Jeffery:
Awesome well welcome everybody today we are speaking with Jon. And John I’m going to say your name last name but i want to make sure i don’t say it wrong is it ober osler?

Jon
Holzer. Holzer. Head woodsman in German. Yes Oberholzer.

Jeffery:
Ober holzer. Okay awesome well we don’t want to mess that up especially when we’re sound biting that won’t sound very good so everybody welcome. We are at OPN and today we’re going to be diving right into and learning a lot more about angel investing yet again and Jon’s going to walk us through that but Jon why don’t you give us an idea, a little bit about yourself, some background. Just to kind of shape this conversation today.

Jon
Sure. I’m a tech investor and employee out of the Waterloo area, Waterloo grad. I have been involved in angel investing for technically maybe seven or eight years but probably a little longer than that when you look at what my first investments were back in back in the 90s when i kind of got into the industry.

Jeffery:
Awesome and I guess what is the reason you decided to get into angel investing? What was the traction? What drove you into?

Jon:
It well if you go back to my early investments, what really got me into startup and startup like companies is the job that i had out of out of university so I worked at a company called Waterloo Maple as a co-op for several years. During the time i was a co-op I wasn’t allowed to own shares because you had to be an employee to own shares at that time so the minute I became a full-time employee i jumped in there and bought whatever shares I could technically not an angel investment in normal sense, and they weren’t a startup, and they’d been around for a few years, and had maybe 25-30 people at that time; but the idea of I want to be a part – a partner in whatever it is that I’m spending my time on was a real idea. Then a little later on I went to Rim where i didn’t need to purchase any shares because you got options at that time. That was a big thing in the late 90s. I spent 10 years, they were 10 very successful years and then took a little break. Moved on to a company called DJiro and that was where you’d probably have my very first real angel investment in in around 2009. So I started there as employee, was getting some shares as an employee, getting paid out that way because we were really three or four people at that point. And from there… actually that was great.. We were getting paid in shares but they had to have cash to pay the other part of my compensation and we had to hire other people so they need to do some raises. So that’s when I kind of got engaged in it a little more deeply. Had a few years then without making any new angel investments but moved into G-Tan through in 2011 or so as the result of an of another round of investment in DJiro where you needed to be a member of an angel group in order to get matching government funding or whatever the story was at the time. So I magically became an angel investor at that point and from there started to invest in a lot of more local startups .

Jeffery:
Oh that’s awesome. And is there, while you’re going through this process, was there, you obviously started earlier on by doing this through employment, then it became a bigger piece you started to enjoy it, really wanted to have more of a stake in what you’re working in. But then obviously spreading this around what was the real driving force behind it? Was it because having an ownership stake? Or was it something else?

Jon:
Initially, it was the ownership stake but as you get on in your career, you find that you realize that you’re not going to be able to do everything. And I enjoy deep commitments at the places i worked at, you know, i’m not somebody who just is in and out within a year or what not. So in order to kind of have a broader range of experiences, angel investing for me is a way to use a way to accomplish that. I’m involved in a lot of tech companies, directly or indirectly in ways that I couldn’t be if i was simply an employee. So for me that was a real motivation to get more deeply involved. And there’s an element once you get a certain place in your career, of setting up the next generation of startups and businesses. If someone hadn’t done what I’m doing now back in the 80s, the companies that i started with in the 90s wouldn’t have existed. So there is that element of it too. And for me while i will i have a relatively broad, within canada, geography that I would invest in a lot of them do flow out of the local community here in Waterloo.

Jeffery:
Well that’s great. And being a tech guy myself as well, I looked at it pretty much the same way when i was working in early stage companies, bringing them into Loblaws even though they may not have really wanted me to. But i got so much traction from it. I never, at the time, could invest. But man as soon as I got out, that’s all I could think about. How do i actually help more and invest in some of these companies because from a grassroots standpoint, it not only creates jobs but it drives a lot of the industries and you get to learn a lot more. And how else can you learn if you’re not just in depth with all of them. So that’s pretty cool, that you’re doing that. I find a lot of tech guys kind of have their way of trying to get in beside the tech and figure out how they can grow and learn and add extra value to them so that’s awesome. So in that kind of last 10 years that you’ve been kind of shifting around, investing and doing that, what’s the favorite part that you have, what really makes this work for you?

Jon:
I enjoy interacting with the entrepreneurs. Often pre-investment is is when you spend the most time with them. For better or for worse, sometimes, they’re just not as interested after they have your money but and sometimes they’re just growing and moving and but having been involved with the local angel group for again the better part of eight or nine years, and spending time working in the selection process for the companies that come forward, I really enjoy that some of the really really early stage and helping them shape their idea a little bit and shape the way that they talk about it to to investors that is something that i really enjoy. And as you mentioned the learning aspect of just new technologies, new areas of technology that you don’t get into, if you’re focused on one company when you’re the one you’re at it. A lot of tech people you can get focused on that one thing, and very deeply, because that’s your nine-to-five job and you don’t get exposed to other things that are going on in the marketplace and in technology without kind of seeking it out – and by working with the startups, you really do get to see you get to see the future in a certain way.

Jeffery:
Right. I really like the idea that you you’re working with them in early stage, really early on. Helping them shift and shape those ideas and, then probably go to market within a year or whatever that time period is. A lot of people don’t really find that part the best to get into because it’s the hardest part. You’re really spending a lot of time with the entrepreneur to figure out how to shape them through, their business, their modeling either financial look outward or forward-looking, documents all these things a lot tougher for someone to grasp. Big fan of that as well, but I think that it really does help shape that entrepreneur going forward but then when they start that next company, they’re going to come to you for that too right, so you really are getting a really advanced structure with these early stage guys and women that are launching companies so that’s pretty exciting. Is there a is there a number of companies that you look at investing in per year? Do you do it more as filling gaps in a portfolio? What kind of — is your structure on when you look at investments?

Jon:
The number of companies, there is some variation, it’s not like i set out at the beginning of the year to say i want to invest in only this much or i’m only going to put this much capital forward. It tends to work out that it’s somewhere between zero and, in my case, as many as four. Usually less than that but maybe one or two new companies a year. And as as your portfolio builds over the years, that number doesn’t necessarily go up, it goes down because you end up making a lot of follow-on investments to your existing companies. So with with a lot of angels, where they are in their portfolio is going to depend on how many companies they’re actually going to be seriously looking at.

Jeffery:
So in that and you mentioned that you have follow-on, so is there a percentage that you look at inside of all of your investments? You set aside 30 percent or again this is just i’ve got a bucket of money and I’m just going to figure out how i do it each year and if some go into reinvestments versus new then that’s what I do.

Jon:
The latter. it’s really opportunistic and you don’t necessarily go in saying i’m going to reserve three times my initial investment in this company. Because the way i tend to invest is with other angels, through angel groups, so you have other capital along with you in that round. I typically avoid being the loan investor because i don’t have enough capital to do that right and you need to understand as you get into thes