ICD.D Managing Director, Board Member
karl sigerist - Angel Investor | Venture Capitalist

"The best way to position your company to be investible is raising capital from customers through a thing called sales."

- Karl Sigerist

Karl outlines what he looks for in a start-up

Talk Takeaways

Karl Sigerist talks about his entrepreneurial background, the business lifecycle, customer validation, coaching, and the importance of vision and culture in driving startup success.

About

  • Serving as an Advisor to founders, entrepreneurs, chief executives, mentoring recent business school graduates & newly immigrated executives.
  • Seeking board governance roles and advisory work aiding founders and business owners through strategic and financial decisions.
  • Pioneering and experienced technology and financial service executive. Leading, innovating and building multiple high-performing teams that scaled to grow 80X assets 25X revenues and 18X earnings.
  • Proudest accomplishments include being a founding member of 5 privately-owned start-ups, 2 start-up business units within the public company environment, having led turnarounds of 3 Canadian and 1 European subsidiary of a public company.
  • Having built cultures and led teams that achieved Growth 500 status for 5 consecutive years and Top 100 Small & Medium Enterprise Employer honours for 2 consecutive years.

The full #OPNAskAnAngel talk

Jeffery:
Welcome, Karl. Thank you very much for joining us today. We are at OPN Ask An Angel where we interview and get to learn what investors were looking for to help early stage founders figure out how they can better improve their approach to investors. And Karl, I think that we’ve had many conversations over the last year that you’ve been back in Toronto and working with GTAN and the group and, of course, a couple conversations prior to this. And one thing I found is that were very similar on so many elements of how we look at startups and how we want to help them and how we help them focus on being invest already versus where everybody else is kind of taking this different approaches where I’m trying to make your business ready, and I feel that you’re ready for investing. But I really don’t know that approach because I’m not an investor. But before we dive into all of that, I’d love to kind of take a step back, and maybe you could give a little bit of a background and introduction to kind of where you’ve come from a little bit about your background on then where you are today. And then there’s one question is one thing about you that nobody would know.

Karl:
All right. Great. Well I am the child of immigrant parents. My heritage is important to me. My both my father and mother, uh, themselves had a very entrepreneurial journey in the Netherlands, where I was born on demand and continued on in Canada. They, in turn, came from very entrepreneurial grandparent’s both sides, so aunts and uncles everybody everybody was in business or had a business or was in business for themselves or in business, whether members of the family. And that was just kind of the we didn’t growing up like that as kids. You didn’t really — You heard about people whose parents worked for other people. And you you finally got to meet some when you went to school. And you thought was interesting, you don’t work for someone else. Okay, so but it’s just in our DNA, uh, to be entrepreneurial. But of course, as growing up in that environment, I also saw the high and low of that. So I kind of swore that off. I thought, That’s not the life for me. That is way too risky. There’s way too much up and down in the family and what have. So, for the 1st 20 years of my life, I pursued a corporate past, Uh, and, uh, but but I was always extremely What would I coined? Is entrepreneurial. So working within corporate environment, fight that and always being first at trying something or being innovative and being creative, you know, figuring like finding products that weren’t selling and then figuring out how to sell them and create markets for them. Or, you know, a disruptive way of doing something which most of the organization hates change. Embrace that change and ended up at a very young and early age with a tremendous amount of responsibility. But, you know, in my early twenties I was running a sales organized a put a team of 48 people in a corporate environment had very quickly being recognized this sort of ah, you know, uh, uh, just it just it was, you know, it was what came to me and just the way it was in that organization. stayed there for some time. Invariably, in the early nineties, you know, wasn’t again good opportunity to be attracted to very entrepreneurial corporate environments. And again be the new where there was a new start up in a corporate environment or a new business unit within a corporate environment. Or also, if they had business units that weren’t doing well or weren’t performing well and most being young at the time. You know, most of the senior guys would never want to take on an underperforming business because it’s got great political risk to them. As a young guy, I mean, if I fail, that’s what people expected me to do. But if you’re young guy and you take on what looks like it can be failure, and then you don’t fail, you earn your street cred pretty quickly. So, you know, now, looking at that past, uh, it all makes sense to me, but at the time, it was, you know, a very, very fun time, but and also seeing that a lot of almost, you know, here’s my value prop too. When people ask me about me, I go while every boss I’ve ever worked for seven or eight figures richer after having worked having me work for them. I said, That’s the value prop. But at some point, you say, well, maybe I should do that for myself as swell. So we, you know, started to in the started to look for opportunities to be more entrepreneurial and get a piece of the action. And that’s kind of let me further in life to ultimately, you know, start to embrace the DNA that I have been fighting. I’ve been fighting and to be entrepreneurial. My last venture was a business in based out of Vancouver. It was about a $4 million business. The owners had held it for about 10 years. It was they bought. It was a $4 million business. 10 years later, it was a $4 million business. They asked me to come in at that time, I’d come off of running the European subsidiaries for public company in Europe that I turned around. And prior to that, I had a role in Bay ST at another companies. I’d run, you know, 202 – 100 people size companies inside these companies, and these guys came to me with would you like to do this? And this was a $4 million business. They hadn’t done anything that small like until till, like in my early twenties. But I thought, well, here’s the personal challenge, Karl. Can you create something out of nothing with nothing? Can you take a business that’s got no resources? It’s got no brand. That’s got no awareness. And can you do something with that? So it was more of a personal challenge for me on, and I was very, very fortunate to attract amazing team around me of people initially who believed, my vision. Because when you’re in entrepreneur, that’s probably the biggest things. Is convincing other people to believe in your vision more as much as you do. So I was able to attract and retain amazing people, and by 2017, we exited that business. We had grown that business 225 million and really changed the way consumer lending is done in Canada today. When we started, it was very much a fill out paper forms. Human people decide to credit. Fill out paper forms, hand in paper form, signed paper forms. And when we left, we ran that whole business. We did about $10 million a month via mobile device. Fully digital fully. You know, artificial, with algorithms that adjudicated the contract, signing the whole process of digital. And so that was around 17. And then it wasn’t long before I was approached by other people. What you gonna do next? What you gonna do now? And so I started hearing about this angel investing thing. As a word, I didn’t know what that was. And I got involved with Angels Vancouver Forum, which is an angel group out of Vancouver and Van Tech, which is out Vancouver started going to pitch meetings and seeing that and then other people I knew in the community were start getting startups going would come to me and say, Hey, you want to get involved? You wanted a lot of times in growth advisory and startup advisory, because you, you know, you kind of got the battle scars. You’ve been there and done that. So that’s kind of how that went we have plans to return to Toronto. Just waited for our youngest son to finish his middle school on so in 18 we made the jump and we moved back here. In the meantime, we’d also started another business, which is sell side M and advisory business with some other former colleagues. So my partner in that businesses in Vancouver and I’m out here in Toronto and we’re taking lower middle market, traditional businesses to market and selling effectively baby boomer controlled private companies to the private equity and strategic buyers. So, um, you know, I think I’ve got about two dozen organizations that I have been involved in or I’m involved in my track record. So It’s all kind of just — it’s not really work. It’s just, you know, I don’t know. Some people get up and their natural inclination to do a lot of physical sports activity. Other people — I’m just it’s just kind of who I am and what I do I am a deal junkie and you know, I need my fix.

Jeffery:
You kind of just moving pieces around and making sure that things were going here and moving here to get this started moving out. And I think that’s a great way to keep active and the angel world is very active. So there’s lots of deal flow and lots of things going on there, so that’s always great to participate in. But it’s also great when you could bring in a lot of that experience to help out a lot of these young entrepreneurs. First, I love the Netherlands. I’m a big fan. Been there a bunch of times. Something that really kind of jumped out to me and you mentioned it when you were at the beginning when you were talking about your business strength and where you took over this business and decided to jump in and risk all of it because really, the only option was either a fail or I win. If I win, I’m gonna look good, so why not try for it? But there was one thing that stood out and you mentioned in a different format a couple of times. But it was people aligning to your vision and to your mission, which I’m going to say they’re very similar. Maybe you could talk a little bit more about that because I think in the world of entrepreneurship, this seems to be something that doesn’t really get a lot of attention. And I think it also changes the culture of a business when those things are aligned. But it also I think, drives a lot of energy and spirit amongst the people in the business when they have a vision or when they have this mission that they’re going towards. And how do you help these startups actually get into that train of thought so that they can have a successful business because they have these things aligned?

Karl:
Well, I think I’ve had some great mentors who so a lot of this is from experience and from mentors teaching me. So firstly, I’m not the architect of the the first to come across this, but I’ve had some great mentors point this out to me. And what when, what investors look for a founding team. Why are we looking for a founding team? Well, you have to convince to other people besides yourself that this crazy idea might go, so there’s a validation going on but those two, those three individuals often also have a lot of shared chaired traits and values. And that’s the beginning of the culture. The culture is simply how we do things around here and often naturally, the there’s natural qualities where you have, where you have different where you’re different and where you overlap, and it still is different. It’s not recognizing the differences and where you have the shared purpose, shared circumstance, but also where you are different and seeing both of those of strength. And then ultimately, as you start to — now most companies initially you don’t it’s all about, you know, getting that product made, getting those first customers. And but the culture is happening. Whether you like it or not. Culture is like, the person that sees every problem is a challenge, or the person that sees every possible is an impossible task and and has a long list of why we can’t do that vs, uh, the end of in startups its’s all about find a way. The the division was we’re going to sell this, but the buyers came for that, so this way we’re selling this now. That’s that’s pivoting, right? What do people want to buy from you where they value from you? That’s part of the culture. Some people just they can’t be in that environment. They need to steady, steady. Eddie need to steady pace, needs, needs. The what the rules are often are enter rules. So if we got to get a proposal done, JP, we’re gonna do it Saturday we do Sunday, we’re gonna do it until it’s I’m going to get it done. We’re gonna and that’s what is part of that culture and your culture is happening whether you like it or not. But as you start to get a little bigger when the company doesn’t fit around the kitchen table anymore, when the company starts to need a whole house, right then you start to have leaders. You start to have some introspective time to go. Are there qualities or values that we need to intentionally foster? And we get to that too, because sometimes you’re lacking certain values in your culture and as leaders you need to be self aware, and then you start to to intentionally foster culture values that you may not inherently aren’t because it’s not all about the leaders personality or the two or three that there’s also differences that you may not possess and those you’ve gotta identify. You know, one of my company I was involved in, we were all very what you would define as very compliant values way were, you know, compliant nature’s sort of, uh, well, that you would define as very expert. And we and what experts do is they silo everything. You’re the manufacturing, you’re the development, you’re the marketing, you’re the sales and leave me alone. And I do my thing. What’s the weakness in that is collaboration experts don’t like because we just rely — I just rely on your expertise and you rely on mine, and we both just expect everybody to do the right thing, and most of the time we do. But sometimes we don’t. Right, so you need to foster collaboration.

Jeffery:
Is this a line into the — there solely is different methodologies on how you structure a team, especially early on. Like you said, you’ve got to three people that are starting this business. So is this really something that you gotta focus on over that. Pre-seed and seed round area where you’re looking at the skills you’re looking at the accomplishments, and it’s not that term like, uh, what is it? Higher. Fast. Fire No. One fire quickly. There’s some term. That is —

Karl:
You wanna, you wanna, you wanna hire…? You wanna hire slow, fire quick.

Jeffery:
That’s the one. So is that is that kind of a methodology that everybody should look at because it sounds like if you’re not, you’re building a culture, but it’s building itself. So if you don’t have the right people in that mix, your team is not gonna be a successful. You’re not gonna be able to stick to that vision or that mission. So should you be looking at these types of formulas that will help you move forward quickly.

Karl:
So yes and no. On early days, your business is like an infant. It needs a tremendous amount of attention, care and attention, and it’s just crying all the time for cash. If you wonder what the baby is doing, they’re just crying for cash. That’s your business. So you just got to nurture it. You got. But eventually it starts to become a child. It becomes an adolescent. And at that point, it starts to have a personality, and it starts to talk back. Right? And that’s where value imprinting. You’ve already done it as leaders, right. So if if you’re not authentic as an individual, people already know. Team already knows if your word isn’t what you promised, what you do, your actions don’t match your language. People already know, you know. Leadership demands always the most from the leader, right. And that’s why I talk about it’s lonely at the top. So I would I would say, you know, big, really self awareness. So that you don’t set expectations that you yourself can’t meet. Be authentic, be real. People know we were going to make mistakes, but if you built that, if you’ve got credibility, if you’ve been sincere throughout on, you can own up to your mistakes. People have a lot of time for sincere, honest individuals. Be forthright, own your mistakes. And getting because your business is going to have some you’re gonna hit. You have some bumps and bruises. But if you’re respectful and you’re always respectful. All those things get tested when you can’t make payroll, all those things get tested is when that big demo goes out terribly. All those things get tested in the early days of building that culture. And I’ve had the great fortune that sometimes when I meet people I’ve worked with, you know, years ago and you run into them and you just reminisce about the those member when we were doing this and it almost didn’t work and we thought for sure we lost it. But then it came through like these were just, you know, he’s a great war stories, and that comes because it had the good fortune to work with a lot of great people. And collaborate have some amazing colleagues along the way.

Jeffery:
And I knew the the comparison to that child personality and moving on to the youth and becoming an adult, your business, that way I think it is a good way for people to resonate that you know you’re going to start off and there’s a lot of crying there’s a lot of trying to figure out what we all do and what we’re trying to achieve. And as you start to grow, you start to learn with each other. The culture is growing, the vision starting toe come out and you’re starting to get that path and direction where you can all align and move forward. So then you’re getting into your strategies or crawl walk around and all those good things. But I think those make a really big difference in your business. For sure. Is when you start working with the startup companies and you’re looking at making an investment or kind of diving into these companies, is there something that stands out to you the most that you really want to foster inside of this business or something that you’re drawn to? Is it the product? Is that the team? Is that the financials? What is it that really has you driven into that business to want to help?

Karl:
Probably number one thing is “coachability” of the individuals. Was it Confucius? You know, the teacher can teach when the student is ready to learn. And that great — Or somebody has said to me, you know, if there’s room for your ideas and you find that quick enough if there is or not, because often people will give you lip service. But you see it quick enough. So, you know, coachability is probably the most valuable things. If I’m there to be in any kind of mentor role, if I’m not any kind of mentor role, well, then then it’s just purely clinical financial transaction. And we could go that way, too. As, long as you, you know, be careful what you ask for. Just that kind of investors is much more challenging to partner with because you as the founder, you set the terms, right?

Jeffery:
No, for sure. And you’re right. There is such a big indifference between an investor that’s coming in and building a relationship with you and growing within your business and helping you close a deal or helping you understand something a little bit differently versus pushing you, driving you to hit these numbers, driving you to move forwards. You got to kind of decide what’s going to be better for your business and at the time as well, because those were both warranted in any business. Getting the right push, reporting into somebody that’s gonna help you drive it if that’s on a board or whatever, that might be, one of the one of the things that the reason why we’re kind of talking about all this stuff is it’s all around shaping this business and are shaping the startup. And one of the things that I was doing an interview yesterday in the, uh Matt the gentleman I was interviewing, he said, You know, there’s no fast way to building a company. You build it in the same kind of sequence all the way through, and I think that that’s, ah, great way of looking at it because it is correct. There isn’t. You can’t just go from crawling to running at high speed and not have any road bumps or any any missed that occurs that are things that occur during that. But in that process where you’re trying to organize your business and really understand what you’re trying to achieve and where you’re trying to go. There’s one thing that always stands out, which is how do I make myself investable? And how do I get myself ready for where somebody sees value in my company? And then they start to go out and talk to angels. And one thing that I really liked about something that you had done, and I wanted to see how that transitioned into where you’re helping these companies look for funding was that you went and took a course to become board certified. So I’d love to learn a little bit more about that process because I think that’s actually quite clever because you’re learning this whole — a lot of people take these board seats, but I don’t think there’s a lot of knowledge of how they actually work or what’s the premise behind them and what value that actually comes back to the business and how you actually steer a company to be able to keep raising and keep going in the right direction and not fail. So maybe you can share a little bit about that and how it really helps in your drive of getting these companies further along in their business.

Karl:
I think what you’re referring to The Institute of Corporate Directors, which is a UFT, and Simon Fraser University, and Loretta Universities. So more and more in the public company space. Uh, they’re looking for expert directors, and so the ICD.D designation acknowledges that. It’s a year long program. So what is corporate governance and you’re taught what your role is a director is your fiduciary responsibility. Your duty of care on it really applies great to public companies and in the large board space. Um, everything you learn there, obviously, you know, anything you learn anywhere you can apply somewhere else sometimes, too. Typically with startups, I wouldn’t recommend taking board seats in startups. Often you’re taking more personal liability and then upside. But board advisory roles can accomplish — I can give the management team the benefit of that sage advice. And it can give advisors, mentors, a way that to be helpful without having to take potential liability that may come with being a director. And there’s, you know, with after Enron, the role of the directors substantially changed internal controls and the role of the audit function and segregation of duties substantially changed. And, it’s become a lot more riskier to become a corporate director so as part of our exit or our transition strategy in our life was happening. I thought this would this would become an area of my life. So that’s why I think in 15 or 16, that’s when I when I took that program. It allows you to have those kinds of conversations that at an early stage, but it’s not usually a big part of the startup. The big part in the start up world is customer validation. Finding cash and customer validation? I have looked at so many decks. If you’re sending a deck to me before you tell me the problem, I want to know if you got traction, like if you got traction that tells me somebody wants to buy what you’re selling. To me that so many decks you get there is no traction, and I’m talking not fake traction. Real traction, right? People are giving up their hard earned money to you. Right? Often I find what makes companies less investable. Really the best way to position your company to be investible is raising capital from customers through a thing called sales. There’s no you give up no equity, uh, and delight your customers and to the point that they’re willing to pay for the problem you solve for them. Um, and you are the best. You do that enough times. Investors will come looking for you. And I mean it’s hard. So some people say, oh, it’s gonna be easier to go to investors and customers.

Jeffery:
100% correct on that. I’m a big fan of the male perspective that, you know, with with sales on valid creates validation with validation, creates interest, and then that kind of will stem and move forward from there and anything that again, the same forum that we work with its if you build something that’s great. People will chase you to give you money. Might take you some time to get there, so you’re gonna have to kind of feed it through the system. But eventually people will want to get on board because they see the value created a validation. And what I loved about what you’re saying on that corporate governance side is that there is a point in time where companies also need that governance. And they need that help, myself, not as I don’t take very many board seats at all, but recently have because we’ve had some companies that have really escalated in growth. And they put that together just for the same reason that you talked about which is governance and being able to ensure that they’re moving down that path on. But I think having that knowledge and understanding of how governance can work inside of a fintech or inside of a business that is fast moving at the time is really beneficial because they’ve got the validation. But they’re moving at a very quick space. And I think sometimes, we tend to want to know everything but long and behold, there are areas of expertise that we may not carry. And those things do have to come into a business to kind of validated even further and help on that growth side, especially if you’re going for a larger investment. So I can see how that, um, education and knowledge that you’ve garnered would carry very well as these companies that you work with mature and and start to go bigger and need that kind of governance and support. There was a few other things that you mentioned earlier on and through some of the of the material that I’ve read and watched that you’ve done. And you’ve highlighted this a few times, which I think is, um, it seems to be part of your kind of your mantra, which is coaching and advising and mentoring. Can you talk a little bit of more about how and why I’m or investors should look at this as being part of their drive to help companies?

Karl:
I started doing it in the eighties. Again, child of immigrants in the 1980s, the early young adult and at that point, there was a tremendous amount of people from South America and from Southeast Asia migrating to Canada. And I was able to get involved in the Immigrant Services Society and helped place a lot of newcomers to Canada, which really was was for me giving back when we came to Canada. Friends, neighbors, people at church help our family out with little known that we when we came reasonably, we weren’t refugees. But little things like, you know, how to open a bank account, how to enroll your kids in school and, you know, everything is different in new country, all those kind of stuff. That’s where I kind of started in that role and then in my business career, again, getting in the leadership roles early on in my life. That is really the most valuable thing that your team and people managing people in first time management of people positions are looking for us of coaching and mentoring. You’re already technically competent. You’ve proven that what you now need help with is the people side of the business and that’s often that really is the role is, uh is to help them become more effective leaders on become more successful and their teams become more successful. So it’s been again — it just comes in scaling your business as you get multiple teams and leaders to each team, and each of those leaders needs to be aligned. And if you get leaders of leaders, that’s another a complete level of complexity where that’s a whole new challenge for an individual. How do I initially, how do I get results as an individual, then how do I get results through within through people? Then how do I get results within through people who are in themselves having to get results within through people? Like this is a lot of fun to see people excel at that.

Jeffery:
How does someone go about finding a mentor like even like yourself? They look for like, minded skills? They look for opposite skills like I’m a marketer, but I don’t know text, so I should find a tech mentor like, How did someone really go about finding a fit so that they can learn? Is it offsetting skills, or is it to enhance the skill you have?

Karl:
It all depends on what your purpose is. What your goal is as an individual looking for a mentor. I’m pretty up front about I advertised it. I’ve been doing it. I mean, I’ve been active through the university campuses, mentoring MBA students, entrepreneur programs when we’re out west. I’ve done some activity here with University Toronto. Now through the angel community through, I think it’s called TRIEC and Toronto Toronto Regional Immigrant Group. I’m on linked in to me — the one thing that no one will ever say that they’ve reached out to me from entering that they didn’t get, they were never ghosted. It’s just if I can’t help you, maybe I could help send you to someone who can or introduce you somewhere.

Jeffery:
Which is a good way to kind of help everybody move them in the right position, right? You can’t mentor everybody, but you can find a good fit.

Karl:
I think of way talk about, you know, revitalizing the economy after this recent economic downturn we’ve experienced this year and it starts it’s not just financial capital, and that’s what’s the reason. What’s the name of my of our holding companies, Cerebral Capital. We think that’s the most valuable capital because that’s really the capital everybody starts out with. We all start out with this some amount of cerebral capital. And how do we grow that? We grow that through learning, self learning, education, awareness on that’s what the — In 02’ when we formed that business steps. Yeah, we thought, what do we really start with when we showed up? You know, we had some privilege to the family we’re born into. However, at some point in your life, it’s your wits. It’s your smarts. It’s your business savvy. There’s some people have given tremendous amount of opportunity, but they’re completely unprepared, and its opportunity wasted. And other people are extremely prepared, and when they meet opportunity, it’s just magnified, right? So…

Jeffery:
it almost sounds like there’s a good opportunity for most people to really be able to give back by offering mentoring and coaching based on the experience they’ve had, and it can be very specific just to marketing or just operations. But there’s a lot that they could give back if they just took a few minutes to figure out how can I actually give a hand to an early stage company? Or how can I help guide? Somebody threw a problem that they’re having because I may have faced it, or I just rather enjoy listening to these problems and seeing if I can offer some guidance through through that process.

Karl:
Yeah. And I found my whole life approaching people older than me because now I’m a person of a certain age. That everybody is willing to — if you ask, people are willing to give you their opinion. And the nice thing about medicine, it doesn’t always taste good, but it’s often good for you. Don’t worry about the vessel in which the advice comes. Take the medicine. Sometimes there’s not a fit between you and the mentor, but that’s okay. There’s others, but there’s always something to be learned.

Jeffery:
Agreed. Yeah. I found that if you sometimes that we have a tough time listening and I realized that listening. It’s this piece where everybody thinks that you’re supposed to just sit back and listen to everybody talk or just take everything in, which again you should. It’s great to listen. But I think sometimes we forget what we’re trying to listen for. And there’s a lot of signs or signals that come through conversation. Come through one on one through mentoring. And I think sometimes we listen and maybe we might hear it twice, and we think we should action it. And I think, a lot of times people don’t go with their guts or they don’t listen to those second times it brought up or maybe it’s even once it was brought up and I find that you know it can open your mind. Example I had was walking through our fund at Whole Foods about a year ago, not just in January, and there was a nation gentlemen sitting beside us and he was listening to the pitch the whole time, and he at the end. When the gentleman left, he came up to me and he said, So you’re selling this or doing this or doing that? And I was like, Oh, yeah, hey, nice to meet you and even right on telling me everything. And then at the end of the conversation, after he regurgitated everything that I had said for about three minutes, he said, You want a car? It’s like, Yeah, we got a car! And I was like, What? Because I didn’t know who this guy was. I was afraid to kind of share it, but he was like your house, invest in stock and he was just grilling me. And he goes, if I’m gonna buy into you, you need to tell that guy That’s what you didn’t tell him. You need to tell him everything that you have, and that’s what’s gonna go because I’m not investing in anybody that doesn’t have all those things on. I said, All right, no, that’s fair enough. And I went, I drove home. It was a little on and on about that, but I drove home and I thought about it and I said, You know, that was some really good advice because when you’re talking about something, you maybe are selling yourself the way that you need to, and sometimes you got to share a little bit to give a little bit and etcetera take a little. So I think sometimes in coaching and mentoring, we kind of do the lip service of it. But I think you really gotta listen to the underlying words of what’s being shared. It doesn’t matter where they’re coming from, like you mentioned different vessels or different ways to achieve it. But sometimes there’s some hidden messages that you kinda gotta look at because everybody brings a little bit of value. If you’re open minded to hearing it.

Karl:
That’s the introspective side of the leader. One of my mentors, whenever he would come to me with his good advice, I’d argue with him till, like eventually he was like, okay, I gotta go home now. And disagree with him and argue and disagree. And then he finally said to me, the differences is you will argue your position so long that people finally give up. And he goes but the next day you’ve thought about everything, and then he said, and then you would come into me the next day and go okay, I will do it your way. But at that time you get caught up in the battle, and part of you know, being entrepreneurs, being passionate about what you believe in, then that means you gotta hold on to it. And it’s not going to see a customer and they don’t get the value of your product. You’re going to keep on convincing them until you’re convinced them, right, Because that’s your role. However, he said, you know, you just you would never drop. You would never drop it. You would never let it go, he goes. But then the next morning, I could tell you thought about it all night because then you come in and go. Yeah, OK, you’re right. I was wrong about this. And that’s you know what have you — so I’ve had a lot of very patient mentors with me.

Jeffery:
it helps you learn and grow right. And just think that I’m sure that the next time that that occurred in that customer said I’m not interested. You stopped and asked the question. What am I missing here? How can I help you? And maybe that’s where you got that learning. And that helps you get that customer more in tuned with you and you became you built a relationship from it. So I think, like anything, it takes time learning. And, hey, we’re not we’re not gonna catch everything the first time, but they won’t get by me the second time because we’re gonna be quick enough to catch it, right?

Karl:
I know a lot of companies are looking for money. But often, the free ideas that a good advisory board can give you or the introductions they could make or the network they can open you up to is more valuable than the investment that you may get from them right. Like $100,000 of equity it is, or the introduction to the multimillion dollar customer. Right, Which is more valuable? Well, we all know which is more valuable, but we forget that often in our because you get, you know, we get myopic right where I’m the CEO and in the capital raising that’s my job. If the right advisors can position help, you position your company with with with beta customers or trial customers open up. You know, it’s taken those mentors decades to develop those networks and that reputation and when they’re willing to introduce you the social proof that they bring, Um, it’s like, you know, you’ve taken you compressed sale cycles for people, right? Or on supplier negotiations. Um, you know, they can introduce you to the often suppliers. You’re dealing with somebody. But you don’t know that this individual is actually a middleman. And somebody in your network who’s got 10, 20, 30 years of having done this Well, yeah, okay. But I actually know the source over here, we go straight to the source and improve your cost structure. So just right — or attracting talent. The mentor in his Rolodex. Rolodexes, like, uh, the old version of LinkedIn has that network taken? Help you round out your founding team? And again, they’re vetted. There’s no one’s going to bring forward somebody who they wouldn’t feel highly confident working with themselves. So there’s a tremendous amount of value in, I think, the angel investor community that is often not tapped by early stage startups. That is often, I think, much more valuable than in the money that they’re up to raise

Jeffery:
100% wholeheartedly agree with that. I believe that there’s a lot of knowledge, and if you don’t ask questions, you’re not gonna find it. And I think if the message is here, that we get to share after day today to the to the startup is ask questions. Like learn to open up, share, find the right people to bounce ideas off, test people, throw something at them and see what comes back. Build some loyalties. But find some experience that’s gonna help you build forward. So I think we’ve We’ve gone through this nice, great journey from kind of where you’ve come from and sharing ways toe work inside a business building passion, building a mission, having visions, getting coaching. I think there’s a huge amount of value there that you guys are and yourself and your business are really bringing into those start ups and getting them ready for investment. So I think the environment and ecosystem are obviously thanking you for that and taking all those years of experience that you’ve brought in. So we’re gonna kind of transition now into our rapid fire questions. So we have a few of those, and then we’ve got maybe two or three quick questions that we’re gonna ask, but we’re almost there. But so far it’s been awesome. So rapid fire. First question. What is your favorite part of investing?

Karl:
It’s the potential. Seeing what could be the potential of the seed of something new right? That the possibility. That and the positive customer outcomes that we might achieve through this venture.

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

Karl:
It’s not a specific number, since 02′ we’ve been involved in about 24 sometimes more, sometimes less. But there’s no it’s not really about. We must do ah X number this year.

Jeffery:
there’s no quota, which is good.

Karl:
Yeah. No, I got on one boss. We’re more concerned about really not the number of companies, but it’s really about impact, finding impactful opportunities where we can add value.

Jeffery:
I like it. Impact and value. Um, is there a vertical that you like to focus on or set of verticals?

Karl:
So, yeah, my whole career has been in the application of technology to the to the financial sector. So financial innovation in what’s now, I guess nowadays, this is all called now it’s called Fintech or Credit Tech or Rag Tech or Insure Tech. But all of that was simply the application of digital technologies to tradition, all financial processes. That’s whereI’ve got deep domain expertise.

Jeffery:
Perfect. Any due diligence requirements that you tryto make sure that you make in before you make any investment?

Karl:
Nothing that isn’t really that that isn’t really best practice for any other investor. Nothing. We’re neutral

Jeffery:
Timelines for investment.

Karl:
Buy and hold. Really, for a long as we can get enterprise value to grow. And as long as we see continued growth and as long as that growth continues to be at a return on capital, that is better than we could get elsewhere. Because what’s the point? I mean, it’s like the stock market. Why sell that stock if you’ve got nowhere? Where else to put it? So it’s kind of a bit of a bit of a Warren Buffett strategy applied to what we do. Not that we’re anywhere near that level, but yeah,

Jeffery:
I like it. It’s good. Do you guys lead rounds?

Karl:
We have, but not always.

Jeffery:
Any preferred terms? Pref shares, common, safes?

Karl:
Convertible, Pref shares, or common. Really, It’s about alignment with the founders. Whatever aligns best with the founders and in in the opportunity.

Jeffery:
Okay, do you do follow on investments or take board seats?

Karl:
We have. Yes, we do. And yes, we have. But not always. Every situation is is is independent of other each other, each each each previous situation.

Jeffery:
Okay, any notable companies that you want to share that you’re really excited about,

Karl:
Um well, I think I’m pretty proud of what ah lot of the companies were involved and have done since March. Um, the pivoting on in some ways, it’s really helped him get clarity around their value proposition and what their noble purposes. And because there we just had some great news today. One of our companies a video link. I I just got the email, but they have think if you think about blogged, bloggers, you write your article and you share it video link. You create your video and you can. We could put today’s video out on 25 different video platforms at the same time. And it’s being used by broadcasters and is used by, for example, the religious community is using it for their members who can attempt. They can’t go to church, temple or mosque. And it’s being used for for by the political community government that’s being used by all sorts of forms is government where people can access government, whether it’s city government or federal government video link. They were used in the recent events in the US during the US election. We I think we got 22,000 participants on a stream, including the the current, I guess what you call him, Donald Trump was on and fighting for his position, and all the lawyers were on this platforms. I just got the email from them. We’re really excited. It’s really made like, you know, the the celebrity, the acting and entertainment industry is really shut down. These tools allow, uh, musicians to broadcast from home if you’ve got a cell phone you can using our app. You can broadcast up to 25 platforms at once so you can grow your home audience very excited about that. One of the other companies is a company actually out that we have a development shop in Pakistan as well. And they are offering their restaurant app so it allows any independent restaurant toe have all the power of a big chain and their app’s three. It’s been free since COVID time. Really trying to grow their base. They’re validating their business and their model, but they’re also being very responsible about it on there being very what I would say quote unquote Canadian about it. They’re very charitable about it, they’re not, you know? Yes, they’re getting product validation, but, uh, they’re not being, ah, taking advantage. They’re taking advantage to get product validation. They’re not taking advantage, too. So if you’re in a restaurant business and you can’t make ends meet right now because the intermediaries take most of the fees this allows you to be completely independent. You can have your menu. You have your website. Have your deliveries. Have your pick up and all of that from an app for free. So excited about that. So that video link is the one I talked about. The other one is Unmile. If you go to our site on the portfolio page. We got links to all of them. Another company on the new Westminster. A father and son duo have completely digitized supply chain so traditionally supply chain physical supply chain was a hassle. Emails, in person meetings, samples, shipping back and forth. They’ve completely digitized this. So it’s a total quality management system. It connects every — it’s reputation management. So, in your, you know, a lot of companies in if you’re industrial designer and engineer, who you can upload your drawings and you can completely see every manufacturer in the process. It’s ISO certified process, but also from a reputation man, you don’t want to find out the child labor was used or in some way in the manufacture of your process. It makes the whole thing more efficient, transparent. I’m more costly and you know — so there’s a number of these tools that have really — You could see it like an e commerce, right? E commerce went from, what, 20% market penetration in February 2 almost 40% penetration six months later. I think a lot of startups with digital solutions, um, have had accelerated growth because they were able to the need was at more than ever for for what they provided. Uh, and, you know, the platform are using today is probably the best example of that, right? Everybody used video chat, Everybody had video platforms, but I mean, been around for more than a decade. Um, but Zoom just gave a better user experience at a time when, you know, it couldn’t have been better. And it’s become a verb.

Jeffery:
That is so true. That is so true. But those air, they sound like three great companies and looking forward to learning more about them. The last question that we’ll dive into just quickly is in all the experience you’ve had and all the things that you’ve been doing in the startup world, is there a heartfelt story of a startup that just blew your mind away that they went from almost failure to just taken off or something that just really caught your attention that you really thought, man, these guys really made a great job or she was fantastic. And how she overcame this barrier, anything like that that stands out. The community loves these little stories. War stories that are just really give you that juice to keep going.

Karl:
Yeah. So this is a husband and wife team. I met them in 2017 in Vancouver on Commercial Drive in a coffee shop, and they had this grand vision for their business. They were both thought I would say new way, way, way more about coffee than I ever thought you could know about coffee.They really wanted to change that industry. They would travel to Colombia, buy the coffee direct from the farmer, which has all sorts of positive consequences on farming in Colombia because there’s a competitive forces there where there’s other things you could be growing that could make a lot more money for your family. But maybe not so good for society. And so they import the coffee. They started roasting the coffee. And again, initially, they got some bandwidth and somebody else’s facility, um, they were delivering. Their product was delivered. It was It was a unique coffee. It’s one all kinds of awards, and they were delivering it through the boutique cafes across the world. But, you know, it was it was a start up on bond. You know, week to week cash, you know? But we really paid attention. Our cash. And we had this fledging little direct to consumer following happening. March hits. And they’re just good people. Some of the cafes returned to coffee and asked for refunds. And before they checked with me, they gave him refunds. I don’t. I’m not at all an owner in this business. This is a company I work with through a futurepreneurs. Cash can be tightened. You put your but I mean, that’s just good people that they are, July and they might move to subscription model so you can now have the coffee direct to your home July. They booked $60,000. Awesome from you. You know, you take the and you take the and it’s annual reoccurring you take. That’s a monthly recurring revenues screen. So they have their own vehicles now. They have their own plant. They have their own roasting equipment. All of that off bootstrap. So it isn’t always, um, software and hardware. So go to Hello Luna Coffee. If And it go to their website, it’s just a cool. It’s just a cute little thing. It’s just It just makes you feel good when you go to the website. Great people deal with, very personable. They have an instagram account. And if have, you know, subscription coffee. You know why not? You have subscription in wine. You have subscription dollar shave club. You’ve got all kinds of other subscriptions. You know, and you’re doing something good for for the independent farmers in South America.

Jeffery:
Agreed? No, I love the process. I love how they did that. And I like the hustle. I like all the things you’ve done. That sounds amazing. So a great story. So now we’re gonna get into something real quick, which is personal. And I learned this through podcast, the company that we’re working with, and I thought, You know what? These podcasts are great. They’re super business. See, I’m learning lots, the environment starting lots. But I got to get something that makes us a little bit more personal. So the first one, which is I’m taken back from the beginning, which was the one thing about you that nobody would know. So we’ll jump on that one, and then I’ll go through the next three.

Karl:
You know, I wish I I’ve been trying to think about that since I knew that question was coming. And I honestly have a hard time actually answering it because I’m — My wife says you’re too much of a sharer. I have a hard time, uh, coming up with something that that wouldn’t have shared with someone already. I’m not ah, not good at keeping secrets about myself.

Jeffery:
All right, well, that’s all right. Well, then we can one of the next one that you got out there. I like doing it because I created as a unique identifier that way cause I don’t remember names very well. And I always remember details and facts. So its numbers And I’m sure I’m not gonna call you investor number 65 so that doesn’t work. So I have to come up with something else that identifies

Karl:
I get it.

Jeffery:
And I do the same thing with students because I won’t remember his name. But I always remember the kid that told me that he’s Chinese. He looks like he’s Vietnamese, but he’s actually Chinese. So I remember that kid forever because that was quite clever and funny. So, the next question is, what’s your favorite sports team?

Karl:
It’s my son’s. U16 soccer team.

Jeffery:
I like it

Karl:
Here in (inaudible)

Jeffery:
all right.

Karl:
This this whole season they’ve been they have been able to play, but they’ve been practicing. When it was winter out, they were been practicing in the summer. They are ready for anybody, but, you know, just waiting for for a game. But I love the energy and love the enthusiasm love the the purity and the innocence of the boys and just the — they’re all, you know, they usually at this age, they lot of a lot of, you know, the soccer really kind of reduces. And there’s less and less players and, you know, coming a teenager. And you know, I got other interests, and so that’s obviously the best players and the really good players. And they got a great coach and great manager so that that’s my favorite sports team.

Jeffery:
I love it. I actually, four years ago I went and got re certified as a coach, and I did coach the Uboys 16 soccer team for two years and a fantastic experience. It was the bad news Bears like the team wasn’t the most equipped best players. But by the end of the year, man, were we singing, winning games and everything. So it’s a lot of fun. So I totally hear where you’re coming from.

Karl:
I’ve been going every single practice, sitting there while sitting there, whatever in my car, because you don’t have to go out to the practice. Uh, yeah, we’ve had no games, just, you know, they’re ready. They’re ready. They’re trained up. They’re ready. They’re waiting.

Jeffery:
Yeah. Sounds like it. Yeah, and, uh, spend all your time one damn game. I hear you.

Karl:
Yeah. Yeah.

Jeffery:
Okay, so the next question is two parts. What’s your favorite movie? And what character would you play in the movie?

Karl:
Probably would say the the the first Godfather movie.

Jeffery:
Oh,

Karl:
The first one. I found the because I found the character of Michael Corleone. in that first movie, he wasn’t a bad guy, he was just a dutiful son. They had a very different plan. He had a very different plan, and they had a very different plan for him. But things changed in the family business, so to speak on, uh, he made a very different, you know, pivot in his life. I found that that sense of duty and the stoicism of that character, I found that very appealing.

Jeffery:
Yeah, I like that. I’m actually

Karl:
something something that I’m I’m not sure if I don’t think I’d be up for that.

Jeffery:
But I know. But you know what? I’ve been throwing these in, and I want him getting a lot of great movies from like the fifties and just movies I never would have thought. And then the reference point, which I really like is that when you deep dive into it, you can see that the similarities of the character and the person you’re talking with, how much they actually resonate, like the calmness, the articulation, the way that you strategized and it really does work. My favorite one was gentlemen of the U. S. He just was like he was on Star Wars. Yoda I was like, That’s amazing. I thought I thought you’d be more of a and I thought, Man like your Orlando, Like my head just went to Lando right away. And he’s like, Nope, Yoda. And I was like, I could see that. Yep, super calm thinking about it. But he was so much energy. So I was like, Lando’s got more energy than Yoda, but I just thought it was great. So it’s been a really fun question, So I got a few movies that I’ve got a line up now I’ve got a series of Godfather movies I’m gonna have to watch, so…

Karl:
but it’s the first one, the original one. Whenever they do a two and a three of anything, you can tell the writer never planned that. Right?

Jeffery:
That’s true. But you still gotta watch him, so yeah. Got to go through them all. Well, Karl, it has been a pleasure. It’s been awesome to learn about everything that you’ve talked about. I got lots of notes. I’m no junkie, so I like to write down all the quotes and lines and everything. That was great half the time. You can’t read it because I’m trying to write us fast. They can well, concentrating on what we’re talking about. But again, I appreciate, uh, you sharing and everything that you’ve brought to the table here. It’s been phenomenal. And the way we like to end our show is that I want to leave you with the last word. So anything you want to share to the entrepreneur world or anything you want to share to investors, I turn it over to you and leave you with that last word.

Karl:
I’ve been hearing a lot that, uh, people are putting off their start ups because of the world event. There is not a better time on the planet to start a business, than now. Look at all the great companies that came out of 08, 09. Look at all the great companies that came out of 2000 and 2001, the most valuable company on the planet today was worth $2.5 million in 1995 right? Ah, when they were public. When the NASDAQ crashed in 2000 and thought, you know, on So you know it. Don’t put off what you’re doing. The angel investing community, the startup community is alive and well. There is more capital available now than ever. And you just need to, you know, get your get ready toe, be able to articulate the value prop, and there are more business is willing to buy solutions problems that in the past they may not have gotten around to because this environment has created an urgency to solve those problems. We’ve seen some great companies over the summer, Um, everything from better ways to build ventilators. How to identify people who may have symptoms on. And, you know, every one of these. This is the time. This is the should be the catalyst to start. Don’t delay. If you’ve got solutions, people want to hear them. People want toe support him. Customers want to pay for them. So, you know, don’t put it off any longer. If you’re waiting for a sign to start your company, Jeff and I are giving you that sign right now.

Jeffery:
I love it. Yes, the green light is on. Go for it. Don’t hold back. Brilliant.

Karl:
Absolutely.

Jeffery:
Well, I love it. Thank you very much. Again, Karl. Brilliant. Enjoyed the conversation. Hope we get to do it again.

Karl:
A lot of fun, looking forward to it.

Jeffery:
All right. That was fantastic. Karl was always great. Fantastic. I love the idea of how we went through for the board of Certifications. I really loved that. We really talked heavily about the whole concept of how the business functions and operates and how you build that culture. Build that vision, get a mission, drive it. Everybody comes together on git starts right at the beginning. Something small and work your way up, great background with his parents coming in from the Netherlands, being entrepreneurs, him going out, attack in the world and then coming back and doing the same thing and going after the entrepreneurial side. Great investor does a lot of great things in the community. It’s been a pleasure working with him, so check it out. Anything we can help with. Thanks. Karl enjoyed the the interview.

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