Archangel Funds; Investor, Golden Triangle Angel Network (GTAN)
Benton Leong | Archangel Funds; Investor, Golden Triangle Angel Network (GTAN)

"You can have a lot of great ideas in the world, but when the market and the customers aren't ready for that yet, then you're not quite at where you need to be."

- Benton Leong

Benton Leong on mistakes and wins of his first entrepreneurial venture.

Talk Takeaways

Benton Leong, a GTAN angel investor, sat down with Jeffery Potvin to share the mistakes and wins of his first entrepreneurial venture. As an investor, he shares that he is vertical agnostic and that he looks at the idea and the startup team when he makes his investment decisions. As someone who has a background on Computer Science, he shared valuable insights on why many tech companies fail. He stressed the importance on how your product launch should coincide with the readiness of your target market. The discussion also touched on the importance of co-founders, mentorship, and how a Canadian startup can grow to become a global company.

About

Benton is an angel investor in the Golden Triangle Angel Network (GTAN), located in Waterloo Region. GTAN has provided funding to over 80 early stage companies. Benton has held teaching and research positions in computer science at UC, Berkeley and the University of Waterloo. He co-founded four companies, including Radical Flow and Maplesoft.

Benton has been a mentor for social ventures. More generally, he helps companies with finding the right partners for business development. He also coaches on pitching successfully to investors. He has served as an advisor to OCE, the IAF, CCAA CAMP, and Shenzhen SCI. He is the pitch coach for Team Canada in the Shenzhen Innovation and Entrepreneurship International Competition, where in 2019 Canada beat seven other countries, including U.S., Japan, and Israel, to win both the overall gold prize and the overall silver prize.

Benton holds awards for teaching and for community development in the investment ecosystem. He is a board member for multiple ventures and a volunteer for non-profits.

He is lectures frequently at universities and associations around the world, speaking about effective use of technology in education; entrepreneurship; and startup ecosystems.

The full #OPNAskAnAngel talk

Jeffery:
But welcome thank you very much for joining us. I’m excited to chat with you. We’ve known each other probably I think at least five years now

Benton:
At least.

Jeffery:
And it’s been a pleasure to be able to learn from you work with you And it’s been just awesome all around. And today I get the honor to actually dive a little bit deeper into uh what makes bent in the awesome at what he does which is working with early stage startups. So to start our show off maybe the first thing we can do is if you can give us a little bit of a background on yourself kind of where you’ve come from little bit of a history kind of where you’re at and where you’re going.

And then one thing about you no one would know

Benton:
I have to think about that. Maybe I’ll get to that after I do it a little bit of intro. So uh I was raised in uh California. I grew up in san Francisco I went across the bay to U. C. Berkeley. And that’s where I did my undergraduate work both in mathematics and also computer science. And then did my graduate work at Penn State. And then the University of Arizona I was recruited to join the University of Waterloo’s computer science department and enjoying that faculty. While I was there I worked in on a research project along with several other academic collaborators on a system for doing mathematics. Uh, symbolic mathematics by computer. And it was uh one of the first systems that actually did something like that.

And it was available commercially. We saw ourselves initially as academic researchers. We didn’t think that we would be the accidental entrepreneurs that we turned out to be. But so many people found out about the project and then I asked for copies of it and we charged a little bit of a handling fee for that. They saw themselves as being customers. So we ended up starting a business, although at that time, in, in, in the 19 eighties, we had no intention of doing that.

And uh, it’s, it’s actually a little bit surprising to me that the company succeeded because with six academics running a commercial company, we didn’t even know what we didn’t know – right? It amazes me that we survived. It wasn’t until we hired Ron Newman as our first CEO, that the company really took off. And so all along the way, I learned things that are deeply embedded in me now, deeply ingrained in me. And these are the lessons that I tell young founders who may not see out two or three years about the possible problems that they may have from making the wrong mistakes right at the beginning. You know, I was there, it happened to me, I’ve got the scars on my back to prove it. And so, you know, as an angel investor now, uh, people may think that the value that I bring to the table, it’s a small amount of capital that I can provide for them, but actually it’s, it’s more than many decades of experience that I’ve accumulated over the years. So with that company Maplesoft it was acquired by our japanese distributor cyber net in 2000 and nine. And that was when we founders had what I call our or happy and stay right, that, that, that large big acquisition that everybody hopes for and with that capital windfall that I was lucky enough to have, I’m really turning that capital Integrion Capital, I’m recycling it right? I’m redeploying it with the next generation of entrepreneurs uh, and, and I’m there to help them as well as supply capital. And so since, since 2009, I’ve been a very active angel investor. I’m now in multiple angel groups. And uh, just recently, just this past year, uh, some of my colleagues and I have started a new angel fund, to basically be additive to what individual angel investors are are supplying to new ventures.

Jeffery:
Awesome. And the one thing about you that nobody knows

Benton:
That nobody knows Well, few people. No, no. Uh, no, that, that there are things that I’ve done in my life that, that were very risky. I do take risks. And that’s, that’s reflected in the kinds of investments that I make. I used to go skydiving

Jeffery:
No way that’s awesome.

Benton:
And JP, I stopped when I had kids, right? And I thought, well, maybe after they’ve grown up, I might resume it, but so far I haven’t

Jeffery:
well, it’s a fantastic sport. I’ve also jumped, I never went into it as a sport, but meaning something I did regularly, but I found it very invigorating. I really did enjoy it, especially the jump part. I was really a huge fan of the floating part just because it felt like the world’s biggest snuggie that lasted for at least 20 minutes while you were coasting down.

But outside that the landing was a lot of fun and jumping was even more fun than that.

Benton:
It is such a rush. But you know, I also enjoyed, you know, floating down. It’s so peaceful, you’re up there. It takes quite a bit of time actually to come down while the shoot is open and you’ve got time to reflect on things. Just you’re on top of the world. Just looking around.

Jeffery:
Agreed. The view is amazing too. I love climbing mountains. So being at the very top by yourself, it’s not very many people at top, you’re just looking around, sun’s coming up beautiful. Same thing when you’re jumping off the plane, just floating around, looking around, just being like, oh my God, this world’s beautiful.

Benton:
Yes

Jeffery:
That’s incredible. Uh well there’s some really amazing things, well you’ve done a lot of amazing things, but there’s a lot of amazing nuggets that you kind of talked about in your experience that I want to kind of go back and talk on because I think that really the real core to what makes you who you are, are those earlier experiences and then being able to give those back makes such a huge difference.

And you did talk on those and maybe we could dive into a couple of those things and sometimes they’re the failures that you got hit with or sometime they’re the winds. But what were the, I guess, what’s the meat and potatoes that you really took from building something unexpectedly as you mentioned. But when you started to really dive into this, what got you rolling? Was it the people that were calling looking for this solution and you felt like, wow, I had no idea we had something here or was it the drive to go out and continue to build it? What really got you interested in this whole learning as an entrepreneur?

Benton:
Well, I see myself as a builder. Uh, and, and so I, yeah, I enjoy, to a degree helping other people build their companies. But I also enjoy getting my own hands dirty and building my own, my own projects, uh, my own tools. And so I do remember the rush during the early days when all of us were engaged in that and we were very happy to basically keep on improving the product or, or the system, Although these days I do caution inventors not to just keep on doing that without talking to customers a lot and understanding where the customers need you to take it right.

And I’ve seen uh, companies fail just simply because the engineers couldn’t stop tinkering and improving the product before getting it out into the market. Right? So probably the best validation that what you’re doing is have early customers buy, test it, give you more feedback, and have more customers buy it.

Jeffery:
That’s fantastic advice. And I’m kind of built the statistic in my head that 95% of people that start companies are builders and there’s only 5% that really understand how to sell. So you really have to start to shift that building mentality up so that you’re more of a salesperson because building, you can’t stop your like build the best car in the world and you’re like wait what’s going to drive this if I don’t sell it?

Benton:
Yeah. And you get hit whether those reality when you actually have to stand out there and try to sell something.

Mark Castel, who I uh uh consider as one of my mentors uh used to tell people at communitech. I don’t care if you’re the CEO, I don’t care if you are the uh CMO. I don’t care what your title is. I want all of you that I’m helping stand out there in the corner in downtown Kitchener, one block away from Communitech. And I want you to sell the passerbys something and I want you to understand how hard it is.

Jeffery:
Yep, brilliant lesson. You should. Everybody should all the way from the person that answered that telephone to the person that answered an email all the way up to. Everybody should be learning how to sell because you should be proud and excited about the company you’re part of. And that’s the first line is I work for this company and I should know exactly what we do. And that’s your first cell

Benton:
Right? And what this product is and and and and never mind talking about all. It’s wonderful features basically. How is it going to change that customer’s life? What are the benefits? Right? And you know, a person who does that so well is, uh, the late steve jobs, right? I consider him to be one of the consummate business communicators when he got onto that stage. You know, by the time that he walked off, whatever it was that he was talking about, you wanted it, you didn’t realize that you needed it, but you want it. And he does that not by extolling all the versions of Bluetooth or, or 80211 that are embedded inside.

He talks about how it’s going to change your life, how it’s going to make it easier, or how you’ll be able to communicate better, or how you’ll be able to find information faster or entertain yourself right? And, and, and, and he didn’t pay a lot of attention to all the engineering details.

Jeffery:
You made it applicable to the user and figured out what the user wanted before they actually felt they needed it.

And I think that makes a big difference in your product planning, but also in your sales side of things, is that if you can stay ahead of the consumer and knowing where the consumer is going to go and being able to adopt that beforehand, you can carry that life, uh, product life cycle all the way along, can keep feeding the engines so you’ll keep growing and be relevant along the way.

Benton:
right, and to be able to explain it so that people can understand. And in one test that I or one challenge that I give to founders is I want you to come back with your grandmother saying I want this,

Jeffery:
Yep, that’s awesome. And when you were going through this journey of building this company and you had that original team and the co-founders and everybody putting this together, did you find that your growth and the opportunity of growing, growing and scaling was because you had co founders? Did it make a difference in your journey? And when you look at companies today, are you looking for companies that have co founders? Or are you saying you know what single founders are awesome? But I really do need this other element to make this a success.

Benton:
You absolutely do. And yes, we had a fairly large team of co-founders. There were seven of us uh originally, and when I take a look at at uh new companies that are being incubated today, I am looking for that almost complete team. Right of people who have an artistic, people who can communicate well, people who understand marketing and how to get the market as well as the engineers and the scientists and the inventors and the people who code right?

And and and it may not be that complete team yet. And if they want our help, uh using our networks in the ecosystem to help them find, you know, that that that that right marketing person for this stage of the company, we can do that.

Uh, and sometimes they may not realize it, but, but they may need, uh, some executive brainpower, some experience help that, that they don’t have one a team, maybe that’s also a part of the missing, uh, compliment to, to the team and we can help there. But it’s very rare that we would invest in a single person. And I’ve worked as a mentor with single founders and they agree with me that, you know, Benton, you’re right. I do need someone else to balance what I do. And I said, okay, let me introduce a few people to you that I think can help you. And if the first candidate doesn’t work out well, you know, maybe the chemistry wasn’t right. And then you bring another one on, well, for different reasons, she didn’t work out. She wasn’t the right one. He wasn’t either. Right. And after three or four accounts you come to realize it’s really this, this founder can’t work well with other people or i’s too greedy is unwilling to give up equity in his or her company to share with others. And when you have a person that is so controlling or so sense self centered, I don’t think that that person can, can really lead a good strong team.

Jeffery:
No, that sounds, uh, very valuable. And I think as you start to grow with people and like you said, you can bring co founders in throughout that idea and through that ideation and growth process and find people that really do gel and your team is going to mold around you as well.

So you’re gonna start to find like-minded people and start building that culture. And when you were in the, in your company doing this, and you were building forward, was there a point in time where you guys hit a wall? And you kind of started, you know what, we need to shake things up. We need to do things a little bit differently today.

You know what? We’ve been doing this for five years, 10 years, whatever that time was. And did you find you having to make changes in the way you looked at your business?

Benton:
Yeah, I would say, uh, Jeffrey that we probably weren’t the the model model founder teams, uh, for other people to aspire to becoming. You know, uh, all of the team members came from academia from the university, we were research scientists, mathematicians, uh, and very good at it, right?

But there weren’t enough of us that were able to cross in my mind our chasm from the university into the business world. And those people are very valuable if you can find them. The ones that understand the engineering, the deep engineering, the deep science and at the same time would be able to lead a company and, and, and, and, and speak to business people instead of looking down at them, which is often a trade amongst academics. So but you know, people who can straddle those two sides, they’re very valuable. And those are the people that I looked to lead companies. Were we the ones who had done that? No. Uh, we were very weak on that, in our founder team. We had to go outside to find someone who was very good Ron Newman who was our first real Ceo to lead the company.

And uh, we learned from him, I learned all about contracts and, and OEM licensing from, from people like Ron and, and the lawyers that we had

Jeffery:
And that really ties into it. And I love where you’ve gone with that because a lot of that founder side or team side, it really does. You have to look at those weaknesses and your strengths and kind of figure out where that balance is. And I know a lot of the interviews and a lot of the things that you’ve done in the past, which I’ve learned from, which I think are awesome.

Um, was that you talk about mentoring and you talk about how mentoring can really benefit you. And I know you do a lot of this now in the last 10, 12 years of being an investor. How did you, did you utilize that when you’re building your company? Was it again something that you may have had and maybe no one else did, But because you had a different look on your business, you started to utilize that early. You obviously learn from the first Ceo, but was there other things that you did to kind of keep those tools sharp?

Benton:
Uh, you know, during the early, you have to remember that during the time that, that we were getting our company launch, It was in the 1980s, there were a lot of other people to learn from.

I can’t say that we looked around for best practices and adopted them. In fact, there were no angel investors. Uh, during that time, no VCS uh, we all took out second mortgages on our homes in order to be the seed capital for the company. I showed my wife the bench in Waterloo Park and I told her that, you know, if this company goes under, the bank will repossess our house and this is the bench that will be sleeping underneath and you should be okay with that. That’s the the risk capital. I mean, uh we didn’t have very much in the way of safety nets, we didn’t rely on propping up our company with other people’s money. We didn’t have people to really sort of guide and mentor us.

Jeffery:
But there’s a lot of learning from that, right?

And I think you can really utilize that part of it and like you utilize the mentoring side. You may not have had it, but you created your own principles, you created your own guidelines and that’s what allowed you to continue to move and morph throughout time and now you, 12 years later you’re looking at this going on, Hey man, I can bring all of this into helping early-stage companies really figured out because we went through the hardest part of it.

And now there’s so many different avenues tools, businesses, non for profit,

Benton:
so many organizations incubators. Exactly. Uh, but the business people that I really admire are those who have gone through a lot of challenges and somehow those challenges didn’t defeat them. They managed to come through and learned along the way. And, and so I’ll have to say that things haven’t been easy and I’ve made lots of mistakes and I’ve struggled, but in the end, I managed to emerged. But I learned from it and I see this with other people who are, who are in business

Jeffery:
Agreed. There was, I was having this conversation yesterday through this kind of angle to it. And when you’re looking at this co-founder side, you know that I’m going to say that there’s probably this 60% 70% of um, founders that go into more of the technical space. They may not have that same business acumen, um, and understanding, um, so they’ll look for that person that does carry that sales or more front-facing style of leadership, and then you have a business person that comes into this market, they’re looking for this co-founder because they don’t understand really how that co-founder start, technical side works.

And what I loved about the business person finding this co-founder is that I find that these two, uh, entities coming together really makes for a real strong business and when it’s a business leader running it with a technical co-founder, and the reason why I find that this being a good mix is that you have a really strong person going out and selling.

But what I find for myself, being a technical person, software engineer, etcetera, is that I could look at a business from the ground up and I can see how everything moves operates and functions. Where as a business person is always looking down into the business, trying to figure out how these things work. But in speed and time it doesn’t work as effective. So they really do depend on that technical person and technical people tend to be more open to just share things right away. They’re like, I don’t want to do this extra work, so I’m just gonna tell you how it is. So do you find that that same kind of scenario works in today’s environment that it really does make a difference to have somebody really hyper focused on the technical side of your business? Because everything is kind of going that way.

Benton:
Absolutely. Because, you know, the companies that I do focus on, the companies that I gravitate towards are based on technology and based on a generally deep technology which other people can’t copy easily. Right? And the businesses that I look to our are those who understand how to exploit technology for that definitive advantage that they have over others, or that use technology as a way of really sort of getting into the market faster that understand how to take advantage of it.

Those are the people that are the winners. But you know, that that that relationship from the technical people on the team and the business people on the team, you know, whether they’re looking up or down, there’s gonna be respect amongst them, right? And, and all too many times I’ve been involved in companies or mentored companies where uh, the business people didn’t have much respect for the, uh, for the engineers. And we’re always blaming them for holding things up. And the engineers were coming back saying this business person has no sense of how hard it is for us to build this. He has no respect for what we’re doing. He’s just simply writing on coattails of our success, our invention, Right? The guy’s a parasite. So unless you have that mutual respect, I don’t think that that company is going to do very well.

You’re always going to be at loggerheads with each other and you have to understand that there are things that you don’t understand and you’ll have to trust the judgment of others. If you can find that amongst a team of three or four co-founders and they work well together, You know, that that’s going to make for a very successful company

Jeffery:
Agreed. And there’s a lot of compatibility that has to go in there. It takes time to build that relationship, understand each other’s strengths and weaknesses to move forward.

So when you, when you got into moving yourself and shifting and selling your business, um, could you maybe talk to a little bit of what the learnings were from that? Because I think today it’s pretty relevant, there’s a lot more commerce happening. More transactions are happening, companies are trying to sell or at least grow quickly. So when you guys got to that stage, what did it look like? Was it a 1 to 2 year process? Was it an M&A takeover where you had an outside entity come in and look at the business and you guys have to spend time shaping it to get it ready. How did that process go? And what kind of learning did you take from that?

Benton:
So, uh, I wasn’t with the company anymore by the time that it was acquired and it was acquired by a friendly party, uh, Cybernet, our Japanese distributor.

Uh, it was uh, Cybernet understood our business inside and out because of the fact that they were the dominant Asian distributor for our product and what they saw was that whereas we’ve all come from an academic background and sold into the education space and to the university as well. We weren’t penetrating the commercial market as well as some of the other companies in the same space. And they said we know that our customers in the aeronautics space and an automotive, automotive would really be able to make use of this and we know how to south of them and we know how to push you into the right direction.

So we’re going to make an offer to buy this company for you and we’re gonna take it in. We’re gonna basically let you handle academic sales or keep to your core strength. But what we want to do is to hire additional people to really take it into those application areas where in fact there is a lot more revenue to be made in the commercial space than the education space.

Jeffery:
I like it. And was there while you guys were I know this was after your time, but when you guys started, did you look at that as an acquisition? Did you look at partners as being your acquisition? Was that something that you put in your four? Uh your rear view mirror didn’t care just hustle forward or was it something you were planning for?

Benton:
Because I was with the company until about 1999 or 2000. We didn’t have an exit plan. Nobody even discussed, you know, how do we exit from this? You’ve got to remember, you’re talking to some of the original founders, the people who built the business, this is their baby. I don’t think that some of us ever thought that we would be leaving our baby or walking away from it. So, uh, certainly with that group, there was not a lot of thought that that went into, how do we sell the business or do we go into an IPO.

But uh, the Ceo who had taken over, uh, you know, during the 2000s, uh, certainly did restructured the business a bit. Clean it up. And, and uh, and then, and then the japanese distributor came along and said, you know, we really like this and we want to make a we want to purchase it.

Benton:
Oh that’s awesome, so in that time where you kind of shifted and I think you are one of the original G 10 members so that 12 years back.

So in a kind of small gap you went through a couple other businesses bought and sold throughout that time, is there a couple of things that you can share to the audience that you learn from as being an entrepreneur and and going through that buying and selling process that could really kind of emphasize, you know, while you’re starting a company and where you’re gonna end up always remember these kind of few points, whatever that might be uh focus on the end goal where you’re trying to get to uh look for that exit at the beginning, so figure out who that company is that you want to get bought by and shape your business to kind of fit in that mould, like there’s certain things that you would kind of really allude to that would help us start up better understand where they got to put their vision

Benton:
Right, You know, So, so in that, in that interim period between the time that I had left Maple Soft and then and then became doing angel investing full time. I started a few businesses, but they group, they only grew to a certain degree and then they didn’t sort of become as successful as as MapleSoft did.

Uh And and I do think back about those years, and I wonder, you know, was I too hard on my co-founders, Were they too hard on me? We had some success to a degree. We work with publishers as partners, but things didn’t quite gel and and and really work out to become, you know, large successes.

Jeffery:
So, can you figure out are there certain things like being hard or being not hard? Is there certain things that really kind of morphed your direction that you were going in?

Is it um, that you could do things differently or that if you were to start something today, here’s three things you would do, no matter what, because they really made a difference in your propelling yourself forward because you’re mentoring every day now, right? And you’re so much valuable advice to people. So, and they grow their companies and you’ve got an amazing portfolio. So, what are those types of things that you can look out foreign investors can look out for?

Benton:
Right. So, so, you know, in terms of, uh, inventions and ideas, uh, you have to you have to bring them to the market, you have to develop them and bring them to market at just the right time, right?

If you’re too late right, then you’re just following everybody else and you’re struggling to catch up if you’re too early. And I would say that we were probably too early in terms of creating interactive books that were on electronic readers uh that that that were educational books or textbooks, we were probably too early during the early 2000s

So, so so there is that too right. You can have a lot of greatest ideas in the world, but when the market and the customers aren’t ready for that yet, then you’re not quite at where you need to be right at the front of the wave, the wave hasn’t hasn’t even started traveling in that direction yet. You see it, you see it in the future, but for you to spend a lot of time in an effort creating those products when there isn’t a need to buy them yet, then you’re too early.

So you don’t want to be too early. You don’t want to be too late. The timing has to be just right for you to be just right at the front of the wave.

Jeffery:
So I guess if you take that um experience and the uh what you’ve just shared and you tie that into the current market of NFTs and how they’re taking off like crazy right now, would you look at that as at the peak of the market or so early that you know what start ups should be jumping in this if you’ve got an idea just hustle it out now because you’re right at the peak of this market break.

Benton:
Right? So uh I don’t know if I would be the best person to judge that. Uh Jeffrey. I would say that right now with NFTs. You know you’re you’re right, you’re in front of the waves, are you one or two years ahead of it or are you just one or two quarters ahead of it and therefore you’re going to do really well. I would be the wrong person to answer that. I haven’t really sort of lived it enough to be able to give you a good sense from from deep within me.

Jeffery:
Fair enough. And you know that the the this whole NFT market’s been around for like 3 – 4 years.

It just couldn’t get the traction at the same thing with your the audio books that you created way before that anybody was used to listening to audio and then Covid kind of helped propel this. But Bitcoin and Blockchain actually helped propel it even more because all of a sudden Blockchain, sorry, Bitcoin became such a popular way to make fast coin and dollars that everybody needs to spend it on something.

So then these digital assets became this hidden gem of value and everybody started to kind of feed the engine. So it kind of feels like it’s right at the cusp of this breakout going crazy, we’re hearing about it a lot. And of course, who are the people that started it or big money providers into this is the same people that fought Facebook and the same people that own all the Bitcoin, right.

Nicholas Brothers, I’m saying their name wrong, but all right.

Benton:
You know, it’s been around a long time and it’s really started to take off now. But let me ask you this, uh, Jeffrey, are people putting money into Bitcoin or Cryptocurrency more for the utility or more for the speculation?

Jeffery:
Personally, I’m going to say speculation. I don’t think it has any value at this point in time that anybody has been able to figure out how to utilize it.

It is pure speculation and it’s, I think the, uh, what’s that guy’s name on? MSNBC, I think, um, the dog pound or the dog, whatever the investors name is, he just bought a house and said that he paid or paid off his house using Bitcoin because that was the usage of it. And he’s like, I might be the first one to sell, but I think it’s at its peak. So that’s kind of an interesting concept, right, throwing that out there and everybody else just keeps pushing it forward, right?

Benton:
Well, you know, people see the crazy uh increase in value of, of things like Bitcoin or ethereum and and I think it’s the fear of missing out. I better jumping out because it’s still going up, still going up right. Uh but how many people, you know, do you personally know personally know who have actually taken advantage of the Bitcoins that they have and used it for something?

Jeffery:
I don’t know anybody that’s used it for anything. Uh Was time with this yesterday? It’s like it’s in a wallet. I don’t even care to look at it right, what am I gonna do with it tomorrow? It’ll be worth 10 times more, it’ll be worth 10 times less. So it’s just sitting there I guess so

Benton:
and you know my worry is that I’m a forgetful person Jeffrey, so I’m afraid of losing all the value of my wallet just simply because I’ve forgotten the, you know the key password or whatever.

Jeffery:
Yeah forgot to log in and use it. Yeah, it is uh, it is a fascinating space and there is a lot more, fomo going on these days than there ever has been. And I’m not sure if again, because we have bigger, better vehicles to market the world, but it seems to be really changing the way people are reactionary and I’m a huge herd mentality player and what we do.

So I do believe that that does lead a lot of it and hopefully it goes down the right path and not the wrong path, like that’s as, that’s as best as we can play that one.

Benton:
But you know, outside of Cryptocurrency, there’s just so much that’s going on that that is so revolutionary in the area of Fintech and today I looked at at uh one or two companies in the ensure tech space. There’s a lot of innovation that’s going on there. That’s really changing things. And uh, I think that also related to that is the big revolution in terms of taking advantage of unused capital assets, right? That, that we see with Uber and that we see with Airbnb and, and so people are using those models to say, what are the unused capital assets? Are are we not really taking advantage of? And how do we capitalize on them?

Jeffery:
So do you think that with the startup changes that are occurring right now with Covid and everybody’s sitting around having more time to think and come up with better innovations and better ideas? Do you think that it’s getting into a bubble state like we had in 2000 and seven with the financial or 2000 and one with the original uh dot com blow up? Do you think that they’re getting into that state? Because everybody is finding a way to monetize every single thing, every aspect of your life, everything around you.

Do you think that that’s bringing, because that’s going to hit head on somewhere? Or do you think it’s just going to keep going that there’s now there’s just too much awakened around money and everybody wants it, whereas before it was okay to have a job, it was okay to be an entrepreneur, but not really. And today, now it’s be an entrepreneur come up with some innovative annd win. So how do you feel that’s all rotating?

Benton:
Well, you know, as you said, Covid the pandemic has given some people, some, some time to sort of stay home and think about things and, and think about what they’d like to do that others may not have thought of yet. I think that once we emerged from the pandemic and can circulate freely again, some percentage of those of those ideas and of those ventures will fall by the wayside because they really haven’t been tested during the pandemic. Right? Yeah. There’s not been a lot of uh chances for many people to randomly run into other people and ask them. What do you think about this? Can you help validate this idea for people to go to uh sets of customers and and and test this out? I think that that will be done once we start circulating and we’ll find out, you know, some of those ideas weren’t as good as the inventor thought they were.

Some will succeed. No doubt.

Jeffery:
There’s a lot of I guess hopefully a lot of practicality that will come out over the next year or two as things start to settle down a bit.

Benton:
Yeah, But, but you know, in, in, in, in a certain way, I think that we won’t go back to the world that we left. Uh, we’ve gotten used to new ways of working. So it’s certainly going to have a huge impact, is already having huge impact in terms of commercial real estate. In terms of the office situation, I can’t say that we will never work in the central office and I can’t say that we will always school. We will go back to that model where everybody came into an office 9 to 5. It’s going to be somewhere in between, right? But exactly where it is, uh, where that need allies sort of on the meter in between, I don’t know.

Uh, but what it has allowed is what is promoted is the idea that you can find people to work with and not be in the same city as they are in, or not be in the same office as they are in. And I think that we will continue to enjoy that mixed into our normal way of working with people that we see on the face to face basis.

Jeffery:
So the touch on that again, and we’re kind of diverting a bit from the whole concept of start-ups and entrepreneurship, but just more from a curiosity standpoint with us diversing of being able to work with people around the world. Are you finding that this has elevated the game in education, this has elevated the game and being able to find more talented people to bring in, which will actually allow for innovation to move even faster.

Benton:
Absolutely. So, uh you know that that for startups, uh that can’t afford uh top-level executives that the c suite that there have been sort of uh services that offer fractional executives a fraction of CFOs have been around for a while.

Many many companies are used to using them, but I know a company that’s actually offering a fractional CTO service and and and they bring in uh people who have led fairly large companies in terms of their technical development. And these are executives who are now looking at their second careers, and they’ve joined companies where they can offer a portion of their time to startups, maybe a day a week.

And they may not be even in the same city as the company is in. So, I think that that that notion of fractionalizing executives, combined with the fact that it’s now easier to work with people from afar, is leading to basically uh, more success in terms of adding people to your team who may not be in the same city that you’re in.

Jeffery:
I love that. And what came into my mind, right when you were sharing that was that when I started my first company have close to 15 years ago, I remember sitting in, uh, it was actually a brewpub and one of the investors said to me, you need to get an office.

And I was like, what do I need an office for? Well, because when you get purchased, they’re gonna need to have all of you in a room. They’re gonna need all that brainpower. They need to know where it is. They need to be able to write it down and see everybody that’s sitting there and register this whole thing and I still couldn’t get my head around it.

I’m like, one, I don’t want to be in an office, but I really don’t understand why this has to be in one spot and which is fascinating because I never got an office 15 years later, we had offices in other countries because we’re in Pakistan Philippines, but we never eventually, we got rid of those offices so it was distributed everywhere. But now you’re, we’ve gone through this whole cycle and now we’re actually in an environment where your whole team is distributed and now you’re looking at it going, I need to go in and buy a company A okay, where is everybody? Well, we’re in 14 countries. We don’t own one office and everybody lives and works from home. So you’re, I wonder and I’m curious on how you see this ruling out for when that purchases because yes, you’ve got inventory yes. Or tying into all of these other entities that are doing things. But if the whole thing is distributed, is there a lack of control in the mindset of the purchaser that they don’t have the brains and everything in one room? Or do they feel more comfortable that it’s so distributed?

Benton:
It’s gonna be harder to assess that very widely distributed team because one of the things that we say amongst angel investors is if you’re going to invest in the company, you know, at the very least you need to make a site visit and get an understanding what the vibe of the places are. People working hard or you know, are they all disappearing at five o’clock? They have that kind of mentality or are they sleeping underneath the desks at 3 o’clock in the morning? You know, how hard do they work? What’s the vibe? How do they work with one another? Do you sense that there is antagonism and in, in in the office? Right. So we we walk around and and and and we talked to people. But how do you do that when everybody spread so far apart? It becomes harder to arrange for these, you know, one on ones with maybe the top 10 or 15 people uh, in the company. But companies were just by the time that a larger corporation buys a company, I would hope that in fact it does have multiple offices throughout the world.

We are not growing purely Canadian companies that serve purely the Canadian uh market, right? But it really behooves us to, to find much larger markets than the Canadian market to become export companies to have offices in Asia and in Europe, right, at MapleSoft, did you know? We had, we had not only distributors all over the world and, and, and I think 30 different distributors throughout the world, but we also had a European office and, and, and an Asian office. So when, when a larger corporation comes in to evaluate your company, I would hope that you’ve got multiple offices.

Jeffery:
What do you think that the company is defined by their office or their defined by their people or are they defined by the asset that they hopefully own in these other areas? Because that brings a bigger value to the company? Um, it’s an asset by plus it’s a resource by, but if you don’t have those things, does that bring the valuation down?

Because if you’re just a platform and hey, you’ve got a virtual office and all these other countries, does that still bring you the same value and take on your company? I’m going to kind of guess. It just falls down to the numbers, so none of that will really matter anymore.

Benton:
Well I think that is the nature of the business that will determine the right answer there. I don’t think that there’s any single right answer. If you are in manufacturing, you know, you’re certainly going to have capital assets and equipment and hopefully you have them in the right places in the world when you’re creating, you know, intangible IP like software is where does it really reside other than in the heads of people and in the cloud?vRight. So for that it may not matter as much

Jeffery:
For sure, awesome. Well I love where we were going with that. I think we I was fascinating and I think there’s a lot to learn and peel back on that when you’re growing your company, who knows where you end up, But when you’re decentralizing your workforce and building into other countries, outside of the numbers running in and out and paying taxes in each of those countries. I mean, that’s all you need to grow a company and make it look different and, and uh, coming from our end, that’s what we’ve done. And I think it’s uh, I’m not sure what it looks like in five years or when there is an exit, but I won’t even bother looking at that right now.

But I can understand that this would probably be a complicated story for some individuals looking to sell today.

Benton:
But you know, it gives you more flexibility, right? Uh, in terms of growing this kind of organization and uh, yeah,

Jeffery:
I think the brainpower helps too0, I do think that there’s so many skill sets that we don’t have as Canadians that we can pull around the world and I think that’s the most valuable part of being decentralized.

Benton:
Absolutely. Well, if I find the talent wherever they are

Jeffery:
Agreed, well, one of the, we’re gonna kind of shift a little bit here, we’re gonna go into our rapid fire questions in just a second. I got one last question for you because I know you’re going to have a rock star uh, use case or story for us, which is probably best. But one of the things that we always like to ask and learn a bit more about is that in this investment journey that you’ve gone through, you’ve probably talked with thousands of companies and you’ve got to learn a lot about them. Is there a question that really stands out to you that just pops your mind right away? That is about just a fantastic story that just blew your mind about what it takes to be an entrepreneur and what a company or what someone had to do just to win and that you couldn’t be more proud of this story.

Benton:
Yeah. So I was an early investor in the company fix, which got its start under the name of maintenance assistance. It was started by Marcus Tell who, who I mentioned earlier. Mark had been uh, a, uh, a mentor at community. He had been an investment director at OCE, he had been an angel investor with GTAN and incredibly, he actually held all these titles at the same time.

So he was he was a renaissance man that could do everything and anything and do it all at the same time when he started his company, I think that the angels that we added to his board, you know, they’re tough job was to get Mark to focus on just simply the one company to drop his associations with all the other things that he loved to do and the focus. And to his credit, he did. And he managed to really sort of grow the company in a phenomenal way. And just last year, we celebrated the, uh, the exit from, from that company when it got sold to an American company, the returns to the investors were 20 X 30 x 40 x 50 x, depending on when you got in, it was a successful victory for everybody. And the company is still in, uh, Toronto with, with the same people. Uh, nobody’s been let go and, and in fact, they’ve got more resources to grow even bigger and faster.

So I think that it’s a, a two success story for Canada. Uh, so, so when you have someone who is, who is uh, so bright and has such enthusiasm for so many things, then it becomes the job of the people who work around with him or who support him to try to get that person to sort of focus on at least this one thing for the next, let’s say 3 to 5 years.

Jeffery:
I love it. No, that’s a great story. Great story. All right, now we’re gonna jump into rapid fire questions.

Benton:
Yes, sir.

Jeffery:
All right. Why do you invest in early stage companies?

Benton:
Because this gives me the chance to influence the company. Uh, one the most at a time when I think that they needed the most.

Jeffery:
How did you get started with early stage companies?

Benton:
Through exposure to companies that places like Community Cap or the accelerator center in, in Waterloo, and now, you know, to quite a few places, uh, the health innovation hub in Toronto, uh, the, the hatchery at UFT. So I find early-stage companies everywhere. And I just love working with them.

Jeffery:
And what was the, what triggered you to, to look at this asset class versus retiring or going somewhere and starting another company? What got you? Like what? Turn the switch and you’re like, I love this.

Benton:
Well, I think I think that I can have the biggest impact by helping multiple companies rather than focusing all my energy on a single company, awesome.

Jeffery:
What is your favorite part of investing? I

Benton:
t’s when the founder realizes something that he or she didn’t know before and under understands the importance and the impact of that when that light comes on and then, and then we’re talking the same thing. So we’re using the same language, We’re talking about the same concepts. Sometimes it takes a little while to get there before you have that meeting of the minds.

But when that happens that’s a that’s a magical moment.

Jeffery:
The ah-ha moment.

Benton:
Yes

Jeffery:
I love it. How many companies do invest in per year?

Benton:
When I was doing it uh by myself within an angel group, I’d say probably about 3 to 4 companies a year. Uh Now that I’m a GP in a fund, we’re looking to invest in about 10 companies a year. Awesome.

Jeffery:
I love it. Any verticals you want to focus on or you like to focus on.

Benton:
My background is in educational technology because of the fact tthat I used to teach in a university. Uh but I like many sectors. So I would say I’m fairly agnostic. It’s more the idea and its chance to be transformative, that captures my imagination rather than oh it’s got to be an egg or it’s got to be in Fintech. I’ve invested all over.

Jeffery:
Well I’ve sat in the room with you many times on picking and talking to companies that I can say that one skill that more people need to get into or learn is how to ask more questions and Benton you always ask a lot of great questions, which I think helps that entrepreneur open their mind up to understanding what they really have or what they’re really working on.

Benton:
Thank you.

Jeffery:
On the due diligence side are the things that you look for that make a big difference.

Benton:
Well many people say and and so I I will just simply uh say it once again, it is the team, right? Uh You can have the best idea uh in the world, but unless you’ve got a team to execute, well, it’s not gonna go anywhere.

And uh, as you know, grew up in the USvwherevthere are so many people who do such a great job in marketing and promotion there compared to people in Canada and my friends and I on both sides of the border will always says A give me A level marketing with a B level product rather than the A level product with B level marketing.

Jeffery:
I love it. I love it. A team with a B product. You can do a million things with it. Yes. Um, is there a timeline for investments? One week, two months from the first call?

Benton:
I would say, uh, you need to give yourself enough time to really sort of dig in and understand the business. And sometimes the founders are reluctant to tell you things that they’re afraid may drive you away. I would rather than the founders be completely open so that I have a chance of understanding what the weaknesses are. Not that it might deter me, but that it might be able to give me a chance to say, how can I help this company? So that conversation, usually it takes a few weeks to kind of unfold. The fastest that I’ve actually decided to invest in the company is, is about one week. The longest generally is about 30 to 60 days. And I would say for angel investors set as a target, the fact that you would close within 60 days.

Jeffery:
I like it. It’s a good number. I’d say 30 if it was easier to rope everybody in, but 60 is a good start. Do you, is there outside of the team. Are there any other factors that you look for that make you cross the line? Is that the innovation is that the CEO is there paperwork, anything like that?

Benton:
I would say it’s the innovation that can be protected somehow. Whether it’s it’s having really really strong alliances with industry leaders as one defensive barrier or it’s through I. P. Protection through patents as a different type of uh defensive moat.

So there’s gotta be something it can be something that’s easy to copy. Right? And sometimes what I will do is I’ll ask the founders, how long did it take for you to come up with this and bring it to this level of fruition? And then they tell you, oh it took us three months working in joe’s basement. Right. And and and how much money did you expend doing that? About $300. I was like, oh my God, anybody can do this?

Jeffery:
That’s a good question. I like that. Any preferred terms that you like, prefs shares common?

Benton:
Generally commons. Because it puts me on the same footing as the founders.

I like a balance of something that’s investor friendly. And, and, and uh, founder friendly. I generally don’t like safe because there is so one-sided.

Jeffery:
Amen. Uh, do you take, do you lead rounds? And do you take board seats?

Benton:
Yes. And yes. So, uh, I think instead of leading rounds all the time for deals that I’ve been in, I’ve done it enough. What I really need to do is to help build, uh, the number of people who are good deal leads, right? So I might even go into a deal where I don’t intend to invest, but I would like to sort of lead if someone would, what would, uh, be my partner in in in doing the deal and then learn to lead himself or herself.

Jeffery:
I like it. That’s good. Educate everybody brings the whole, brings everybody up. Okay, last question. Do you do follow on investments?

Benton:
Uh, I have, uh, I generally try to spread my capital into a larger portfolio, so it is more diversified. But in the case that the companies that I’ve invested in actually need that small bridge in order to extend the runway so that they can get to the series a or beyond. I have considered follow on investment.

Jeffery:
Okay, perfect. Okay. We’re gonna jump into the personal side. So a couple of personal questions and then, uh, yeah, we’re good to go. So first personal question. Sure. What’s your favorite sports team?

Benton:
I don’t have one. I don’t follow sports much. So I’m trying to think of the last time that I’ve actually watched either a live game or a televised game.

It’s been years, Jeffrey.

Jeffery:
That’s okay, well I find it away if it’s a way of bonding, a lot of people have a team, they don’t have a team or they remember having a team when they were a kid, so it just kind of brings out the conversation. But that’s good.

Benton:
I followed the San Francisco giants when I was growing up in san Francisco. That was a long time ago. Well they were at the Niners.

Jeffery:
Yeah, they’re a good team, yep, that’s awesome. Okay, question number two, what is your favorite movie? And what star and what character would you play in the movie?

Benton:
That’s a tough one. All the movies that I’ve seen and I’m trying to think of the most impactful movie, I’m drawing a blank here, Jeffrey. So here’s another question I guess I’ll have to pass because I can’t think of one right now. I love the old Hitchcock movies. Right? I was a big fan of watching Hitchcock.

Jeffery:
Well, there was one with Birds. What was that one?

Benton:
Birds? Yeah there was somebody who had, it was on the topic subject was on birds, I can’t remember. But there was yeah I’m gonna have to look it up now quickly.

Benton:
I think Sean Connery was in that one. And who else? Who is the actress?

Jeffery:
It was actually called Birds but it’s uh The birds, it was the birds. The birds. Yeah and it was Tippi Hedren, Rod Taylor, Heart rate, Jessica Tandy — Jessica Tandy that would probably the the big one there. Right? Yeah that’s the one I remember the most of most of Hitchcock stuff.

Benton:
Okay so so of those characters in the film, who would you have been, Jeffrey?

Jeffery:
Oh jeez

Benton:
that’s not an easy one, I guess you could have been the hero. Which would have been Rod Taylor,

Jeffery:
yep.

Benton:
I remember Hitchcock made a cameo appearance in that movie as he does with many of his movies. I think that he was either coming into the shop or bird shop or coming out of it and there was a cable car in the background,

Jeffery:
Yep, yep. He does remember him making that scene for sure. I’m gonna have to watch it again because I couldn’t I can’t remember which character I play it.

I haven’t probably seen this one and I used to do a lot of old Hitchcock film because we used to go to tiff and did a lot of stuff through tiff and I remember watching a lot of Hitchcock’s material but I’d have to think on that one which character I would play.

Benton:
It’s one that I probably would watch every six or eight years, you know, just bring it back out from the library and and and watch it once again. It doesn’t get old

Jeffery:
nope. No. Most of his stuff doesn’t. Right. Right, okay. The other one that I probably would say in that time frame that pops out is like a Marlon Brando with like a streetcar named desire. Like those ones were all classic, really well done movies that just stand the taste of time. Yeah. Well, all right. So, uh, we can rehash movies all day because all types of movies, the last I guess the last question I would then jump into is what is your superpower? And that could be business, personal, anything. But just what really defines something that you really have. This man, I’m really good at this. This really defines how I do something in a day or a week or anything I analyzed or do whatever that might be.

Benton:
I think that would be the ability to relate to another person and to be sympathetic rather than to be judgmental.

Jeffery:
I like it. You can emphasize or you have a strong empathy to work with people and understand them, so it allows you to be nonbearing but very and not confrontational, but very educational, learning and working with them.

Benton:
I guess I am always an educator at heart, yep, I can see that, I can see that. Well, it certainly does the lineup in today’s discussion and Benton, like I said at the beginning, super big fan, glad and excited that we got the chat today. I learned a lot, I think the audience is gonna learn a lot and we like to end the show with giving you the last word, which is anything that you want to share to a start-up to the entrepreneur community, to investors.

I leave it to you to kind of give us the last thoughts. But again, thank you very much for your time today. You were fantastic.

Benton:
Thanks, JPP. So let me just end by by by uh, telling this to two founders that gets started in Canada. Canada is a very small market work as quickly out of the Canadian market as you can. So if you think that waterloo or Toronto is your first market, don’t, don’t look at the second geographic market as one that is 30 kilometers away, think about voter Colorado or Portland Oregon or Tampa Florida, right? And if you find that, that it’s difficult to get to them and develop them as a market, then ask yourself, am I truly going to be a global company? You’ve got to crack that nut.

Jeffery:
I love it. That’s some great advice. I’m going to use that brilliant. I love it. Thank you very much Benton,

Benton:
It’s been a pleasure J. P.

Jeffery:
You’re a good man. Thank you. Well, that was awesome, Benton. I’m a big fan. Uh we’ve, I’ve been working on and off together I guess, uh, through multiple angel groups, uh, from our events, through two other events.

But Benton’s been fantastic. Really enjoy how he dives into questions, how he works with startups, his advice on trying other markets, and if you can’t make it work there then are you really in a global space and man just lots of great things about giving back mentorship, what you learn from when you’re working on that first company, having co-founders, How important that is. So yeah, there’s a lot of great sound bites there, and uh, really a pleasure to being able to chat with, with Benton even about all the sides of innovation.

So pretty cool. Uh, like us, share us, post it — all those great things. Thank you very much guys. Have a great day.

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