker but also help you miss some of those hurdles because those are the scariest part.

Peter:
Yeah, yeah and the mistakes that especially during a time of crisis — I mean it I have not been busier in the last three months – my wife will attest to it — it’s one zoom meeting after another, hand-holding the people that I’ve been involved with. I’m still quite intimately involved with about 10 companies here locally and it really becomes a tremendous amount of saying okay guys here’s what’s gonna happen and just sort of let’s focus, let’s focus. There’s going to be all kinds of things that are gonna knock you down and take a deep breath because with resilience, with passion, with hard work, with the right type of mentoring you’ll get through it, I promise you, you’ll get through it. One way or the other I mean if you have to pivot and it’s okay to make mistakes. Let’s learn from them, let’s move on.

Jeffery:
You touched on a really good point there. Is that you’re gonna make mistakes but if you don’t communicate them no one’s gonna be able to help you, no one’s gonna be able to step in to help guide you through these. So you do have to be very vocal and communicative to the people that you do bring into your inner circle if you will and share enough with them to kind of move in and grow with that. So you mentioned that you still work with a bunch of companies to this date in your your tenure of investing do you have a kind of a hypothesis of what you’re trying to — how many companies you want to invest in per year or work with each year? Do you have any methods or any process that you’ve put together for this or do you try to keep it just ad hoc wait to see what happens like how do, how do you work with that?

Peter:
Well again I may have shared with you, I’m not sure with the rest of the individuals in this meeting right now that I promised, that at the end of the age of 72, I would no longer invest in other companies I would continue mentoring if I can but I would not invest in any more and up to that time I think I had invested in five or six companies and I was a special adviser to about four or five other ones and what I look for is a very simple rating system I call it Peter Dal Bianco’s rating system. And it’s all about the value proposition that you keep hearing about. The value proposition and of course I break it down two to three and of course number one is always people. I can’t explain more than then how many times if I don’t get the right vibe from the person if I’d you know, and doing my due diligence, find out that they’re bullshitting me and and so it’s always about people especially people who have done it before who have built something before that are capable of performing under the risk as you call it the risk factors of how to start a company and how to make it grow and succeed I look for those type of qualities within the team. I look for again brilliance in terms of what need are they actually fulfilling. We’ve got the people — okay so convince me that there is a need there. And so and I’m pretty good at a couple of different things too whether it’s in the technology sector and like I said I’ve had quite a few years if you want to call it experience with how to survive against competition through all of the electronics and the consumerism that’s gone on for the last 45 years. And so if it’s there — if it’s healthcare, if it’s about your IP that you have what are you really fulfilling in that need if you can’t convince me then you’re just not gonna get anywhere. And then it comes down to prove to me yes there’s a need, but prove to me that people will buy from you. That people will want what you say that you are going to provide, you’ll need to solve the problem. Tell me what work have you done to be able to convince me that there is a demand for what you’re doing. That there people are going to be lining up for what you’re doing. And I’m sure you know you look at all the great angels that have been out there over the last 30 odd years from the Google boys to all the people who invested in Amazon and that’s — it’s kind of basic, those three factors are kind of basic in terms of how big angel, super angels, and us, ordinary angels that have gone through the the school of hard knocks, how we get to a point of valuing which companies we involved with and stay involved with and want to support, do they get some sort of success and exit and hopefully that answers your question

Jeffery:
No that was great. And so now you’ve kind of you’re really building out this value proposition and working with the startup, is there any vertical as you focus on or anything that you really think makes a difference right now or in the past that you really liked that’s done well?

Peter:
Like I said, I think probably one of my first loves is healthcare. Because of some of the issues that I’ve had, I mean sharing with you — I have seven stents inside of me and I try to stay as fit as I possibly can and I’ve become a poster boy for my cardiologist, but I do have concerns about you know — but I’ve got these in me and I have to try to really manage stress extremely well and I get very passionate — we’ll get involved, so I have to be careful how I get involve with them because I want to throw myself into it so they’re the real part of how I want to go forward is — again continuing with the mentoring that part — but being able to sort of really focus on health care. Healthcare proved to me — because we can’t sustain the health care system the way it is right now in Ontario. We talked for example that you had iRegained the other day or yesterday as a pitch. Immediately after probably spending a good 30, 40 hours I’m trying to understand what they’re going to do and I saw this as just a tremendous opportunity to really save the healthcare system millions and millions of dollars. How can you take all these people that suffer from stroke and turn them back into being productive and off the health care system. And in all my research, there was nothing like what the need has done in terms of the neuroplasticity in the way it goes after it right. But the real real beauty I see of this of course is that here COVID has presented such an incredible opportunity for us because the My Hand device where I see that having thousands of devices out there — if somebody gave me seven million dollars today I basically take that company, I’m too old to be this — you know to help be formally take over the CEO job — but we would go find ourselves a rockstar CEO and let the him do what he’s really good at, when he’s a tremendous clinician so we would have a thousands of these machines out there all connected by AI collecting data right across everywhere that we would put them and so I just foresee a where this is going right — so the technology with healthcare saving money saving people so that gives you a bit of an idea how I look at all of the people, the investment again, welfare, so Health Care’s number one. Technology of course number two. Franchising number three. Anything to do with technology especially from the software side I’m not too keen anymore. I’m doing inventory after 40 years of trying to balance inventory, I don’t get involved too much about the inventory, if for example you want to have a new piece of hardware I have really challenges — you have to convince me about before you invest in anything to do with hardware but I love the IT part, the software parts — and I’ve nvested in a couple of companies on IT and done well so far. And I guess the third one is the franchising part of it, if somebody has an idea, a brilliant idea, I know exactly how what I’m looking for to try to help them put together a very strong franchise we have a tremendous success story here in Sudbury with Sherry Tom Chuck, Tom Cech, and her Plan A and when I started working with her about five or six years ago — and bottom line she’s a rock star absolutely rock star in terms of long term care especially nowadays with COVID, and she’s probably one — she’s got 28 franchises, she’s got franchises out west — just a tremendous young lady I’m very proud of her.

Jeffery:
Oh that’s amazing and a great story too. w\We’d like to hear the companies that are doing well and they’ve taken something from an idea all the way through to make it across Canada. So that’s pretty exciting especially in healthcare right now there’s so much stuff coming out around long-term care so that’s amazing that she’s been able to do that. In your what you’re going through and working with these companies and you’re getting ready for investment, is there any feedback or anything that you really want to focus in on? You mentioned obviously before you have a couple of tiers that you look at from the people, is there anything in the due diligence, in the documentation or around the team that you really want to emphasize on that makes a big difference on an investment that you’ve or investments you have made in the past?

Peter:
Well the paperwork, yes, is extremely important. I find myself especially ,now after the last five or six years, I don’t waste too much time
myself personally trying to educate let’s say the start up convincing them that you have to have the proper paperwork. I mean you got to form the right company, you’ve got to find some sort of accounting somewhere that you can start putting together a shareholders agreement and what you’re offering in terms of equity. And I really get involved with — and to me that’s pretty standard I mean there’s it’s kind of a check mark, check mark, check mark — prove to me you have all of these and I have a list of due diligence that people have to fill in in terms of the paperwork and then I check it out and I read it through and I can read it pretty quickly whether it’s bullshit or not, excuse the expression, and get to the point — okay now let’s really get to the brass tacks, let’s see what you’re gonna offer somebody if you’re going to try to attract investors. What are we going to value this at? What is the valuation? Let’s really get into the nitty-gritty of the numbers and that’s what interests me a lot is when I actually see the financials of where you’re gonna make money, what’s your margin, how are you going to compete, what’s your distribution plan, who are the people that are gonna do the marketing and the sales for you – yes to me it’s all about cash. It’s all about cash. And can you convince me that you have got the value proposition that is going to throw off cash after a period of time. Or is it going to be one of those companies that you have to keep funding and funding at losses and losses for years and years and years just to get market share — I don’t get too involved with stuff like that because my time frame’s way too short, and but I really do really what’s the word I’m looking for… value something that’s oh wow we can make money this way, here’s our gross margins, here’s how we get the marketing and I really get into the nitty-gritty of the financial part of it. And so to me that’s I think one of the stronger things I look for and before I make a startup investment in the startup is — let me see what the cash flow is going to look like, let me see what other precedents have been set before in terms of what the valuations are, and as you know valuation of a start-up is pretty — there’s not too much science behind it. There’s a lot of art and a lot of experience between individuals who sort of what’s this worth and what’s the value and where’s it going to go and can you get people interested in because as we all know, as angel investors, you’ve got a you’d be so damn lucky if you got like 20% or 30% of I mean I haven’t heard of too many 30% but you know 10 to 20 percent if you can get them to pay off in the multiples that you want then you’re doing well. But you got to do a lot of risk-taking, a lot of investment, and throwing stuff look up against he wall you know before it sticks.

Jeffery:
No. You’re very true. There we’d spend a lot of time going through all the paperwork, and the plans, and structure, and you mentioned it a few times it really comes down to how are their planning, what kind of things they’re looking for a future, how they’re building value, how they’re generating revenue, cash flow, and it comes back to, a lot of times, it does come back to that owner and the CEO. It’s really important for that person, for persons, that are gonna be in that position because they’re the drivers behind it and they gotta be passionate and driven to make this succeed as well. So in taking to that is there anything, on the kind of maybe it’s a team, maybe it’s the paperwork, is there one thing that really that you say make sure you have this because if you don’t have this investors shouldn’t jump into this company?

Peter:
Yeah if you don’t show how they’re going to get their money back, if you can’t show with logic, with facts, with figures, with comparables, if you can’t show how somebody is going to get their money back — there’s no use wasting anybody’s time. I mean you can have the brightest idea but you know, you ask people for money, most people who have money to invest like angels they’ve worked very very hard. Especially in this country to have money left over after taxes, I mean your work most of the time you’re working with 50 cent dollars and we don’t get the support from governments here in Canada that says if I’m an angel investor, I mean they should be matching giving us — what was it the BC, I think, had a wonderful program the (inaudible 26:14) BC and Alberta where they gave you 30 percent immediate credits right if you’re an angel investor and they still do. I mean and I think that’s a fabulous, fabulous approach and we just — I think there’s gentleman here you may have heard of Matheny Lacovara who started wind mobile. I love some of the things he has to say, which is he’s a real pusher for the fact that governments have to become more aggressive. And for years I’ve been saying one of my favorite favorite comparables is the fact that look at what Israel’s been doing. Here’s Israel, Ontario’s forty-nine times the size of Israel, they’ve got 8 plus million people and southern Ontario is 12 plus million people. We should be able to compete with anybody in the world, they’re doing it, I’d love to see us get to the same point, but we need the type of government, risk-taking, like we as angel takes risks to match what we’re doing and that’s how the system really gets to be expanded and that’s how you start to making a big difference to your economy going forward for all these, for all of us. Very honestly the whole startup who cannot convince me, that there’s gonna be a way of getting that money back then he sees not very much success.

Jeffery:
Now that’s a great point and I spent some time over this past Christmas, December in January, and I was going through Israel as well
and I met with lots of startups there, and you’re right the support that they get is incredible. The same thing in Chile they have an incredible support system for startups there as well and they know they don’t have funding so they have an outside angel group that invests in companies in Chile because they can’t afford it but then they get a lot of that support, and then the government’s come in and help companies that come in, and give them 60 thousand just to boot, to start the startup there. So there’s a lot of things that these economies are doing to try and get behind startups now which is phenomenal and you’re right if they can’t show you how they’re gonna make that pay back then you know that this is gonna be a lot tougher slug than what you’re looking for in any side of business. You mentioned about the board seats not something that you jump into anymore, but is there – when you were in doing this – did you take leads on any of the investments and is that something you still like doing and it doesn’t mean it doesn’t have to be for money it can be just purely leading to get that company closing some dollars.

Peter:
Yeah, yeah. Just about all the companies I’m involved with, I do take the lead in really becoming a vocal advocate for the company. Some of the M.O like I said I’ve invested in five, six local ones over the last five years, so one to two not that we have a lot of selection right, I mean were Northern Ontario and we’re really basically Sudbury, Greater Sudbury, of two hundred thousand people so the pickings are bit slim but I think we’ve picked some pretty good winners to go with over the last you know five years. But I love taking the lead, I do get involved with being advisors to the boards, to the individuals, if I don’t invest in them and becoming very vocal because I think that over the years the millions of dollars that I’ve spent in trying to do TV commercials, radio commercials, all of the things are getting people into our stores to buy product from us in a very competitive field, I’ve learned what to say, what not to say and how to say it so the messaging, the actual messaging, of how you put together a pitch, how you put together individual pitch slides, how you talk, how you convince people the amount of time that you have to try to convince one person to go from one slide to another slide, and I’ve dubbed them Peter dalla Bianco’s many 30-second commercials, if I can’t get your interest, if I can’t capture your imagination and get you say oh yeah I like that to go to the next slide right and you’ve got thirty Seconds to a minute to be able to put that across because and I’ve always held my mic, my clients do 12 to 15 minutes maximum that’s all you buy. You know if you can do it in 12 minutes, great you can push it to about 15 but after that you start losing people and if you can’t sort of put your idea across in 12 to 15 minutes then you haven’t had the right mentoring to be able to do it properly.

Jeffery:
That’s awesome. And I love the whole messaging around convincing people and you’ve got 30 seconds, because you’re right, elevator pitch you got 30 seconds to keep my interest. And the 12 or 15 minute pitch, we actually cut it down to seven minutes because…

Peter:
I love it

Jeffery:
(Inaudible 31:06) falling asleep at 15 and I said you know what if I can’t get this message across around your entire company in seven minutes then we got something wrong, if seven minutes just seems to zing by and you feel like I can’t wait to ask questions and that’s really what it comes down to it and I love that you’ve got that real fast get it in there, learn it, and move on so that 30 second pitches is phenomenal. Is there — inside of this you kind of start to look at where this company’s going, I want to invest — is there terms that you focus on like do you, are you against safes, you like safes, you’ve obviously done this lots of times or is there certain models that you really like and push the startups to do or do you kind of stay clear of it and let the lawyers do it?

Peter:
I love lawyers because you hate them or love them. And I’ve learned to love them because I think one (inaduible) which is I’m telling you what I want, you’re a lawyer I want you to give me this legal advice but I’m telling you what we’re going to do. And I think there’s a lot of cases where lawyers and accountants – god bless them – their professions they’re absolutely necessary, but none of them, most sorry I shouldn’t say now that most of the ones that I’ve come across, many haven’t started her business. They don’t understand risk, they don’t
understand what it takes to be a real entrepreneur, they love working with you, they love taking your money but in terms of being able to get them to give the proper type of feedback, you are the owner, you’re the one that’s paying the dues you should be getting the advice from them so for me I look at each individual client that I get involved with and I said what’s the best way that today if we can’t sort of pick a valuation then of course you don’t have to do a safe or you’re gonna have to do a convertible debentures because it’s just no way of putting together some sort of number what it’s worth that you can’t convince other angels then you have to go to those you know like I say convertible debentures or some sort of loan arrangement or guaranteed return. And then however what I do like if I can come up with a pretty good handle on the valuation I like coming up with just common shares. I like coming up with common shares, I love coming up with maybe third shares if it’s needed but the moment that I fall in love with that is that becomes the rating out of my three value propositions I told you about — you know the people, they need the competition you can score over 20 or 22 out of 30 each section has ten and you can score twenty to twenty-two over that you have my interest. Let’s really look to see if we can go into common shares and again we talked about iRegained before I loved the fact that we were pretty solid about the valuation and going to common shares because then you’ve got vested interest. You’re in there, you’re a shareholder, you can talk with passion, you can ask questions, you’ve got skin in the game and that’s that’s probably my favorite.

Jeffery:
I love it. I’m a big fan of common shares, I love that. So now that you’ve been working with all these different companies over time how does the communication work? You’re invested, you’re getting all this material or at least you think you’re getting all this material, is there a preferred way that you want them to communicate with you because you just mentioned that you’re invested, you’re passionate, you want to be in there talking how are you getting that feedback. Are they putting you on email lists? Are they on auto-dial? Like what’s the best way for you to be able to really help them grow?

Peter:
Well yes, I have them all in autodial first of all. I want to be kept abreast of any, and they know this up front, of any challenges and it problems any setbacks. I want to see cash projections – how are you going to deploy cash properly, how are you gonna use it, how are you gonna maintain the ability — you know I love setting milestones what you have to do show me that the milestones we’re gonna get to the certain place. Report to me if you can’t deliver on those milestones. So yes constant contact with them that’s why there’s some, especially over the last three months, there’s so many zoom meetings with all of these individuals that I asked is it bringing up a date where you are, what’s your cash position, what’s your burn, what’s going on how can we pivot conserve cash, what can we do, can we use any government grants that are out there and policies that are out there? Which I know that was one of the questions you asked me, do you like doing government grants? You haven’t got a choice right, there is quite a bit of money out there, you have to prepare yourself when you go after government money. There’s no damn way you’re gonna get it fast enough. It’s such a frustrating experience at times too, whether you’re going to anyway NONFC or FedNOR or other venture funds or it’s the due diligence and the problem is a lot of these investment committees haven’t got a God darn clue how to actually do the due diligence properly. You know here in northern tier, we have Northern Ontario Heritage Fund Corporation, has hundreds of millions of dollars to give out in the last six month, 12 months, I guess I’ve been really going through the process of trying to help the Northern Ontario Angel, the NOA ,were closer with NOA HFC because the due diligence is done by MMP and the way they do due diligence is mind boggling and had to get involved again with with iRegained because the due diligence they they didn’t do any kind of due diligence them, you know they did the zeros add up here, that the check marks and again accounting firm going through trying to do diligence to try to get you some money and so I really spent a quite a few hours over the last five or six months trying to educate the M&P people, the NOA HFC investment committee people, the NOAHFC board of directors, how we got a we’re closer together and I think we’re become quite successful. Well we’ll know by the end of today because there’s a board meeting today and I’ve been told not to worry that I’ve got my point across very well so the whole working with government grants, you’ve got to be patient, you got to keep pushing them, you’ve got to help them, you can’t take an adversarial effect to it, but don’t expect to get the money quickly. It takes, Northern Ontario anyway, you’ll be lucky if you can get nine months, if you can get money into your bank account within nine months. That’s just — I’m being very, very, liberal here. In Sudbury I think the money comes in maybe if you’re lucky by 12 months.

Jeffery:
I think that’s pretty common and you alluded to really clear that. A lot of these places they’re not entrepreneurs running these businesses, they are just people in business. And they have a different way of looking at what an entrepreneur does and the lifeline of an entrepreneur is really trying to figure out how they can do sales, and keep cash flow running, manage burn rate, and a lot of these times, these programs are really helpful but they do take a lot of time to execute. So awesome of you to go in there and start to help them understand this because it’s common everywhere. It’s almost like you should be recording these videos and posting them and sending them out when you’re fighting these battles because there’s a lot of people that don’t have that understanding. But it’s honestly, it’s a really big need because there is again a big gap with governments understanding how to support startups. They think that it’s just some people hanging out at home doing some work here and there and not really wanting to drive it forward and grow a business when it’s obviously the complete opposite of that. But that’s some great insights and really appreciate that for sure. So if we take this whole rowdy experience, we’ve kind of gone right through the funnel, we’ve learned a ton about how you started, where your investments started, the types of companies you’re investing in, the paperwork, the due diligence, the team, CEO all these great things that you look at, is there any underlying part that you could say that really makes a startup successful that you could really get behind?

Peter:
Well again without repeating myself they’ve got to really first of all — they’ve got to be the right people. I mean again it always goes back you can have the most brilliant idea but that person hasn’t got a clue how to a take mentorship, guidance, how to manage ,how to be personable, doesn’t have the passion, doesn’t have the resilience — I keep using that word a lot because my god if there’s anything that defines success and 45 years in retail is the fact that especially in Northern Ontario you got to be resilient to all the crises that come along different ways. From strikes, financial crisis, you can name them all over the last 48 years. So the team definitely has to be there but it really has to be you know, tell me the problem. They have to really convince me that the problem is out there and that your solution is going to make a huge difference it can’t be a ten percent improvement, it just can’t be a ten, twenty percent, and gotta be a huge number. So for example I’m working with a mining company here that their solution will bring each mine site fifteen to eighteen million dollars better bottom line, that’s huge. And I look at a company like iRegain the fact that they’re going to, there’s so many people suffering who can’t get proper support and help — may have to give you this real example here in Sudbury… There’s a doctor by the name of Dr. Michael Franklin, brilliant, brilliant young man. He’s got one of the best homes here in Sudbury, I only say that because he’s been very successful with what he does. He suffered a stroke two years ago, he could have had any kind.. he actually moved to Toronto to get you know help with some of the the best people in Toronto.. He had to come back and get treated by iRegain, within five sessions he immediately saw a difference. So you look at is there a need of something, boy you’ve got my real interest. And you’ve got people whose giving you purchase orders or lining up. Like I use it the example of their outside my store, I’ve got a big sale on and the line up outside to get into the store right. Obviously I have something that they want so you’ve got to kind of prove the same thing to me with a startup and I recommend that if you can get people lined up to say yeah I want that before that idea sounds great there’s nothing like it and if the value proposition saves me money, saves system and it makes me more productive — so I hope you get the understanding is that the messaging of what they have prove to me that people want it. You can prove to me that people want it, it’s like having a purchase order almost left the door and that really gets me interested.

Jeffery:
That’s awesome. And I love that to have the line up, you’re right it’s we just expect that we build it they’re gonna come. But if you can figure out a way to solve a real major problem and like you said with the mining industry, f I’m gonna save you 15 million dollars a year, I’m gonna make you 50 million dollars a year, you’re gonna love what I gotta say and you’re gonna want to hear and get me in the room so that I can chat more to it. So that’s very valuable. So we’ve got two more questions and the one is going to be the crystal ball question, so I’m gonna leave that one to the very end but the question I have now is I’m really curious if through all the last 45 years, if there’s one real cool story of a startup that you’ve got that you want to share, that kind of just really highlights where something came from nothing and really took off and if it was you know they were on the brink of failure and then they did X and then that just took them off. But I’m just looking for one of those amazing stories that you can share about one of your experiences that’s happened over time.

Peter:
Well I could probably give you two or three but I had to pick the recent one. I have to pick the recent one of Sheri Tomchick again and Plan A. I mean here’s a young lady when I first got involved with her, I think she was 39 or 40, and I’ve always had a very soft spot for mentoring women and and I’ll tell you why because they always get them, I think, the blunt end of the stick. They don’t get the real recognition, they don’t get the support, and a real kind of male-dominated type thing, and so I would tell you that when I started talking to Sheri she actually started the company many many years ago as a nurse in long-term care facility. She has such a passion for providing care for the long-term care patients. And she was finding that there are so many times that shifts were missed and so she said I bet you I can sort of get a combination between PSWs and nurses who want to work extra hours and I’m going to try to get them lined up with these long-term care facilities that are missing a shift. Because under the normal way, the normal way all of these homes would try if there’s the shift missing, they get on the rolodex, get on the film, they get on their fax and it take took about 45 minutes I mean that’s the average it was about 45 minutes to try to fill a shift. So all of that work and effort to try to fill a shift well she came up and developed an app and she owns the company, the actual software behind it called StaffStat and people get notifications within 25 seconds to 30 seconds and they can fill a shift. So she started off planning a long-term care facility just here in Sudbury and when I first got to her she was poor soul, knew very little about how do I take this idea to somewhere else, I mean she was just very trying to manage cash flow you know, she had two companies, so we really started talking and I said tell me everything about what you’re doing, what you and I quickly dubbed her I said look you’ve just got the uber ization of shift filling. You’re not scheduling, you’re not doing any of that, you are the best shift filler there is out there and there’s like a light bulb went off in her head just oh my god you’re right. So we quickly separated the companies the PSAPs that company was one way, the Plan A long-term care health care was another way, and we quickly looked at how we could expand because she was getting questions from other municipalities like North Bay and Suzanne Murray here locally right. So we talked quite a bit about how to form the companies, we had to get her companies properly structured, get the proper accounting at that time to help her which we spent a lot of times in terms of looking at the marketing and what she was saying and how she was doing it and the benefits of it and that story develop into what I just told you before — she’s just a firecracker and especially during this COVID crisis she’s then turned to many many different times a lot of people know the company called Booked Jane out of Toronto which has done extremely well, raised millions of millions of dollars and people compared her to that and I said no no you’re not like them. Here’s what happens because her pool of Plan Air’s she trains, she does a filtering work ,she does all of the assessment and the due diligence behind that individual and they become her official Plan Airs, so only these Official Plan Airs do they get to be put into the long term care facilities and each one are specifically working with each the long-term care facility. So she becomes a partner to the long-term care facility and she saves them all kinds of money, she makes money on the difference in spread what she spent you know as she matches her pool Plan A Airs to to the actual need and her uberization idea has just taken off like crazy now he’s got 27 or 28 franchises here in Ontario and she just opened up in Toronto she may be looking and she did it all and here’s the really does talk about angel investing she did it all herself. She bootstrapped she mortgaged, her husband bought into it, they mortgage their life the way they they bootstrap it themselves because I said with the right from the get-go so if you want to do this the fastest way if you’ve got assets you do it yourself. Trying to get angels trying to get government grants and money and all that they started off with you will have difficulty and you’ll be wasting a lot of time. So through all of this but she’s now ready to go to some of the next levels and she may be looking for some investment but we’ll see what happens there about she’s just a firecracker and I just love that story because I’m so proud of her because she kept mentoring properly, she worked her bun off, she’s sacrificing, she’s a great presenter, and she’s got a great franchise system.

Jeffery:
Oh that’s amazing. See that’s what I love the stories that come from what you had to figure out, go through all the tough stuff to get to the better part, and through that whole way she had someone giving her some guidance so kudos to you but that’s an amazing story and I’m glad you’re able to share that. So to take that exciting story and everything else that’s going on and I know you’re passionate about health care, where are you seeing on your crystal ball what are you looking at in the next 12 months in this angel investment world and then where do you see the rest of it going in the next three years?

Peter:
Well I can basically speak for Northern Ontario specifically and then I think it’s a little bit of a broader one. I think I may have shared to you that there’s a lot of interest by well-heeled individuals, angel investors, business people to sort of help fund the startup. I mean we’re talking about startups right. But as I told you they’re all busy running their own companies or doing their own thing and for them to do the due diligence, what to look for and what to do they’re saying Peter you know I love what you’re doing guess what let me know what what I should or shouldn’t do and it’s became very apparent to me to get people to come down to pitches, to do things here and in Northern Ontario because of a geographical spread, very difficult, so we’re forming an NOAA accelerator fund where we’re selling units in the accelerator fund at $1 each a minimum $50,000 or 50,000 units and we’re going to raise five million dollars over the next couple of years to really aim — will do it in tranches of course — and how we’re going to have then the pool that will have their own due diligence committee, investment committee, and we’ve got already a lot of people are very interested in participating in that because we do have a kind of a roster that we want to see over the next you know three to five years where we’ve deployed that five million dollars in startups keeping the startups and scallops here in Sudbury. So I’m very excited about that and I will continue mentoring with that, I have some replacements who will actually takeover the angel kind of work right two bright young people here in Sudbury, Cliff Richardson is his name and Jean Fançois Démoré they own their own wealth management company and we’re very excited working together as they transition to become the in a way a consultant for Sudbury by the end of the year. But I’m going to be still involved with mentoring them, maybe being on their investment committee and sort of continuing the process until you know my health stays up and the good Lord gives me the ability to do it for Northern Ontario. For Canada, for Ontario I’m quite convinced that with all of this talk about innovation and the government wants to do it and that it’s a real I think we’ve got a tremendous opportunity. Things like you’re doing yourself Jeffery I look at the number of startups and ideas that VCS at Lehman last year’s, you know last year and VC investment was one of the biggest ones in Canada, like six and a half billion dollars, and it’s way above what we normally do. I think during recent years, the average has been about like three and a half billion dollars but last year we blew it out of water. And I think COVID really put a real damper on this year, we may go back but I think the momentum is starting, we’ve got some pretty bright individuals in this country that really can sort of take it to the next level where we can continue going six ten billion billions of dollars per year just like in Israel (inaudible) almost raised they don’t have a yearly basis billions of dollars right. So I’m quite excited, I just wish I was younger and had better health and if part of it even more but I’m quite excited where it’s going, very optimistic that we are going to become quite a to force ourselves in this country.

Jeffery:
So it sounds like you’re predicting that Canada is going to be a bit of a juggernaut in the early stage startup space more than we kind of already are and there’s a lot of bright minds out there, if the government can keep getting behind it — there’s gonna create more opportunities.

Peter:
Absolutely yeah. Keeping my fingers crossed, that’s exactly it.

Jeffery:
Oh that’s brilliant. Well Peter, I appreciate all your time, I think that everybody learned a lot, I learned a lot, and I’m a fan of taking notes, so I’ve been writing like crazy so I think everything you had to say and share from the types of investments that you look forward to when you get behind on a start-up, the CEOs, to all the content, and stories you shared it was phenomenal. I thank you very much for that, you’re an incredible man and you’ve done a lot of great things and you’ve helped a lot of create a lot of startups get their ass off the ground and do something. And I’m only choosing to use the word ass because you were the first person to cuss in our interviews and I want to take that one extra level making sure that I’m supporting your passion for that but I do appreciate, man you’ve done incredible work. And just like the iRegain guy said that you’re a rock star and I’m glad that we got the opportunity to chat today and go through all of this. But I appreciate it and please launch that that fund and if we can participate in any way please let us know but I think that’s a great initiative and I think it’s gonna make a big difference in the Northern Ontario side of things.

Peter:
You’re very welcome and thank you for the opportunity and pleasure to meet you and sure we’ll be communicating as we go on. Good luck!

Jeffery:
You bet. Awesome thank you very much Peter.

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