Jeff Mesina

Jeff Mesina

"I think that for for us investors if we can’t necessarily get in to make an investment, we should really take it upon ourselves to just see who in our network could help out. Whether from a funding perspective or provide some level of advisory, something to that effect. I mean that's the only way we'll see today's early-stage entrepreneurs grow into successful entrepreneurs."

- Jeff Mesina

Jeff outlines what she looks for in a start-up

Talk Takeaways

For this episode, Jeffery Potvin talked with Jeff Mesina on his company and his investment strategy. The various ways a startup can raise funds and how crowdfunding can be a good avenue for really early stage entrepreneurs to generate capital. He also shared his preferred verticals, his preferred terms, the importance of coaching and networking.

Before capping the interview with his COVID-19 investment insights, Jeff shared an awesome entrepreneurial story on resilience, how the management team despite the roadblocks pushed their way through and how the pandemic managed to turned things around for the better.

About

Jeff is presently a Director (Originations), at Cortland Credit Group Inc., as well as a Director and Audit committee member of TSXV-listed Brockton Ventures Inc. Previously, Jeff worked at a Toronto based asset management firm and venture fund, specializing in the review of investment opportunities. Jeff has also worked at other asset management firms such as Front Street Capital and CI Financial. In addition, Jeff spent some time in the investment banking sector, working for firms such as Haywood Securities, Macquarie, Toll Cross and Alternative Investment Partners.

The full #OPNAskAnAngel talk

Jeffery:
All right welcome everybody we are at Ask angel and today we are with Jeff Messina and very excited to have this conversation, we chatted a bunch of times, we met at a few events, our event a while back, and I just love all of what you’re doing – especially in this space. Anybody that’s giving money to people that’s exciting for me just makes the world go different. So one of the things I want to jump into right away but I guess you can start it off by giving us an idea of your background. Where you came from, what you’ve been up to, and then kind of where you’re going and that’ll uh help stage kind of the next questions.

Jeff:
Yeah absolutely thanks JP. And thanks very much for inviting me, for hosting this event. I mean some of the topics that we’ll probably cover — some of the questions that will be raised will be very relevant especially during this uh crucial period during this pandemic. But you know just going back to your question, I’ve been in the investment space for roughly over 15 years. Basically started off in the investment banking world working out a few boutique shops, Haywood Securities being one, Macquarie being another. And so eventually I started in that general space before moving over to the investment side so I was working for a few firms like CI financial which is one of Canada’s largest asset management firms, Front Street Capital was another one. They were more of a hedge fund and then I was working for another company that’s based in Toronto called AIP which had a bit of a VC spin to uh their platform. And today, I work as a director of originations at Cortland Credit Group also based in Toronto, and our focus is largely more on the fixed income side as well as early stage investing but from a non-dilutive capital financing perspective.

Jeffery:
Awesome so how did you get — what was your interest that got you moving forward in this early stage space?

Jeff:
I think you know when I was working in the investment banking space, when I first started off… A lot of these companies were not blue chip names, they were private companies, some of them were small cap, micro cap, public companies and you know I mean I guess I’ll be quite candid – the main draw was just sort of the upside return on a lot of these potential investments. But later on I mean that was when I was younger and just getting an appreciation for the overall space, as I started to switch over from investment banking into the asset management VC buy side environment, I was sitting across the table from a lot of these early stage companies that were looking to raise capital and to me I was just drawn by the passion of these entrepreneurs hearing their stories, looking at how they were looking to transform their space, the world what have you, and so it was at that moment that I developed a greater affinity for this particular for this particular space.

Jeffery:
That’s awesome so you got you’re in a room you’ve got these younger companies coming in, they have no idea what they’re doing, so you kind of just start to guide through, is it more on the business side that helped you generate the value back for them which is because you guys were lending finding different ways to give them funding? Or were you kind of starting off and saying hey I think I can help you from over here and maybe I can throw some cash at you myself and I’ll get you guys more ready and then when you get a little bit further on then I can bring you back in front of what we’re doing?

Jeff:
Yeah I would say initially it was more so the former. So I think the immediate contribution was on the funding side. But you know as that relationship started to build, and as I started to become a bit more familiar with VC financing, and then knowing some of the other potential participants or some knowing some of the participants in the space and developing those relationships, you know I think one of the other aspects that I was able to contribute to some to the conversation that I had with early stage entrepreneurs was that if we couldn’t necessarily fund them ourselves, there were other people that I could happily make those introductions. And it may not necessarily be on a funding perspective, it could be with respect to helping to build their board, or if they’re looking for a lawyer with respect to any IP that they want to explore or secure, or even from a elementary level just having a bookkeeper or a CFO to help them with the financials.

Jeffery:
That’s awesome. So you became kind of like a rolodex for these young companies.

Jeff:
It’s a small community and you see some new startups that’s true, but at the same time too you’ll see several serial entrepreneurs and you know they’ve already got that track record. They may be venturing into new space that may be different for them so if I could sort of lend that level of expertise or network then by all means. I think we should be willing to help and develop that ecosystem and help entrepreneurs build their ventures.

Jeffery:
No I love that you mentioned earlier that you spend a lot of time in venture debt, and trying to find different ways to help companies with financing, can you give us a bit more background and understanding of how that looks or how that would look in the the new world I guess with where you are today?

Jeff:
Yeah so venture debt, I mean typically we’re looking for some form of collateral. And so typically for some early stage companies they may not necessarily have a certain collateral base that more conventional lenders are looking for, but you know we like to think outside of the box, and one of the forms of funding that’s accessible to early stage companies are the grants or funding programs that the government is able to provide whether it be SHRED or IRAP. If you’re in the CleanTech space you might be following an application for SDTC or you may have already qualified but you’ve completed phase one and out of phase three so additional funding may be coming through. So for us you know we’ll take a look at some of those opportunities and help provide companies with that immediate working capital until they get to collect some of those funds. So that’s that’s just speaking on behalf of the platform where I work, but you know from a personal perspective, I’ve been engaged in the VC space for some time now so I’ll personally invest equity into various companies it all depends really on the story and and who’s running the show right. And there are other factors too that will attract an equity investment but you know what, we could get into that a bit later in the in the dialogue.

Jeffery:
Oh for sure. So in this and there seems to be quite a few companies nowadays that utilize the SHRED or the IRAPS, the government grants to be kind of that flagship into the companies is that kind of the same thing that you guys are using that same tactic or do you guys have something that’s more unique on how you’re funding like is there a larger bank role? Is there other ways that you guys are operating that kind of set you aside from you know the trend credit companies that are out there like they’re offsetting their SHREDS and say you know what we know you need a hundred thousand or a hundred million or whatever the number is and then we’ll give you that money tomorrow and uh we take 20 points from it and we clear it that way
is there like you guys have different ways that you structure that as is that kind of approach?

Jeff:
Yeah so I think uh you know that’s one of the ways that we can we can look at the strategy but I would say that it probably depends. Each company is different so we’ll look at it case by case and if some companies may have already gone past tthe proof of concept phase and they’re in that commercialization phase then we’ll certainly look to provide some additional capital beyond what’s going to be provided from the government funding as well. There could be some other catalysts involved so there could be basically on the verge of signing a large contract with some other partners whereby you know there could be a potential strategic equity investment from some of those larger players in the space, and so that would probably give us some degree of comfort as well maybe to just write a check that goes above and beyond what would be supported by government funding.

Jeffery:
Very cool and do you have any specific vehicles that you look to do the equity through, is it a balance of payback and equity? Is it broken down by just like interest in three years like how do you guys do it as a term?

Jeff:
That’s a variety. Like I mean, we kind of sort of find a nice mix that’s sort of mutually beneficial. I mean typically we’ll try and do something that’s more on the bridge side so it’s relatively short-term, but on a more personal level I guess I would be more patient with some of the capital that I would be deploying or some if I invite other members of my network to participate, we would probably form a bit of a syndicate and look at maybe a convertible note structure if it’s not an equity investment that we make. Can we look at a safe? Yeah I guess we could but I think for us you know maybe a convertible option would probably be more appealing and we wouldn’t necessarily take, the interest could be paid as a pick as well. So I mean it doesn’t necessarily need to be a cash interest payment, could be just paid in shares as well.

Jeffery:
Perfect. That’s a good thing so have you found that I guess just the way the markets have been going with on the COVID side have you seen increased deal flow now? Have you seen reduced deal flow, maybe more fails, more wins, how’s that environment been shaken out for you guys and yourself obviously personally but also as a lending business?

Jeff:
Yeah I think at the start of this pandemic, I think there was a lot of uncertainty. Quite a few challenges and people were just trying to — businesses were really just trying to navigate these choppy waters and and really trying to determine what their next move was. I mean first of all I mean at the end of the day they’re running businesses so you know they’re trying to do right for their employees. So I think that was the biggest thing I mean for a lot of companies trying to understand where they can restructure without having to let go many people, what other expresses they needed to cut, what programs they needed to apply to, and so you know now that that’s out of the way, and i’ll say that while they were trying to navigate that, I think it was it was fairly muted in terms of just looking at opportunities but you know since then I would probably say around May things have started to pick up more uh steadily.

Jeffery:
No I agree there has been a lot more I think there was probably two weeks when it all started where I thought like oh my god this is crazy there hasn’t been like — I feel like I should be watching Netflix all day. And now it’s been just kind of unbelievably swamped and not being able to breathe everybody’s kind of just moving like crazy and it feels like we never had a pandemic I guess but everybody’s just shifted the way they work and operate and move forward. You mentioned that you look at obviously from an asset base you try to find different measures that will make the company more investable, and as investors we look at all different types of things to prove that this company is doing something that’s being done better than anybody else so that they’re going to be able to grow and be the next large business. Is there any pieces that you guys really focus on because it is an early stage company from an asset or is it a product service e-commerce, SAS model, are there specific areas that you like to look more into and have more interest because they have a different style of return?

Jeff:
Well I’ll say this from a fund level, we did actually invest in an e-commerce play. We funded them last year, we provided them with acquisition financing, so they had already built a a reputable platform which offered a variety of experiences from travel to dining to groceries and as well as some other leisure activities. And so they were making an acquisition we helped to provide them with capital, they were looking for some additional working capital about a couple months ago which we would have been happy to provide or even some acquisition financing so follow-on financing to our original facility but you know it’s just such a hot space right now obviously with Shopify. I think if my figures are correct either they’re the number one or number two publicly traded market cap or right now largest, sorry, largest publicly traded by market cap company. And so because of Shopify’s success they’ve been able to leverage that and seek a go public opportunity right now. So while they’re doing that as well, they’re actually also talking to one of the big six banks that has a key focus on technology and that facility will ultimately take us out. But you know I think the big takeaway here is that it’s great to see the ecosystem working in tandem so for us providing that initial growth capital and then all of a sudden to have other participants like the investment banks raising capital and then having the conventional banks
come in and provide some other additional capital as well which will refinance us but obviously give that company a cheaper debt and more, more room to play with respect to uh their financials right as well as in terms of other themes, I mean we’re generally sector agnostic so you know we’re looking at clean tech, we’re looking at SAAS as you mentioned, probably not to a high degree but we’ll if the opportunity is attractive we’ll certainly take a closer look and we’ll look at healthcare technology diagnostics and other medical devices. In addition we look at FinTech companies as well, and we actually have finance quite a few on record and quite frankly I myself am a personal investor in that particular space as well. Crowdfunding I mean obviously we haven’t seen crowdfunding take on the same level of traction or um less resistance as say over in Europe, primarily UK and in Asia i.e Singapore. But I think with Reggae and Reggae Plus in the U.S, we’re starting to see those conversations start to pick up and if I’m not mistaken I think I was just reading something the other day the OSC is looking to provide some amendments or provide some additional guidance surrounding crowdfunding rules. Which I think is encouraging.

Jeffery:
To get more of it happening?

Jeff:
Correct.

Jeffery:
Create more liquidation out there?

Jeff:
Yes yeah absolutely, absolutely. And also just to provide early stage investors another outlet another option for funding because you know truth be told the CVCA just recently hosted their annual event albeit virtual but you know I think one of the key takeaways is that in the first two quarters of this year over year financings within amongst the VC members has certainly decreased right. So you know with respect to some of the trials and tribulations at early stage companies have to deal, with I mean obviously they need to seek other options if venture funds may not necessarily be able to write a check these days.

Jeffery:
Are you guys finding that’s happening quite a bit where you’re seeing ventures slow back focused on their portfolios and giving you guys a bigger pick up because you’re kind of a different format from VCs or angel investing, outside yourself being an angel investor, but finding that more people are looking at different ways and saying hey how else can I get funds here , this — I need help.

Jeff:
Yeah I think it’s tough. I think we’re both in the same boat. You know for us with respect to the due diligence component typically it would entail a field trip, or a site visit and so when you don’t have those opportunities to actually do a site visit, it does present some challenges with respect to getting a deal done not to say that you can’t get a deal done. I mean there are certain transactions that are still taking place, and albeit through virtual due diligence, you know we’re certainly trying to navigate around that dilemma. I think we’re getting better at it and which is helping to shorten the timelines right. But certainly it is creating a bit of a backlog with respect to trying to get through some of these opportunities in a more precipitous fashion. Right and I suspect that the same thing is happening with my colleagues in the VC space. Unless there’s already some degree of familiarity, where you know it’s just more getting an update, looking at some more refined numbers or updated numbers, I mean if there’s already been a site visit in the past then you know I think for those types of opportunities where there’s already a level of familiarity, I think you know you can certainly move those ones quicker to the finish line.

Jeffery:
So do you think that there’s this really tactile side to the business that no matter what we’re not going to be just making rapid fire investments and being like hey bob nice to meet you, Judy nice to meet you, I’ll send you guys money tomorrow. Like it’s not something that’s going to work that fast which is odd because crowdsourcing is pretty much the exact same structure which you’re not meeting anybody you’re seeing a pitch deck and you’re like I really love these guys, I’m going to put my money into them. And you have no idea who the owners are, you don’t know anything about them they get to watch a little video maybe see some snippets but oh they had 50 investors for the last week I should jump in because herd mentality says that they’re going to do well — 50 people like them. So is there a balance here, because I’m curious is that does this world just shift so much that it just becomes online dartboard throwing and this is where we’re in how we’re investing.

Jeff:
You know if a deal is competitive, I think you know perhaps we may look to try and exercise a bit more flexibility. but I would just say in general right now I think well especially in our particular space we expect to see now that we’re in the start of the second half of the year. We actually expect to see a greater wave of deal flow once summer is concluded. So basically from September onwards to the end of the year, we’ll see an increase in deal flow. So part of it too is just on our side, is just maybe waiting for other opportunities, better opportunities to present themselves, as opposed to just rushing for to to do the first deal okay that comes your way.

Jeffery:
Which probably makes sense too because if you’re looking at Covid hits, more people are unemployed. People are starting to put businesses together so there’s going to be more ideas they’re going to flush them out, you probably need three to six months to flush that idea, which kind of puts us in September time frame. So they’re going to get some traction, they’re going to get some build going forward, so there’ll be more interest for those companies when they’re a bit more grounded and have a few more wins behind their belts or they’ve launched their MVP. And that’s probably around that September time frame so there’ll probably be a lot more companies coming to market to get investment at that time.

Jeff:
Exactly. Yeah no that’s a very salient point.

Jeffery:
No that’s cool. So I want to go back to this crowdfunding thing. So I find it very fascinating and interesting and from a moral standpoint it drove me crazy because we put a lot of time into researching companies and founders and meeting them and going through all this to make that choice. And then you have this whole new vertical which is people that have it’s not high net worth individuals putting their money in, it’s just everybody that’s putting their money in. And they will receive even less information and knowledge about the company but it is way more high risk than obviously what we would be doing to make that choice because probably 90 of the companies that go cloud funding or probably don’t have that same due diligence and they’re not posting it so do you find that this is actually a good vehicle for startups or this is just an easy way for startups to find some access dollars that they weren’t maybe able to get in the markets before that?

Jeff:
Know I think it’s a great avenue to be quite frank I mean I’m actually signed up for a couple of you know just more for research purposes but i’m actually signed up to a few US crowdfunding platforms just to better understand what’s out there and what sort of traction they’re getting in the market. And you know maybe just before I dive into that question, you know I think we look at what’s happened with some of the Robin Hood platforms, people kind of read the headlines and see how sort of the mass retail market is just sort of jumping in there and you know making a level of investment that hasn’t been seen for in a long time with respect to the investments coming from the retail crowd. Now mind you of course some of those opportunities may not necessarily be the best, for example you know investing in a bankrupt company that’s about to go bankrupt like Hertz, but there are some great opportunities and again not to sort of take away from the theme here, I guess the main theme is that being able to engage those ambassadors can certainly help to spearhead growth within the early stage investment community. You know Canada has its own crowdfunding platform. I’ve had a few friends that have early stage companies that have run campaigns there and they’ve successfully attracted some dollars which has been tremendously helpful for them during this period but overall with respect to other camp, other initiatives, that and endeavors that they’re looking to looking to launch. So I think that if we can create more awareness in this particular space then I certainly think that you know it could be greatly beneficial for the early stage community.

Jeffery:
So I guess in a way it should be looked at just like you have crowdsourcing where you can sell a product before you build the product, so you in a way you set the stage tell everybody here’s what you’re looking to build, you sell a million dollars worth of that product good. And we did this one company that we invested in and they sold everything three years ago and they’ve spent the last three years perfecting the product they’re now going to market in the next couple months.
But I think if you treat it the same way where you crowd source by selling the product on — what’s the sites that are pretty popular there that everybody sells on…

Jeff:
Are you referring to the one here in Canada?

Jeffery:
Well all of them there’s a bunch of them that people use but it’s just totally — I always forget these. Anyways you can sell like product on millions of them so we get into that side they sell them but going back to the crowd source funding side it’s almost the same, you’re almost doing the same thing, you’re saying to investors you know what I’m going to come here first, I’m going to scrap together a few dollars, I leave it on an open safe or an open note, I’m going to raise maybe 100 000, I’m going to go and try and build my company, I’ll let the public invest and then I’ll go to the angel markets and everybody else and I’ll show you that hey we sold a million dollars of product already. We raised 100 000 through crowd funding and now we’re looking for your help on this side. So maybe it’s a form of de-risking because it’s giving you that early money that you wouldn’t have got if you didn’t go there because really at the end of the day, at such an early stage, it probably makes sense for those investors that are coming online to help because when you go to the angel groups they’re saying I need more data, I need more this, I need more that, and maybe that’s just a better way of finding a few dollars quicker.

Jeff:
You know the other benefit to to it too as well is that you know apart from just the fundraising aspect of it, you know there are a number of private investors high net worth investors or angel investors that subscribe to these sites and so you know certainly if there’s an opportunity that they come across that they like it also opens up that channel for a discussion. So you know maybe perhaps they can come on as an advisor, maybe bring their network if they’re particularly excited about that particular project, and maybe you know round out that seed investment with some other accredited investors. And then ultimately and if of course if they’re already part of an angel network helping to build that concept so that it’s presentable to those angel networks once they basically complete that funding and allocate it to building that MVP or or whatever initiative that they’re looking to accomplish.

Jeffery:
No I love that. That’s a great way of looking at it. I think uh it was tough for me to get through my head that if you don’t get funds here you’re going to go here and then those people are going to invest in you but your chances of survival are even slimmer now because you’re not getting supportive angels, you’re not getting support of VCs, so there’s probably going to be a high fail rate, so how can you go out and push crowdfunding when you feel like everybody has a 95 chance of losing their money and they’re doing this because they think they’re going to hit it big into a small company that’s not going to get anywhere. So I think if we look at it from a whole different kind of perspective and say you know what this early money into some of these companies there’s a big chance that if we can pick one or two of them up move them over they’re going to get that next six investments which could help them grow into being a lot bigger company, and it’s just part of that whole support in the ecosystem of getting those companies in at the right stages, so that they can grow to get to that right size.

Jeff:
Right. I will say though that I think that our regulatory environment is probably a bit stricter relative to the US. And in terms of the types of deals that can be found on Canadian platforms, I find that they’re not necessarily as early stage, you’re not basically an idea on a napkin type of opportunity. I think some of these opportunities that are being presented have some level of traction in their in their respective spaces, some of them are generating revenue, some of them have even been around operating for a number of years so there’s already some validity with respect to those platforms. There’s proof in the pudding essentially. And so the downside risk
well it’s still present, is probably less risky than say some of the opportunities that I come across
on the U.S platforms.

Jeffery:
Okay. So as long as it’s not part of that ICO world back a few years ago then we should be okay right. We’re not investing in somebody’s retirement fund.

Jeff:
Yeah, exactly.

Jeffery:
Which is good. Well that’s good I like that. That’s pretty short but it really gives you a different perspective on how these different facets are really helping in the funding world. And I think these all make a difference, it’s just you have to learn a little bit more about how each one really pans out. But I think that there’s some real opportunity there. So now fast forward, you’re working with different companies, do you work on a capacity of coaching, mentoring do you work with companies on that capacity as well or are you more just on the funding side?

Jeff:
Currently right now at the fund level, it’s just largely funding but prior to working at Cortland you know I was consulting and involved on the coaching side. In fact I used to attend a few Toronto Enterprise Meetings and in fact got involved with one of their mentorship drives and basically took a company under or matched with a company took it under my wing and just basically provided answers to some of the questions that they had and if I could assist them with any introductions, I would be more than happy to provide that. So and that’s one of the things that I appreciate, I mean you asked me you know what kind of things that I really enjoy about this, you know not only do I appreciate hearing the other side of the table hearing their passion for the story, and a lot of them you know some of them are serial entrepreneurs, they kind of have a recipe that they basically tend to follow, but you know for those that are just starting new you know that’s where I like to contribute and give back and basically provide them with some level of guidance or at least maybe help them to sort of streamline what maybe perhaps their focus should be as opposed to just trying to adopt a shotgun approach which may not necessarily lead them anywhere or it will just be time consuming. Right so you know if anything, time is also money. So if I can help keep them relatively focused so that they can achieve their milestones sooner rather than later, then you know I’m certainly game for that.

Jeffery:
Brilliant. Every startup can use a little bit more guidance and a little bit more help wherever they can get it. So and having someone that has a background in finance and banking has got to be huge help for for these startups because a lot of the time it’s usually the help they’re getting is applicable because some person worked or sold a company in this space and that’s how they’re helping so when you’ve got a broader view it really does build a different perspective in
for that startup.

Jeff:
Yeah, agreed completely.

Jeffery:
Is there a part of investing that you mentioned that obviously you like to help and give back. Is there a favorite part that you just love about working with startups? Is it the grind that they go through and you just want to feel part of that or what is it that really gets you gung-ho about it?

Jeff:
You know part of it is, I mean obviously you want to see them succeed and when they get to that certain milestone, I guess the easiest milestone is you know to celebrate as a liquidity event. Whether they go public or if they get acquired or maybe they get a strategic investor that gets involved that really you know adds to the credence of what they’ve been trying to build up all these years. You know seeing that side is always exciting, but of course seeing the seeing the early phases too, seeing them go from ground level and continue to build their platform basically continuing to build it towards the next milestone and you know continuing to build and reach additional accomplishments, I think that’s an exciting component in terms of just sort of tracking a lot of these opportunities.

Jeffery:
Agreed. Yeah, there’s uh there’s an element of excitement when you just hit this next little piece, next little piece, and that you’re being brought aware of that, and they’re bringing you in and saying hey guess what I just did today? It’s pretty exciting like I just closed my first million dollars or I hit 10 million it’s it’s mind-boggling. It blows you away, you’re excited for them, you want to figure out how to keep that ball rolling and that they’re making the right choices but at the same time then there’s the other side which is growing rapid speed and not being able to keep up and making the wrong choices and then you end up having to go back in and help fix problems. So I guess no matter what, there’s a slow growth and then there’s speed growth and they’re trying to figure out how to avoid the the big bumps so….

Jeff:
Like I’ll tell you, i’ll give you a good example. So i’m an investor in this one e-gaming opportunity and so you know they’ve met with a few VCs and the VCs certainly like what management is trying to do in terms of building the platform out, building the company out, but yeah and you know they they express their interest to commit certain funds of course there are certain strings that could potentially be involved and so it wasn’t the direction that this company wanted to take so you know the CEO just kind of you know just basically put their notes to the ground just basically kept on plugging away. You know one of the we talked about this already one of the options that they used was crowdfunding to help them basically get some capital, to get them to the next initiative. And then as an e-gaming company, one of the things that they provide is some the streaming content, and some of the streaming events that they hosted featured professional sports players, professional athletes, whether it be NHL players, whether it be basketball NBA players or NFL players. It’s just seeing their involvement on their platform is exciting, and then all of a sudden signing one of them to become a global ambassador for your platform. So to me I think, it’s not necessarily all funding related but I mean for the company these are massive milestones and for me as an investor, as somebody that’s kind of engaged to a certain degree on an advisory side, you know it certainly pumped me up.

Jeffery:
Oh you’re right. It reminds me of a quick story that one of the founders I invited him to a ball game and the reason why I did this was a few years ago was he said, “you know we got this baseball player that reached out to us and he wants to be our brand ambassador. I don’t know him what do you think?” I heard the name and I was like oh my gosh Josh Donaldson are you kidding me?! This guy’s huge!

Jeff:
Wow!

Jeffery:
He’s like yeah yeah I know he’s huge but he wants to be an investor, i’m like this is brilliant at this point i’m taking you a game. We went to a game and we watched and he was just totally stoked he’s like this guy’s amazing! I’m like exactly. He was not heavily into sports but his brand was so built around this so it actually worked out quite well for them. But it was just exciting because sometimes it’s not your space, you’re just mauling forward and someone comes up and says hey I want to rep this, I love what you guys are doing and blows your mind away. Blew my mind away more than his but so…

Jeff:
We don’t have to name the company but I’m gonna guess this is a beverage company.

Jeffery:
Yes it is.

Jeff:
And see that’s the beauty right. Like we see a lot of deals and you know I mean I may not be able to get involved in one deal but you know I might just say heyJP you should look at this company, next thing you know you could be taking them out to a game and there’s that sort of engagement. It’s just you know that’s how our ecosystem should work. If we don’t like a deal, it shouldn’t be the deals that’s where it ends. Like I think we owe it to ourselves as investors in general to the community and to the startup community and this is a big takeaway, I took this away from a panel that I heard last year, I think that for for us investors if we can’t necessarily get in make a make an investment, we should really take it upon ourselves to just see who in our network could help out. Whether from a funding perspective or provide some level of advisory, something to that effect. I mean that’s the only way we’ll see today’s early-stage entrepreneurs grow into successful entrepreneurs.

Jeffery:
I love it and and I completely agree with you. Like when we do our skip the line events. We have seven angel groups that are there which we’re part of and we help with the screening on both sides and the reason we keep growing this and bringing in more investors and more angel groups and VCs which we’re inviting you to come at the end of the month. Especially September because the one in September is going to be five Canadian companies and five global companies. So we’re bringing in global investors into this mix now as well but the reason why this is exciting is that every company that pitches at our syndication is that they get picked up by one or more angel groups. They don’t all pick up the same company because they all have a different underlying view of how a startup works, but they’re all willing to share and try and help move that company forward somehow. And if we did it as the way we were which is you keep going to each individual group if I get denied, denied. You start to get tired of being denied because you can’t figure out which one likes you if we bring them all into one group and then when we feed them out just the ones that like you pick you up then you avoid all of that time having to get knows when you know the company’s coming after you or the likes and these other ones can warm up to you because their base is totally different. They really are FinTech oriented or they’re health care oriented and they may not, you might not fit into their groupings of the types of companies they invest in but we don’t all think that way, we just think oh no we all are heard so we all need to invest in the same company. So I love the fact that you’re saying that you know what you gotta really hone in if you can’t help them find someone that can.

Jeff:
Absolutely and you just touched on something too. And this sort of goes back to you know involvement with entrepreneurs and early stage opportunities. You know you kind of mentioned if they go to different groups they get denied over and over again right, and this is where coaching comes in. This coaching is helpful. Like for those that aren’t necessarily serial entrepreneurs and they’re launching into their first endeavor you know they’re putting their heart and soul into it, and they think that they have probably the best mousetrap that’s out there and hey they probably do but you know they could be pitching to a group and they may not necessarily say something correctly or maybe you know they’re not providing as much information on their slide deck that gives a complete picture and as a result you know the investor on the other side says no. But you know this is where if there’s sort of that engagement with a mentor or an advisor, this is where they could take that feedback and help to coach provide it provide a coaching moment for some of these new entrepreneurs because you know I mean for those that are serial entrepreneurs and you know for myself I’ve been with involved in a few companies not everyone’s gonna say yes and throw money your way right. So for those that say no you know you just have to sort of step back and you know digest the feedback that they provide you and see if you could not going to change the entire model of what you’re doing but maybe there’s certain facets that could be changed maybe you work on your model, tweak your model, maybe you change your slide deck to incorporate points that would probably better convey what it is that you’re trying to sell.

Jeffery:
Yeah well it’s being open-minded right. It’s not everything’s going to work the first time but you’re going to get enough feedback to help you to the next one and hopefully the next one. You’ll avoid any of those little pit stops that prevented that one person from seeing your vision and the other person is going to get it right away and want to jump in and help. And again like you said, sometimes you got to pass on things you don’t want to pass on. It doesn’t work but it doesn’t mean you’re not going to circle back. We have one company that we’ve worked for with two years, almost three years, and we were like you’re not there yet but we love what you’re doing, let’s keep rolling and then eventually they came and said okay here’s what we got. Well done, amazing. We’re in close the round off and they haven’t raised since and they’ve been going like crazy, doing awesome great things. But it took us a while because they didn’t have the right product fit, market fit, for what we thought was a real winner and then when they had it they knew they had it and we were still sitting on the sidelines so it just was fantastic for us to be able to jump into that. And I think that doesn’t happen always like that. That’s amazing but it doesn’t always work out but I think, like you mentioned you feed the system, help people out where they need the help, but at the same time you’re coaching and helping people on you know when something goes wrong how do I improve on this, how do I become better because I don’t want to hit the same pit stops, and we all need a challenge and just learning from our mistakes helps us challenge the world better and become better at what we’re pitching.

Jeff:
Certainly. Exactly.

Jeffery:
So before we get into the rapid fire questions, I got one bigger question and then one last question at the end all end but okay so the question I have is that in the time that you’ve been working with startups and investing over the last 15 years, is there anything that you could say that you really think defines an entrepreneur or their business or a reason you want to invest? Is there a couple of things that you would tell the investment community or the startup community, you know what here’s what I really look for this is the thing that really gets me excited about a company or the entrepreneur or whatever it might be, and share those things of success that will help them become more successful.

Jeff:
Right yeah. I think the biggest principle that I tend to subscribe to is really the management team.
So you’ll find serial entrepreneurs that have had some repeated success and so you know for them they’re already battle tested and they may already have investors already so one they’ve got as in terms of management they’ve got the experience, two if they’ve already been successful entrepreneurs then they probably have investors that will follow them, so basically i’m just following alongside, investing alongside, some of those other investors. Right so those that would be probably top of list in terms of what would I be looking for. I mean does that disqualify an early stage sorry a first-time entrepreneur not necessarily. I mean an entrepreneur could be working on a particular platform, I mean let’s just say, let’s call it blockchain right. They’re working on this blockchain mousetrap and they could be doing it in partnership with Accenture or one of the big four ccounting firms. You know that or they could be doing something strategic with IBM. Right that would be certainly of interest right. So that would be another area that would basically draw me in. And then of course just the overall themes like you know I think with respect to what’s happening in the pandemic space, we’re certainly accelerating our road, our pathway to the digital economy. So you just have to think well what’s the digital economy going to look like, what’s needed for that and then just find opportunities around that theme. So one of the key things that I’m pretty big on right now is is cyber security. Because as we become more connected online we’ll certainly need some levels of protection for enterprises as well as for consumers. I mean you talked about commerce earlier on this call, in this zoom meeting, and you know we’re starting to see, well I’m starting to see, more online e-commerce related platforms raising capital and can continue to get some traction in their particular fields.

Jeffery:
No I love it. Those are three great points that I think that if there was an over-encompassing change in verticals that’s happening you’re right the digital space is changing you’ve got securities, you’ve got healthcare, all these spaces are really trying to take off because they were heavy to resource to make them work. And I think you’re going to see a lot of that shift so I like that. That’s some great things that really tie into why you would want to invest or even some of the verticals that you may focus on. So now we’re going to jump into these rapid fire questions and then at the end we’re going to do a crystal ball question so let’s fire this off.

Jeff:
Sure.

Jeffery:
All right so how many companies or dollars do you invest per year?

Jeff:
I’d say one to three.

Jeffery:
Okay, do you do follow-up investments?

Jeff:
I do.

Jeffery:
percentage?

Jeff:
It varies, I mean I wouldn’t necessarily tie a percentage, it varies.

Jeffery:
Okay, any notable portfolio companies you’d like to share? Like companies that you really were a big fan of, they’re doing well that you want to say hey these guys are cool check them out?

Jeff:
Well one I’ve invested in one company it’s in the E-sports betting space and they’re just doing a round right now so I invested in the seed round. E-sports betting seems to be getting a bit of traction these days and their valuation is much higher now and I think that right now uh there’s a high level of interest in that particular realm. Another company that I invested in that just recently went public it’s called the real brokerage, REAX is the ticker. They’re in the proptech space, they’re essentially a digital brokerage, real estate brokerage. But you know I just look at that opportunity in terms of a multi-trillion dollar market that’s looking for disruption.

Jeffery:
And the ticker was REAX?

Jeff:
Correct?

Jeffery:
Awesome all right brilliant. That’s good you mentioned a couple of verticals, any verticals that you like to focus on right now?

Jeff:
Yeah I think generally tech. CleanTech, e-gaming those would probably be the three main ones that’s personally I think like and if I were to include the fund I would say e-commerce and healthcare technology.

Jeffery:
Okay. Anything that you look for when you’re doing due diligence that you need to make sure you have before making a commitment?

Jeff:
Yeah. Basically when I’m doing due diligence, again just going back to emphasis on the management team, better understanding who they are especially if they’re not serial entrepreneurs and then essentially looking at who are some of the other existing investors that are coming in on this round as well.

Jeffery:
Okay any preferred terms?

Jeff:
Preferred terms, you know I’m good with doing common common equity but you know convertible notes I spoke about that earlier. That’s also an option on the table.

Jeffery:
Okay. Do you lead rounds?

Jeff:
Generally no. So I mean I think in one case I did but generally I participate alongside some other fellow investors.

Jeffery:
Okay. You take board seats?

Jeff:
Nope. But usually I mean if it’s being offered I’ll certainly consider it.

Jeffery:
And based on the markets of your investor groups pulled back or still looking for great deals?

Jeff:
Still looking for great deals.

Jeffery:
Perfect. All right so well there’s one other question but i’m gonna ask this one because though you mentioned the story before but okay always looking for some meaty great story that you could share about the startup you were working with or one that you saw that started from nothing they were hitting walls couldn’t find a market fit or they were doing super well fell off the cliff and then were able to catch themselves on the way down build it back up and turn themselves into a good company. Is there anything that you’ve kind of like a nice cool story that you’d love to share?

Jeff:
oh wow you mean that whole roller coaster ride. I usually try and stay away from the roller coasters but yeah there is a company, it’s also in the proptech space, and this is the one where I kind of let it with a few other investors we were effectively seed capital. You know they kind of pitched themselves as sort of blockchain like and you know to a certain degree I mean I think there are some of those elements in their platform even though they’re more of a proptech company which is just more software based. But yeah – I think they tried to piggyback leverage off of that whole blockchain momentum that we saw in 2017, 2018 and that quickly fizzled. So all of a sudden you know I think they found themselves having to they didn’t know okay well where could the potential capital come from right. So I mean obviously with the capital that they did raise, they just simply had to build out their platform and once they started to develop their MVP then all of a sudden they tried going out to the market again not necessarily as successful I think. They were still trying to find their identity right, I think they were still hanging on to that sort of heavy blockchain component of the business or the story they were stressing the blockchain component of the business. You know in some cases it was enough to lure a couple big fish in which kind of took a lot of people to take notice of what they were doing but unfortunately those high-profile board members quickly resigned and all of a sudden i’m just like scratching my head okay well you just lost you know some of your key ambassadors right for capital markets raising. But eventually you know they just stuck with it, they were able to raise another round of cash, built their business and of course then they got struck with, like all of us got sideswiped by the pandemic, they had to unfortunately let go of a few people and their capital raising efforts which they started at the beginning of the year were effectively halted right up until recently where i’ve been told they’ve now been engaged by or approached by a US investment bank that is keen to take in public so…

Jeffery:
Oh nice.

Jeff:
Yeah, yeah so you know it’s been a bit of a a long journey for management obviously that’s there’s been a lot of successes and also some lows within that time frame that they’ve started operating but it looks like it looks like the skies are starting to clear in their favor now .

Jeffery:
Oh that’s awesome. Love that up and down roller coaster rides trying to figure it all out in the end you know the pandemic may have actually helped them which is a good thing.

Jeff:
Absolutely. And the one thing that I will say too is I mean the entrepreneur, the CEO of the company, I mean this is probably his first active engagement in terms of running a company. So first time entrepreneur. Even though some of his previous workplaces allow for that sort of entrepreneur mentality, this is basically his first baby if you will. There have been some, i’m sure ,some stressful moments but at the same time too I mean now that the company is at this point now i’m sure you know he’s certainly relieved to have made some of those sacrifices and you know worked those those long hours to get the company to where it is today.

Jeffery:
Oh that’s awesome. No that’s a great story and I think like anything, it takes a little bit of time and you’ll hit a few roadblocks but hopefully you can overcome those to grow. So in our last last question and just quickly you mentioned some of it before, so we won’t do too much of the overlap but using your crystal ball where do you see the markets and investing in the next 12 to 36 months? Is there a specific vertical you think that’s really going to explode and or do you think that there’s going to be an increase in investing slow down? What do you kind of envision?

Jeff:
Yeah. I think there’s going to be an increase in investment particularly anything technology focused on the digital economy. I am starting to see you know i’m on a distribution and I see a number of deal flow opportunities that basically play into that particular space. And one thing that i’m liking right now too is now we’re starting to see that evolution in the tech sector where
we’ve built companies like shopify, even blackberry you know it had its moment in the sun, but yeah it’s still sticking around but you know the founders of that company they’ve created their offshoot funds right, so now we’re starting to see those early stage, some of those tech entrepreneurs that are giving back to the tech community and I think right now as I said we’re certainly aligning ourselves for an upward trend.

Jeffery:
Brilliant! No I like that and I agree that it’s good that some of these old juggernauts are now giving back and helping in the community so it is really helpful to open up some of that cash and get the earlier stage companies more access to be able to have the opportunity to grow because you know what they all need some sort of capital financing to move their business forward. Even if it’s just in micro steps before they can take big steps so that’s great! Well I think I will say that we got a lot out today, a lot of information as I will show always take lots of notes. So i’ll be hustling out those as fast as I can hopefully I can read them all at the end but Jeff, I want to thank you very much for your time it was fantastic getting to know more about yourself, more about how you kind of see the environment, your types of investments that you look at. The rapid fire was rapidly well done. I think we got out lots of information. So I think we’ll leave it at that but
I’ll give you the last word so anything you want to share to the investors or to the startups I give you the last word so you can share any final comments you want a voice of encouragement as you will and we look forward to sound biting everything and putting this up online and we’ll let you know when that is but I turn it over to you for any last words.

Jeff:
Yeah. I’d say that no person is an island so really tap into your network and don’t be afraid to ask investors orVCs if they could provide some degree of advice you know if you can. You know I mean obviously we can’t meet up for coffee necessarily but even just to engage in a virtual meeting or a phone call just so that you know you could get some further insight and maybe some help in terms of how to build your build your company.

Jeffery:
Brilliant! I love it! Well again Jeff, thank you very much for your time it was a great conversation and we’ll stay in touch but have a fantastic rest of your day and I was gonna say a long weekend and a good weekend I guess it’s not really long, the mid week celebrations probably are still carrying through but that’s right enjoy your weekend regardless and the heat. So have a fantastic day and thanks again for sharing.

Jeff:
My pleasure JP. You as well and thank you very much for the invite. I had fun thank you.

Jeffery:
All right man cheers take care now. Well there you have it, a fantastic review by Jeff Messina. shared lots of great insights. A big fan. I’ve known Jeff for a little bit now but really enjoyed learning more a bit about his company about how his investment strategies work. And I like the the last thing he said which is no person is an island. Well I think that’s a great way to kind of share that you really do have to utilize your network and start to figure out how can I talk to as many people as I possibly can because the more people I speak to the more opportunities i’m going to create by getting people more interested in my business or in what I’m doing. So fantastic little saying and I think that there’s also a big opportunity now when you look at crowdsourcing and crowdfunding that this could be an early stage vehicle for helping your company find financing early on and that could help really be able to allow you and your company to be more de-risked so that when you do go to the angel community or maybe one of them brings you forward is that you’re going to be able to show growth and show opportunity so there is something certainly there to look into. I think that there’s a huge opportunity and you know what even if you’ve got a great mousetrap you need to have great management and that comes from advisors, that comes from the CEO, that comes from the people that you’re going to bring into your company so as Jeff mentioned look at figuring out ways to make your management team stronger and better and inside of all of that look at what is my unique opportunity, what am I really delivering that’s going to make this a big change that someone’s going to want to have interest in and then find people to support you from investors coaches and advisors everybody outside of that thank you and have a fantastic day.

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