Brian Hunter
IMPACT INVESTING

Brian Hunter

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President at NorthSpring Capital Partners

Follow your industry news – Brian Hunter

“One of the things I do every morning is I read the press releases that come out, just scan them, and usually every day there’s some press release that some company issued that relates to a client that I’ve got an investment in.”

ABOUT

Following a 30 years career in providing debt and equity financing to hundreds of businesses in Southern Ontario with Roynat Capital, Canada’s leading private merchant bank, Brian Hunter co-founded NorthSpring Capital Partners.

Brian was awarded Golden Triangle Angel Network’s Angel of the Year award for 2017 in recognition of his active leadership in multiple due diligences and successful investments.

In 2014 he was named a Paul Harris Fellow for 20 years of service to the Kitchener-Conestoga Rotary Club including acting as President and as Chairman of the club’s major fundraisers which raised nearly $1 million for local and international causes.

Brian earned his BA in Economics and his MBA from the Ivey Business School at the University of Western Ontario.

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THE FULL INTERVIEW

Brian Hunter

The full #OPNAskAnAngel talk

Jeffery:
well just like we always do in in everything that we run here at OPN we love to just jump right into it, brian, super glad and excited that you were able to join us today at O. P. And ask an angel. And uh you know, the best way for us to kick this off is it’s a live not that was live now today. We we just run it and then we get to edit it after and make some great things out of it. But the best way to start is if you can give us a little bit of background on yourself, where you’ve come from, where you are today are the things that you’re working on. And then one thing about you that nobody will know.

Brian:
Oh Jesus. Uh well okay, I’ll give you the sort of the business background. Ivey MBA. Uh coming out of business school, joined Ryan at the capital in downtown Toronto first. Canadian place and jumped right in, feet first into lending to small and medium-sized companies. I have led to virtually every industry. They’re typically term loans, financing, real estate, equipment purchases, acquisitions, debt, leasing, a little bit of equity. It was there that I met my current business partner, I helped him by several businesses and kept him out of bankruptcy.

So we had a really great trust relationship there and his business prospered did really well. So I retired from Roynat about 12 years ago and the two of us said, let’s do something together. So we decided to start a private equity fund, North Spring Capital Partners. So we have two other partners. So there’s four of us. We invest our own capital. And we started out just doing traditional industry because he had a manufacturing background and distribution and they were comfortable with that. And the rule was no startups, You know, they’re too risky, you know, they’re so prone to failure, we don’t want any of that.

So we, we did a lot of acquisition financing and that went well. But living in Kitchener, I certainly saw the angel investment community starting to take off and the tech boom was happening, um, you had the rise of the accelerators like community tech and you had government funding coming in for the Angel for the early-stage companies. And I just said guys were sitting on a gold mine here, we’ve got to get into investing in some startups, and, uh, they reluctantly agreed.

And that was about seven years ago and we started to invest in early-stage tech companies. It’s gone quite well. So something you guys don’t know about me, I was were we joined a Golden Triangle Angel network in Kitchener Waterloo and I was named Angel of the Year for 2018, so I’m really proud of that. I’m also a member of the kitchen, constable rotary club in the past president there and shared a number of big fundraising projects that they have, like uh we used to have a dream home that would raise up to a half-million dollars a year and uh a lobsterfest and Turkey drive or raise money for people to get a turkey and a food hamper for christmas that raises almost $400,000 a year. So that’s been fun to do on the side. And then my other side is my sports background, I’m a triathlete. My uh top race would be number 13 in the world, that the Madura World Championships boat to 15 years ago.

Jeffery:
Amazing. Yeah, huge. Well, I was gonna ask you about the biking and the track lead side because I’m like, come on, there’s something we gotta dig into this one thing, nobody on would know. That’s great, so appreciate the sharing of that. And it sounds like uh you were made to invest just the background that you have the M&A work and all the things that you’ve done, the debt financing side. You really understand that space. So it’s really helped kind of uh the curiosity, but also allowed you to really dive into that early stage startup world. In that debt side of things, once you said that when you started to work in the space and you know, they didn’t want to go into early stage at the time, what was kind of the reason that people were afraid of it at that time? And I think even in my end I was looking at it and healthy startups back 20 years ago and it was, it was so pushed away, people didn’t want anything to do with it. And it was high fail, high everything, but I think it just was so unsupported that it kind of brought that negative connotation to it. But what was the reason you guys looked at it then and said, this isn’t going to work? And then what was the change to it? What got you guys after you said you found a gold mine? But what was the real change that started to do? It was the government funding that said, hey, if they’re going to come in, there’s gotta be something here. Like what was that change that created that?

Brian:
Well, I think it was the angel network that I could sit in a room with a dozen other angel investors and look at a deal. And some of the guys, some of the Angels were ex Blackberry people. So we’re looking at a software company and they know the questions to ask and they just know the industry really well and I can piggyback off of their experience and knowledge.

So that was very comforting. And then we would be investing alongside some groups, like from Mars who have an excellent track record. And so that gives you a lot of comfort. And then they’ve gone through an accelerator program. So they’ve received some coaching, they’ve got some government funding, maybe they want to pitch competition made, you know, 50 grand or things like that so that you weren’t investing at that really early startup.

They had matured a little bit. Some of them have some revenue. They’ve got the product that’s already been um, pretty much developed. You can talk to a customer and some of the ideas we’re seeing just makes so much sense that we said, let’s let’s try it. And we started small and just sort of grown into it. And now now we’ve pretty much stopped doing traditional industry deals and really just focusing on startups.

Jeffery:
That’s awesome. And can you share a little bit about what you’ve kind of learned in that seven years? Because before that you were doing different types of lending. So you can kind of see where these companies were coming from. And that could have been a company that was 5, 10 years old. And now we’re coming to you for lending in a bid to your size. But what have you seen this really changed a lot in the industry of early-stage companies?

Brian:
Well, certainly