Jeffery: Welcome to impact investing brought to you by supporters fund dot com for the student visa capital of the world Toronto Canada I’m your host Jeffrey JP Potvin and that’s please welcome from the longest underground shopping complex in the world with to 1200 stores and 30 kilometers in length in Toronto Canada, a Aditya Aggarwal, partner of BDC Industrial Innovations Fund. Welcome, Aditya how are you feeling? Thank you very much for joining us.

Aditya: Thank you. Thank you, Jeffrey. Glad to be here. Doing well. You know, we’re hitting this bout of late summer weather in Toronto, so could couldn’t be excited before we get into the cold fall and winter here. So so so glad to be here.

Jeffery: I love it. And I do see that things are going to change this weekend. I think it’s going to start raining and temperatures are going to drop in half. So I think we’re at that exciting moment where it’s got to get outside in the next two days before the sun disappears and hopefully it comes back. But it will will only pray for that.

Aditya: Yeah, I’m I’m hoping I get to get at least one more round of golf over the long weekend, the Thanksgiving weekend before, before I put my clubs away.

Jeffery: I love it. I love it. Well, I’m pretty excited to have you join us today. And the reason, of course, is that you’re part of one big conglomerate of investors in Canada and, you know, we don’t always get the opportunity to really understand how this behemoth of an investor comes into it. And I say behemoth because in Canada we tend to have a lot of areas to do investment, but you don’t always have one big player that just really does a great job. On investing in a lot of the great innovation that’s coming out of Canada. And you see this across the globe and everybody’s trying to kind of match up to what cannabis built, especially in this early stage and mid-tier ecosystem. So it’s very exciting to have you to be able to kind of chat through some of this and get some learnings from you. But on the other side, I think the other side excites me is that you’re also an engineer by trade, so I don’t always get the opportunity to talk with a fellow nerd, I guess, or a software hack, I guess. Or how would we want to call it, But I’m very excited about that side as well. So but to jump in and get this show started, the way we like to start things off is we want to learn a bit more about you. So if you could share a bit about your background all the way from your schooling days through Dalhousie, all the way through to everything you’ve done today. And then one thing about you that nobody would know.

Aditya: All right, good. So maybe I’ll start with the first part of the question. You know, my background, as you said, I’m a technologist at heart, and by trade, you know, I was never in the financial world. And if you would have asked me 20 years ago, 25 years ago, what I would have been doing in my where I am today, I probably the answer would have been very different to where I am. So, you know, I’m a computer software engineer. I spent four years in India, Bangalore, which was at the time the you could call it the Silicon Valley of India, probably still is. And there was a big push right around when I joined engineering school. There was this whole conversation around Y2K so that the switch of the millennium, 1999 to 2000, everybody was talking about Y2K. So tons and tons of money was poured into it, come from the aerospace company in India to just solve that problem, which kind of created a buzz around, you know, everybody wanted to be a software engineer, a computer engineer. And growing up in that that period which led me to join engineering school, I started as a chemical engineer and eventually switched switched to software engineering in my fourth term, which was interesting. I did the initial one on one on fluid dynamics and then so on before I started programing with C C++ back in the day. So, you know, as soon as you graduate, there’s always an option of working for one of the large service I.T services company and then the companies and then I had some of those opportunities as well. But I said, why not go abroad and, you know, explore a little bit more and try to solve deeper technical studies and topics. And then up in Halifax, Canada. E Scor So you mentioned the student visa population of the world, Toronto, but Canada is much broader than that. So, you know, China is not the it is the core. Yes, but there are a lot of other good schools on the fringes as well. So Halifax was very interesting. You know, that city has evolved quite a lot since when I came in 2003. I went to the computer science school for my master’s in computer science, and I picked the stream machine learning back in 2004. You know, So it is quite the joke today that I make is in a back then the only thing you could do after a master’s in machine learning was do a Ph.D. are going to research or work for a call center right. It was it wasn’t something that is, as you know, novel and I don’t know, sexy as today everybody wants to be doing some sort of machine learning anyway. So I spend a couple of years at my research in that the problem that we took on was a classification problem and in biology, which is related to classification of protein sequences. So it was quite relevant from a research academic point of view. And then as you know, that been that doesn’t really pay the bills. So after I graduated I was like, okay, what’s next? So I had this flu opportunity in Halifax because I was like a programmer at heart, wanted to do a lot of programing still. So I joined this startup. It was acquired by AOL and the voice over IP domain, I think of 2004 or five. Skype was the way everybody was, you know, was over IP kind of replacing phone lines and what we can do with IP based phone conversations and systems. So it was a very cool opportunity. We were with the company at the height when the platform that we worked on had the biggest number of subscribers in the world from a from a chat perspective to go in users, right? So those numbers seem small today after the, the, the Googles and the Facebooks Metazoans Instagrams of the world, WhatsApp as well. But at the time they were one of the largest platforms to our users. So so that was interesting. And then for personal reasons, I moved on the East Coast, New Brunswick, you know, so if Halifax was small for somebody coming from Delhi as much, Bangalore and India, think about Fredericton. So so a city with 50,000 people, the biggest shock was, okay, we are the people. When when I landed in New Brunswick, Fredericton on a Sunday, probably a good 20 people on the street. And I was like, okay, this is a Sunday. Okay, Well, see, more people have come Monday. Okay? So Monday comes and rolls around and there are probably 50 people on the street. So it was a bit of a shock, but I cannot complain because I spent ten years in Fredericton. I spent five of those years with, again, programing deep R&B with a company called Caris, which was eventually acquired by Teledyne Systems. So we were one of the unique in terms of building the ocean mapping. So if you’re on a boat, yard or anywhere else operating a port, the software that you’re using for managing the waterways, navigation and so on was probably built by that company. So it was it was very cool. And it was the same time when Google Earth was taking off on kind of the land ecosystem and we were on the ocean side with Israel as our biggest competitor. If you were in that domain, you would have heard that name quite often. And then, you know, people a headhunter approached me. I landed at Siemens, was one of the first few hires at the new R&D center that they were setting up. Join them again as a software engineer. And, you know, it is interesting that I spend that time in New Brunswick and the opportunity to work with this PM of a Fortune 50 company, Siemens Setting up R&D Center. I travel so much with Siemens out of New Brunswick that gave me a perspective that having me and not have. If I would have landed in Toronto and took up a job, maybe not with a traditional company and I would have gotten lost in, you know, small fish, big pond, big fish, small pond, kind of an analogy. So with Siemens, I spent about eight years various different role, as did a couple of multiple jobs on online promotions, traveled the globe, spent time in Europe, U.S., worked with some of the largest investor owned utilities in the ecosystem, solving problems that we are talking about today around demand response, renewables, bringing those renewables on the grid, balancing the grid on the distribution side in terms of, okay, so is the grid even designed to handle that kind of variability? For example, how can we reduce peak demand? And all of those were business related questions then which have now become not just business related, but also have sustainability angles to them, which impacts some of the KPIs that people want to track directly. So it was a very interesting experience, right? And then just before COVID in 2020, like I said, I wasn’t looking for something in the financial world, but one thing led to the other. I ended up talking to my managing partner through a common contact, one conversation at two other, and I made a switch into the investing world with next generation venture Fund. The key there was I spent about four years at Siemens and three of those were reading panels. And, you know, industrial ecosystems, power, utilities, oil and gas, advanced manufacturing. So I had that operational experience keeping the fact that I was still a technologist at heart out there making sense of not just code but also numbers was was a plus. And with this fund, the focus was industrial innovation. So it was just, you know, made sense at the time. So so here I am, a technologist at heart engineer and investor that.

Jeffery: I love it. That’s a great, great background and so many great pieces of being across Canada and then obviously traveling globally. And of course we’ll kind of dig into some of this and peel back the layers of it. But before we do one thing about you that nobody would know.

Aditya: Well, a few people would know that are close to me, but it is that I was I was a very avid cricketer. I couldn’t break it into professional sport, but instead I ended up being on the board of Cricket Canada, which is the national sports governing body for a few years. So that was that was interesting. So I don’t share that a lot, but a few people know it then. Yes. Yeah.

Jeffery: that’s very cool. Very exciting. All right. So now we’re going to kind of peel back and talk a little bit about all these great things and kind of what built a career and what got you today where you are. And maybe one of the things that I want to jump into is that when you were working through this Y2K piece, there was a lot of urgency that was put on this. And I think we all kind of got to the state where at the time I had just recently started in I.T. at Loblaws, and I remember that it was all hands on deck, not two years in advance. It was like, this is happening in eight months and what do we do and what’s going to happen and how does this thing work? And so it was quite fascinating the changes that were going to occur because of this. And there was some planning, of course, in the software side, but maybe you can share a little bit about what that urgency and governance side of it went through when you guys were building out this product. Because I think today there’s a lot more emphasis being put on securities governance and how you manage these types of big overhauls that are going to happen inside of systems. Is there something there that you can share that will give people an idea, especially in the early stage side, that this is something that will continue to happen across networks all over the world?

Aditya: Yeah, now that that’s interesting, but I would put a qualifier there as that led me to do computer sciences. I wasn’t it was one of the product belts, but I was surrounded with people who were directly involved as I was doing my undergrad at the time. And some of their experience around it was all hands on deck, right? You know, five months, the clock is ticking. There’s only five months left. We need to fix all of these systems and in terms of making sure that this issue is resolved. So I don’t know the details on on governance, but what the learnings that came out of it is what I got acquainted with and we were taught about it at school, which plays into today’s systems as well as some of the aspects of design and should not be an afterthought. It should always be done as as a precursor. For example, cybersecurity. I would still argue that in most jurisdictions and ecosystems it still is an afterthought. Up until a couple of years ago, it didn’t even have a position like us, see, So it was Chief Information security officer. It did not even exist. And if it did exist, that person would report it to CIO. Right? But security is not just a function of I.T. A marketing team can go build a marketing database that could get hacked and leak sensitive customer information. But if the CSO is reporting to the CIO, they would not have as it went into something like that. So the industry is evolving today. I see. So as usually go report directly to CEO so that they have a full visibility. That’s one aspect, right. So so governance and in that design thinking should always be at the forefront of when you’re building software systems, specifically large enterprise wide systems as a startup, sometimes we lose focus off of those aspects. But I think that’s where in our experience and people are being cognizant of the fact that you cannot just build for scale and business continuity. You need to be able to build for robustness as well as other aspects of design.

Jeffery: I totally agree with that. And I think to your point where they had to shift around.

Aditya: Hopefully I answer that question and questions on the key points that we’re looking for, for sure.

Jeffery: Exactly. I think there’s also an interesting piece there that you talk about, which is the shifting from putting the CSO in place for one, and then who they report to. And today, when we’ve invested in a few different companies that fit in the quantum security space and other areas, it does seem to be an area that is really highly influenced today, which is this banner of security and how you manage that across borders.

Aditya: Correct.

Jeffery: So I think what’s what’s coming out of this in the future. And of course, as software starts to build out and from your engineering side of things, are you seeing a lot more companies really starting to put more emphasis on the security side and protecting their user data? Or are you finding that more companies are trying to segment this piece out and not even touch it? So they’re allowing for other entities to own the cost of their customer data because of the fear of a hack or disinformation being breached?

Aditya: Yeah, I think that’s a very good, good point. The way I would qualify the industry is that all of that is the the adoption of cloud computing right back in the day, you would basically on the full stack as a data center, you would have racks of servers, episodes that were within a physical location that you operate at. But cloud computing, I think a lot of people don’t get understand, especially in the domains that we mentioned, the industrial sector just offers some of these features out of the box. If you’re a startup building on top of some of these infrastructure providers and using some of their services, you’re covered, right? And I think that’s where things things are getting better. So people are still using bespoke systems and some servers that are located locally are using access based databases running on PCs and so on. But if you as an organization, you decide to basically use the benefits of cloud compute infrastructure, you address some of those concerns right off the bat. And as you are, if you’re part of a critical infrastructure industry, you know, sought to compliance, ISO 27,001 are key certifications that you ought to have, even if you’re a C, the rescue is a company, right? You can’t delay those for later stages.

Jeffery: Agreed. So now you have taken this experience. You’ve now moved in in your you’ve shifted over to running an operating inside of Siemens. And as you mentioned, you had the opportunity to travel and move around and learn a lot and get into a lot of different spaces. Is there in this was it acting more as a consultancy? So do you find that you were able to work on many different projects on all different sides of that, and what was the type of experience you gained from that?

Aditya: That it’s very interesting. Know, it wasn’t just one kind of role. It had various different aspects to it. You know, I was writing code for the longest time. I think up until even 2017, I had no responsibilities. I would so roll up my sleeves, work with my teams to to debug and understand what they were designing, architecting and building out. So there was a lot of deep software engineering involved, but at the same point in time there was a lot of customer facing. We were building our products and services on top of a platform. So I was enabling, you know, as one of the technical architects with technical sales on the product side, and then eventually when I had no responsibility working with C-Suites at these utilities, you know, getting them to understand the broader vision of what products and as well will help achieve and kind of bridging the operational technology gaps that some of these utilities would have and to the future when you know, you need to make critical decisions at a much faster pace. Did I lose you?

Jeffery: Hello, Ed.

Aditya: Hi. I think I lost you.

Jeffery: It. Yeah. It seems that the connection dropped. I’m not sure why that happened, but we may have to go back to that question and then keep going. It’s still recording, and I guess this is the bump in the road where Zoom will allow you to keep recording while I fall offline in this one. I don’t know if it. I believe it still keeps recording on your site, but we’ll have to play around with it and edit that output. If you could go back to the question and answer that when I apologize. I’m not sure why the network became unstable there for a second and drop me off.

Aditya: But that’s okay. I think the question was different rules at it at Siemens, what were the aspects around them? So I said, and I was deep into the trenches, still writing codes as a software engineer, understanding our architecture and what we were building, but also supported our sales as a technical sales guy. And then once I inherited the responsibility working with the C-suite and the EVP, that these large investor owned utilities about making them understand why software is going to be a critical component of their distribution networks as the volatility in and the grid itself changes, as we move from traditional power generation plants to more distributed energy models with solar PV, wind and storage as well. So so there was a lot of a lot of that. And I think that’s where you you could argue that I gained the most well-rounded 360 experience of product marketing sales finance shows as well as architecture.

Jeffery: That’s awesome. So in this experience that you’re gaining and you’re moving through, you start to shift out of code and focus more on the panels side, which is giving you more exposure, exposure to the financial aspects of the business. Now, were you were you operating inside of each of these projects on the financial side? So as that financial officer for each one of these. So with that gained experience, did you find that this is what’s really helped you today, working with early mid-tier companies on helping them better understand their panels, their budgets, their financial forecasting, where a lot of that information was built during that time?

Aditya: No, that that that’s exactly it is. Right. So that’s a key piece. As an investor, when you come, you could bring multiple hats. It can wear multiple hats and bring different experiences to the table. That’s where I think I had a lot of value, where there are a lot of gotchas in the industrial domains that we support and invest in companies. It’s not a typical B-to-B enterprise size, you know, where you track against, you know, typical SaaS KPIs or LTVs tax and IRR, even though we still use those terms and the companies that we invest in because for example, a sales cycle for for a typical SaaS company to go from, you know, 100 subscribers to 10,000 subscribers may only take eight months, 12 months if they’re are hitting that hockey stick curve, as we call it, investors call it. But that’s never going to happen in an industrial digital software company because their sales cycles on a good day could be 4 to 6 months and then average is 8 to 12 months. Right. And if you’re selling in some a sector like automotive, forget it. Like 12 to 18 months is to close those enterprise level accounts. So I think that’s where I bring a lot of experience. Having been through that with my experience at Siemens is it’s been a game of being patient along with being able to deliver value as you continue on on the journey towards a big scale up with these large enterprise customers.

Jeffery: And in from working with these companies and certainly using a Serta or in the automotive space and working with them and learning how their sales forecasting and how their sales cycles work. And as you mentioned, it’s 12 to 18 months, which you’re implementing these large, large systems. They’re going to take a lot of hands on to kind of put these in. But they’re seeing large benefits from either bringing the teams together from a communication standpoint or cost savings. And what did you find were these larger, longer setup sales cycles? What were the maybe one three points of what was really the value add that your customer felt that they needed to start testing this? Because when you get on something that takes 18 months to implement, you kind of lose win too. Why am I doing this? Is there really enough upside value? We have our own systems. Is there some learnings that you gain from that to say, you know, a lot of businesses will push back, but here’s some learnings on how to get them more convinced because 18 month sales cycle isn’t exactly slow or fast and it doesn’t exactly bring you a lot of investors that are intrigued by this long duration of sales cycle.

Aditya: Yeah, I think that there are two aspects to that. One is the implementation and especially may not take 18 months. It’s just convincing the right stakeholders to scale up. The technology picks sometimes 18 months, but the ROI is usually generated in the first three or four months. When you do a quick dirty product with these customers, right, Because they always have a clear need of what they want to do. But sometimes what is hardest to articulate that need and actually attach in our way to it. So for some of the companies that we invest in, you know, you could argue that they’re very good at showcasing that need and proof of value within that first couple of months when they engage with these customers in the conversations. And once you’ve done that, the goal then becomes is can we get one or two production licenses? And that starts the recurring revenue to come in. And you know, you need to convince one person and then that opens up the box where you could scale very quickly. Right? So some of our companies, they’ve gone from one plant, one line to, you know, multiple plans geographically distributed in North America, Europe over the course of 12 to 15 months after that full sales cycle. So so investors some of the key aspects of us as investors in this domain is to understand that, you know, is there a value prop that the customer sees quickly? And then once you’ve got them and it’s an account based scale up, it’s not it may not necessarily be chasing every level under the sun, but it could be, you know, you’ve got two or three really big labels that see the value.

Jeffery: So this value principle that you’re talking about, what are some of those pieces that the customer really is going against? Is it building efficiencies? Is a cost reduction Like what are the ones that they typically say, if I don’t have these, I’m not interested.

Aditya: Yeah, well, the biggest one that always is top line gains, right? But everybody’s interested in that. If you if you can show a top line direct correlation to a top line gains about it. But in certain situations it comes through productivity increases and reduction in cost, which impacts your bottom line. But it needs to be a direct impact there as well. Where companies could fall flat is if there is none of those two impacts, like if you if you see operational efficiency. Yes. But you don’t know where it makes an impact, whether it’s the top line or the bottom line. And then that’s the challenge. So I think those are the kind of two key considerations. When we look at companies as can they either impact the top of the bottom line and how fast would that impact be seen?

Jeffery: So speed is always going to be an element of this. So when these customers are looking at this and their large customers Fortune 500 customers, you know, they have sales cycles, they have costs, they have efficiencies they need to build into their models. So when they’re looking at this, I’m assuming the companies are putting together fantastic case studies. They’re walking through with other customers this information that’s going to be readily available to them, they can speak with those customers. Are there ways that you guys also offset some of this by validating it going through the code? Are you doing things as well to help with this process so that in their case study it’s saying, you know, BDC went through and did a 50 point check on our code and it shows that this is validated. AI’s working all this good stuff. Like are you guys also doing things that build credibility into your customers?

Aditya: So no, we are patient investors. We are active investors, but we want to go deep into that level because at the end of the day it’s the entrepreneur that’s building the company, right? So so we’re happy to support them as investors, we will bring our entire network back. For example, I make a lot of introductions to through my mentor business network as well as personal metric that I built over the course of the last few decades, exposed the right people from that network to the companies. In some cases, you know, we expose them to people who are experts in product management or marketing or sales functions, and that’s how we help them. And in some cases we would have that expertise too. But we want to make sure that we provide the best put the best foot forward for our companies. But we’re not a certification body where we would say, okay, we’ve done this sort of a 50 point inspection and we confirm this. That’s that’s the company. And then they have other entities who are experts in doing that. If that is needed. Fair.

Jeffery: Now, when these companies are onboarding their potential clients and their verticals and their focus is there on your investment side, the companies that you’re investing with, are you coaching them as an overall structure on how to focus in on each of these customers in each of the verticals? Like is there that hands on experience that says a company A we’re investing in you in this vertical is a really good vertical. We see you guys operating in here. We’ve got some efficiencies. We’ve got a couple of our key analysts at work in this space. We’re going to help you onboard these customers and we can help you cut back that time so that it speeds things up a little bit quicker.

Aditya: Yeah, Yeah. We definitely provide that that service from from a business perspective, like whether if our company is, you know, one of our principles is helping them create, you know, dashboards that will sit on top of their CRM to get efficiencies on the sales process. And one situation I was working with the company where we looked at the overall stack and then help them see, okay, how could we, you know, reduce some of the costs so that the teams go up and the gross margins go up. So we do do that on a nearby basis because one of the philosophies that we have as an industrial innovation venture fund is when we invest, we invest with conviction, and we also want to be able to help the companies as much as we can by being on the board as a director or an observer. So so we are structured that way as well. So we will never go and have a 50 or 60 portfolio company because we know as partners and principals on the team, you know, you’ll get stretched thin. So our investment focus is, you know, I would be maybe on for a maximum six boards so I can go deep with these companies as they need assistance or, you know, just brainstorm ideas. But I will say this, you know, and this is kind of on a different note coming from an operator as an operator from the industrial world, you know, being a VC is a bit of a change because you’re a little bit more passive than active. You’re not driving the bus or a rocket ship here in this case, right? You’re not the pilot and the messenger, not even the copilot. Right. So you’re you’re the the tower, the ground crew. This was controlling it and giving them some instructions. But so that that takes getting used to for sure.

Jeffery: There is a bit more of guidance versus diving in and helping them rebuild their system.

Aditya: Yes. Yes.

Jeffery: You mentioned that you get the opportunity to jump on boards and I’ve seen that you’re on a few different boards and one of them in particular, which is a search and they just not too long ago raised a series B round of investment. When you guys are working and putting in the capital into the business and as you mentioned, you’re doing different facets along the way to help guide and manage through with your portfolio companies. When you choose to go on to a board specifically into a a software innovative company that is scaling, when you’re inside of that, do you find that having that board seat is really allowing not just you but your entire team a better view into being able to help solve other problems that you may not have even imagine were going on inside the business?

Aditya: Yeah, I think was always the that aspect when once you are on the board you, you see some aspects and it’s not just helping that one particular business that you’re on the board of, for example, there are learnings that you can bring back to the team that make it apply to other portfolio companies where we have board seats, right? So how did this company in the industrial domain cut short their sales cycles from 12 months to six months? What are the key levers that they they kind of turned? Can we use them somewhere else? So so that’s a very good way of understanding not only going one but also learning and adding value on the others. And at the same time, like I said, for example, with sort of we’re co-investors with that type platform. So there are aspects of the ecosystem that they have expertise in and then they have an observer seat. So they come in and help with, let’s say, the financial aspects of the business sometimes in terms of, you know, balance sheets, income statements and how do we provide some optimized options within the financial aspects of running the business. So we’re always open and we’re always adding value and learning. And, you know, it’s not about one way, It’s it’s two ways. So we learn and implement it somewhere else to.

Jeffery: I love that because I find that as you start to grow and scale your business, everybody has points of view and it’s not always easy to take and disseminate across all bodies that are part of this. So how do you really shape that up and utilize your team and you have a large team? How do you utilize that team and the knowledge that they carry across different boards and different groups to ensure it benefits the company that you’re working with at that time? And I think that cross communications, but of course now you’re getting into other investment groups that are also part of it and they have skills that you can utilize as well. So there really is a big portion of that which is helping on the communication side to ensure that these boards are providing enough feedback and direction into the business so that they can make the decisions they need to in order to move and build that business forward.

Aditya: Yeah, exactly.

Jeffery: And all of that’s going to come at a time and an expense. And because your team is dedicated to do this, I think that’s a certainly a great learning for your team, but also for the company you’re investing in. Now when you look at these portfolio businesses and that you’re on boards and the restructuring them, is there anything that you would say to a founder? What’s the right time or what has been the right time for those founders to start putting together stronger boards or making the changes that they require? Did you of found over the last few years that you’ve been operating inside of this investment group where you say this is the perfect time series? A You’ve got to have at least five people, Pulse of domain experts. This is where we got to start scaling your business.

Aditya: Well, that’s always the case, right? So how we complement the organization, at the end of the day, the board is the oversight, right? And the board’s fiduciary duty at first and foremost is to the corporation. And I think as VCs, that’s how we always look at it, that that is the the first role. And if the time is right and the company is ready to scale and expand the board, we should always do that. Like there have been instances where we have let go of our board seats so that the right people can come in at the right time for the company. And we’ve expanded some of the boards where we have added key independents on the board that bring a lot of domain experience, industry experience in addition to what we may bring or other investors may bring. So so we’re always open and we’re always mindful of what is the best for the company, right as board operators, that that’s our first and foremost way of handling those situations.

Jeffery: I love it. And because you’re coming in at, I would say, more mid to later stage investing in the series A, B and C, Have you found that when you are coming in at these pinnacle moments of where they’re going to start scaling and the capital that you’re bringing in, are you finding that the companies are more mature at that stage? Are you finding that there’s any anomalies that you’re looking for or does it all seem relatively close? It fits your thesis. They come in, you make an investment and move forward, or do you find that you’re looking for these slight anomalies in the process because you’ve been doing this for so long that you’re like, Nope, make sure the company has this, this and this, and then you guys will be a great qualifier to invest.

Aditya: Now, I think that’s a that’s a great question and kind of how we qualify investments, I think is a function of our domain focus as well. A not a lot of investors are as domain focused as I see it. You’ll find a lot of generalists and the few things that we pick up as domains, passive investors, right? Because 60% of our portfolio has some sort of 100 element. This is an example I will give you. And one of the key things that we always look at is if it’s a novel hardware product or a sensor or a device, what is the most critical component or what are the first three most critical components, and are they being so source, for example, And if they are being so sourced, who’s the supplier? What is the capability of that supplier? Can the supplier scale? And as the company scales right over the years, we’ve built an experience that, you know, you can’t ignore this piece, you can’t just focus on the software side and say, okay, hardware, we’ll just work out of the box. What what happens if that critical supply runs up like what happened that they can’t source a key component that is needed to build that component so this company can use. Right. That’s a good example of where we always go to the depths of both hardware and software and understand not just what the design is, but also understand the supply chains that are required to build those systems before we invest. As an example.

Jeffery: And that’s a that’s a huge factor. And I guess sometimes you’re not always thinking that I’m investing in Company A, but I got to make sure A, company B, C, and D can also support Company A if they’re scaling with the amount of money that we’re throwing in this with the rest of the investors. If those other three businesses can’t qualify at scale at the same time, you’re going to be in a pickle because you’re going to grow faster than your suppliers can maintain the volume to get you the product out to your customers.

Aditya: Exactly right. So so sometimes that that’s I think that’s maybe where the decision comes in is do we bring something like that in-house, you know, raise more capital and now we’re says, you know, keep keep it outside of the company. But those decisions you make as a business scales and how things things are right.

Jeffery: And if you found we I was in a with a podcast yesterday and one of the individuals that when he was investing he actually was investing in the companies that were supporting his primary company. And they were doing that because they wanted to make sure that those other companies were offsetting and affecting the primary investment.

Aditya: Yeah.

Jeffery: So I find that fascinating. And these these gentlemen, they’re they’re actually building an underground tunnel from Helsinki to tenement. Okay. So it’s a 103 kilometers underground tunnel. And they had said, you look, we’re building this project. We’re in year six. We know we’ve got at least, you know, another 6 to 8 years before it’s fully built. It’s going to connect to airports and everything else. It’s pretty, pretty amazing to be, to be honest. And once they put this together, they’re investing in the companies that are investing in their primary company, which is the one that’s putting this entire $15 billion project together. And they’re investing in all of the different startup companies that they see are going to be able to support what they’re doing to make sure that those companies are growing and scaling at the same time that they are, because if they don’t, they won’t have the support in the next five years once that train is now operational, once they’ve finished burrowing those tunnels.

Aditya: And that’s very interesting. So for us, I mean, if that company, Fitzroy Investments is as and is in Canada and they’re building something cool, we’ll always look at them or maybe some of our sister funds could look at them. So so again that always this is an opportunity.

Jeffery: I love it. Is there any advice that you would give around on the board side, things that you would want to help CEOs today think about for the future when they are putting that board together? Is there something around governance or anything that you feel is, again, sometimes it’s a miss or is just over read because they’re not paying attention to it? Are there certain facets of how a meeting should be run versus how it shouldn’t? Are the things that you’ve picked up on that you really like and say? I think everything angle board meetings should do X or or whatever those things are. Maybe you could share a little bit about that.

Aditya: So that’s a great question. Right? And as I got more experience out of being after spending time on some of these boards, there’s definitely a few things that stand out. So if I were to pick the top two, the first one, I would say board meetings should be efficient and quick. They should not be a three or four or 5 hours strategy session, you know, hour and a half to 2 hours. That touch on key KPIs of the business, you know, top line, bottom line revenues, key customers, key deliverables, implementations and then key risks across the next few years, along with a comparison against the three year operating plan. I think that’s what a board meeting should be. Quick, concise, precise and done. And I think the second part I would say is being a board member, you know, as a as an entrepreneur, if you’re looking to see who you should bring on the board, I would say don’t think of it as, you know, you’re bringing somebody who is going to be working with you. 24 seven. I think the board’s responsibility should be that they’re there to offer solutions to problems that may or may not exist. Right. And they can help see problems that you would probably experience in the future. But the sentiment from the board or the member who’s coming on board should always be that the entrepreneurs know better than the board members themselves of what they’re trying to do and build and solve. Because, you know, you’re investing in the company because you believe in the company, right? So you need to be able to believe in the Premier as well and let them know where could help and be better and better focused. Right. So that’s what you would want in a board member. You don’t want somebody come in with a stick and say, okay, I’ve got this experience. I know is the only way to do it. It is my way or highway. You don’t want to go like that. And that’s just my experience.

Jeffery: I wholeheartedly agree with that. I support that. And I do agree that you don’t want it to be weighted one way because somebody dominates the room because of the amount of money they brought or the experience they think they carry. It really comes down to to your earlier point, which is you’re there for a guidance, they’re there for feeding information, helping resolve concerns. But at the end of the day, you’re supporting the entrepreneur while backing and taking care of all of the investors. That line up behind, you know, I love it. That’s all very, very insightful and great knowledge that you’ve shared. We’re going to kind of shift now into our next module and before. But before we do, we’re going to ask I’m going to just jump into one question and the first question before we get into this 62nd rant. What’s the toughest lesson you’ve learned to date as an investor?

Aditya: I think the toughest lesson was initially when I started in this world was being able to say no right at sometimes it’s hard to say no. You’re excited about the technology, but something else is not right. Are you excited by the business? But something else is not right. So so coming from an operation as well and as a technologist at heart is saying, no, I think it’s that’s an art of of saying no. Because as a technologist you get excited by every technology company that comes and pitches and you know, it takes getting used to it.

Jeffery: That’s a that’s a great answer. It is. There also the ability when hearing no to ask questions, to learn what the know is, And do you think that that’s valuable for the entrepreneur to do?

Aditya: Yeah, I think that’s valuable for the entrepreneur to do for sure. But I think that where sometimes that falls flat as VCs are not open in sharing why they said no. But I think as if you want to help the entrepreneur and get value even from that, no, it’s always good to get them at least not just a bird’s eye view, but a little bit more details of why you’re saying, though, that will help them go a long way.

Jeffery: Yeah, agreed. Is there do you have a case study that you could share on what it takes to be a founder like of all the companies you’ve seen, maybe you thought one that great, they got away and they took off and did a great job of building their business or, you know, just some of that. What the grit or what it may take to be a founder and the case study that pops into your mind that really emphasizes what it takes instead of the glorified I build a company, sell it for $1,000,000,000 is there you know what it takes that we’ve seen a lot of that.

Aditya: Well so I haven’t seen a lot of that because I’ve only spent four years in that domain. So I would have read a few articles and so on. But there are some companies, you know, that that you could potentially see in our domains that have gone through that cycle. You know, there’s a company that recently got acquired more than that recently, a few years ago, got acquired at the height of COVID by Autodesk. It’s called Up Chain. So I would recommend people in reading up on that and the story of the founder there. I know him well. He came from he was actually at Siemens at a point in the industrial domain selling software into the industrial ecosystem, decided to build his own company, you know, had the same, you know, experiences and challenges scaling that business initially, but through grit went through that ecosystem and both it and you’re not talking about a young entrepreneur, right? You’re talking about somebody who seasoned to spend 20 plus years in the ecosystem. So to do that at that point in time, your life is actually very interesting as well.

Jeffery: Great. And they’re now saying that that’s where you get the best Entrepreneurs are the seasoned ones where most they’re coming in and they’re between their forties and sixties because they’ve got a, you know, they haven’t proven why yet, but they’re saying that they’ve just have that domain experience which just allows them to maybe navigate a little bit easier than someone coming fresh out of school, I guess.

Aditya: Yeah, Well, it doesn’t fit specifically in the investment ecosystem like that. It is kind of a different beast. Rather than getting a B to B or A b, C software company for sure.

Jeffery: Yeah. Okay. We’re going to go into the 62nd rant. So the way this works is you have 60 seconds. I’ll show my hand when there’s 5 seconds left. And the idea behind it is that you had 60 seconds to rant about anything that you think is rentable. And then I will throw something back at you and then you’ll close it off.

Aditya: Okay. And we’re ranting about stuff in the venture capital domain or I think about personal stuff. I want to be careful here.

Jeffery: You can rant about anything you like, anything you like, and we’re going to use this as a way to drive people to company. To take a look at the podcast. So 60 seconds on whatever you think that you think is phenomenal that we want to talk to.

Aditya: Okay. All right. Tell me when. All right.

Jeffery: Go.

Aditya: All right. So that the thing I want to random a little bit about is my experience that I’ve gained over the last four years in kind of the Canadian ecosystem and venture capital ecosystem. I think it is very different when it compared to the side of the border. So the rant is I think we as investors in Canada, not just our organizational work, we do a great job, but others are.

Aditya: We need to be a little bit more bold, make bolder bets and be able to support our companies to scale globally. I think you hear a lot of Canadian entrepreneurs going south of the border, raising these big, big checks and big rounds, and it’s kind of become a culture or a way to to do rounds, especially over the last three or four years. They just see value being added. But I think there’s a lot more value to be added with the investors that are in Canada. And I think where that needs to shift is investors need to get a little bit bolder and being able to support these companies on their board, which ends up making global leaders.

Jeffery: I love it. That is a perfect read. So I’m going to counter by saying, Well, Canada’s kind of a small country. We’re happy being here. We’re the tree hugging capital of the world. You know, we don’t really look to get outside of our domain. We’re all polite. We don’t want to be pushy against the grain. You’re saying we need to be bolder. But really, at the end of the day, we have a tough time saying no. And you shared that, that it was a tough learning for you. So how do we get around the abilities that, you know, we’re we’re bringing a lot of smart people into the country. Hopefully we can keep them all. But at the end of the day, we’re not very aggressive. We don’t have that capitalistic mindset. We’re a socialist hugging community. How do we shift that so that we can be to what you just shared, which is more aggressive, pushing the envelope, putting more money out there and risking more all the time How do we do that?

Aditya: I think I’m going to be a little bit controversial here. Hopefully I don’t get beaten up by somebody. But I think as individuals, Canada is not back. If you think about there was a stat that we ran that’s published by the University of California, top five countries that contribute to either unicorns or large startups coming out of South America. If India, Israel and Canada is in top five, it’s just we move down south as a personal object to build those companies in the US. So I think as a society, as a as a community, we are labeled that. But as individuals we have that mindset of building big, doing big things. So I don’t know how to solve that problem today, but I really don’t like that label that, you know, we don’t like to do big things. We do. We just choose to do it somewhere else.

Jeffery: I love it. Well, hopefully the the American capitalistic market sees that and keeps jumping on the businesses that we’re building and take them to the glory days, because at the end of the day, it creates a lot more value, wealth and roles and jobs in Canada. And hopefully we can keep doing that to your point and we can get rid of the the tree hugging capacity and start building a bolder community for sure. I love it. All right. We’re going to jump into the next segment, which is Rapid Fire Questions. These are pertaining to the business side. So you pick one or the other as an investor.

Aditya: Okay.

Jeffery: Founder or co-founder.

Aditya: Founder.

Jeffery: Unicorn, or a four year ten x exit.

Aditya: For your time.

Jeffery: Tech or CPG.

Aditya: Tech.

Jeffery: NFT or Web 3.0.

Aditya: Web 3.0.

Jeffery: AI or blockchain, while a first time founder or second third time founder.

Aditya: First time founder.

Jeffery: First money in or series a.

Aditya: Activism.

Jeffery: Board seat or observer.

Aditya: Board seat.

Jeffery: Save for convertible note.

Aditya: None. Is that an option?

Jeffery: It is. It is, of course. And what I guess I’ll ask, what do you guys prefer? What do you guys typically go in that.

Aditya: Straight up equity?

Jeffery: I love it. Leader Follow.

Aditya: Our lead.

Jeffery: Favorite part of investing.

Aditya: Getting to see a lot of cool technologies.

Jeffery: Need to number of companies invested per year.

Aditya: Anywhere between two or four.

Jeffery: Love it verticals of.

Aditya: Focus. I just love industrial software AG and food and manufacturing.

Jeffery: Two qualities for a startup to stand out.

Aditya: Novel product and conviction in the market that they’re selling into.

Jeffery: I love that conviction. It’s a good one. What piece of advice would you give founders? Nine out of ten times.

Aditya: Don’t give up if you believe in the product in the market.

Jeffery: Do you have a philosophy or rules that you stand behind?

Aditya: App philosophy and rules is always be open, contentious and mindful of that you’re supporting people in their dreams.

Jeffery: I love it. Who is your hero or mentor and why?

Aditya: That’s an interesting question. So I would say I spend a lot of time discussing some of these with with my father. So he’s has both businesses had successes and big failures as well. So there’s a lot to learn from him.

Jeffery: That’s great. What is your biggest fear or phobia in the business startup ecosystem?

Aditya: That is interesting Hype.

Jeffery: there’s a lot of hype. That’s good. We could do a whole segment just on hype. Yeah, I agree. Yes. What line do you find your share to investors over and over?

Aditya: I’m sorry, Can you repeat the question?

Jeffery: What line do you find you share to investors over and over again?

Aditya: It’s a great company to invest in.

Jeffery: I love it. What is your favorite investment you’ve made today?

Aditya: You’re going to pick Make me a pick. It’s a small robotics company out of Hamilton. We came in seed stage called Skynet Robotics.

Jeffery: I think I am aware of this company. I love it. Is there any references of podcasts or other things that you read or go into on a daily basis that others would might want to follow?

Aditya: No, I read everything and everything under under the roofs and I teach TechCrunch plus a lot of these C podcasts and so on. So there’s nothing that I focus on specifically.

Jeffery: Okay. All right. Personal questions. Most famous person that pops in your mind are controversial.

Aditya: Again, could be La Musk.

Jeffery: First brand that pops in your mind.

Aditya: Space X.

Jeffery: Book or movie.

Aditya: A movie.

Jeffery: Superman or Batman,

Aditya: Batman

Jeffery: Fortune Cookie or birthday cake.

Aditya: Birthday cake.

Jeffery: 5 minutes with Bezos or Oprah.

Aditya: 5 minutes with Bezos.

Jeffery: Mountain or Beach.

Aditya: Old Beach, maybe.

Jeffery: Bike or Run.

Aditya: Run.

Jeffery: Big Mac or Chicken McNuggets.

Aditya: Big Mac.

Jeffery: Trophy or Money.

Aditya: Trophy.

Jeffery: Beer or wine.

Aditya: Beer.

Jeffery: TED Talk or book reading.

Aditya: TED Talk.

Jeffery: Facebook or LinkedIn.

Aditya: When Ben and I closed my Facebook account of years.

Jeffery: Favorite movie and what character would you play?

Aditya: Well, it’s an easy one judgment there. Terminator two. I will be back.

Jeffery: I love that. That’s also our favorite book.

Aditya: Our favorite book is The Alchemist.

Jeffery: Favorite sports Team.

Aditya: Favorite sports Team. That is interesting. Arsenal, in which we.

Jeffery: Did you say Arsenal? Yes. My God. You’re like the first person of all the interviews I’ve done. That’s an Arsenal fan.

Aditya: really?

Jeffery: It’s incredible. Yes. I used to say, Do you like Arsenal or Manchester? And everybody would pick Manchester. So I stopped beating myself up that there wasn’t any Arsenal fans. So I refuse to use that question. And now you’re the first one, so this is phenomenal. I’m hitting the red green buttons. Woo! That’s all you.

Aditya: Got?

Jeffery: That’s very rare. But if you’re in Rwanda and places like that, there’s a ton of Arsenal fans, but I’m not sure where they all are in North America. They seem to be hiding. So it’s pretty cool that you’re an Arsenal fan.

Aditya: Yeah, we have a few.

Jeffery: I think it’s because we’re always mid-pack and we can’t seem to get anywhere in the top five. Until this last past season. So maybe this year we’ll pull, pull through and make it to the top. Exactly. I we’re almost there. What’s the meaning of success to you.

Aditya: Being able to make my own decisions without having, you know, somebody knocking me down?

Jeffery: I love it. And lastly, what is your superpower?

Aditya: My superpower is awesome accuracy of being too analytical.

Jeffery: Well, I’ve never I’ve never had anybody be over analytical Iran. It comes to investing or understanding the data side of any business. So I think that’s a huge skill set because you’re an also Arsenal fan. It really ties it all together. So I detest, I want to say thank you very much for joining us today. It’s been a pleasure.

Jeffery: You’re a rock star and I’m glad that we got the opportunity to dive in and learn more about your background and all the great things that you’ve been working on and going to be working on and the way we like to end our show is we want to give you the last word. So anything that you can share to the startup community, to investors, I turn it over to you.

Jeffery: Please also share how they can get a hold of you. But again, thank you very much for being on the show and sharing all this great insight.

Aditya: And thank you for having me, Jeffrey. Kind of like closing lines. You know, it’s always hard and very tough to be an entrepreneur. I’ve never been in that in those shoes. Directly. Indirectly, yes. But never give up. And I think Canada is a great ecosystem, specifically if you’re building software and then the industrial ecosystem with the bread basket of the world, you know, we used to be in the top in the manufacturing space and still are doing a lot of manufacturing as well.

Aditya: And you know, just from an ecosystem perspective, now you’re able to scale companies out of Canada and still function globally. So don’t be afraid of setting up and your startup here in Canada and there’ll be funds like ours, our other ecosystem partners that are ready to support. And so looking forward to engaging with whoever you are soon and go from there.

Jeffery: I love it. Thank you very much again for all your time.

Aditya: And thanks for having a good day.

Jeffery: You as well, right? Berwick’s so I think some of the great things that Ed shared was, I think probably the best ones that really kind of encompass all of it is that when going in at a later stage in that series and above, when you’re getting to that position of scaling, is that putting boards together and being part of those boards are great at helping maneuver through problems, manage through concerns that may come up, utilizing all of the people on the board, utilizing all the people in his team and of course, other investment groups to come up with the best ways to get that information readily available for the founder and believe in the founder. The founder really is the driving force behind that business. And I think they really emphasize that as well. And then, of course, understanding the numbers and putting together the whole concept behind, you know, what really is going to drive home that business and make it successful and. When you’re investing in one company, you’re investing in all of their providers. So ensuring that when you are investing in these in the main primary company, that if you start scaling that business, that the other partners are able to scale at the same time, that is crucial information that you need to look into as from an investor standpoint. But even as a founder that when you start to scale your business, that you’ve got to have other businesses that are capable of scaling at the same time with you, especially when it gets into heavy product. But all great information and insights and the last one I’ll say is the act of saying no, which I think was a tough one for everybody. But being able to get that information of why you’re saying no. Back to the founder. I think is also just as crucial. They can learn a lot from that insight and that information. So fantastic feedback. And again, Ed, you know, thank you very much for joining us. If you have enjoyed this conversation, please feel free to share with your friends. Subscribe to our YouTube channel and or please follow us on Spotify. Google and or Apple. Feel free to share an audio or video clip around our show and we may include it in one of our future podcasts. You can also find us on social platforms, including LinkedIn and supporters Fund. Your support and comments are truly appreciated. Please visit us at Support, CENTCOM and or startup events that open people Networks. Thank you and have a fantastic day.