MBA, Allied Venture Partners | Entrepreneur turned Angel Investor
Matthew Wilson, MBA | MBA, Allied Venture Partners | Entrepreneur turned Angel Investor

"Start building the brand from day one"

- Matthew Wilson

Matthew Wilson on his how he found himself in the world of CPG and Angel Investing

Talk Takeaways

Matthew Wilson, Founder and Managing Director of Allied Venture Partners, sat down with (JP) Jeffery Potvin to talk about the CPG industry in Calgary, his vast experience in the industry, and how this has led him to successfully co-found, scale, and exit a CPG startup. He talks about the importance of branding, establishing a solid customer base, and the significance of feedback in creating a good product.

Mathew then shares how he started in angel investing, his passion for it, his investment process, and how he works with the companies he invests in.

About

I love meeting founders who share my enthusiasm for technology and innovation.

My passion for entrepreneurship began with my first business at age 11 while my teenage years were spent learning HTML and designing websites.
In my 20s, I worked sales & marketing roles at Nestle and Coca-Cola, ranked Top-3 with weekly B2B sales of $3M-$5M. This experience led me to co-found, scale & exit a successful CPG startup.

Moving to Calgary in 2013, I worked at a large media agency, winning numerous sales awards and growing my client portfolio to a $1M+ run rate in just 18-months; while also fundraising from donors & sponsors for various events, including the annual Top 40 Under 40.

In 2016, I began management consulting, coaching & mentoring startups on marketing, social media, product development, market research, recruitment & fundraising.

At one startup, as interim CMO, I helped grow MAUs to 600,000+ in just 12-months. At another, I helped hire & develop a sales team, achieving a $4M run rate.

A life-long learner, I completed my MBA in Organizational Leadership, graduating at the top of my class.

In athletics, I’ve performed at the Professional & National Championship levels (hockey).

Most recently, in October 2020, I founded Allied Venture Partners (allied.vc) after being a private angel investor since 2012. Allied has since grown to more than 800 investors globally and we’ve deployed over $1 Million into early-stage startups.

As a passion project, I’m the co-founder of Calgary Beer Week. We’ve raised over $500k for charity, hosted 30,000+ attendees at various events, and operate the largest craft beer B2C membership program in Western Canada.

As a trained speaker, I’ve represented our brand with local and national media, including CTV News, GlobalTV, CBC & Sportsnet.

𝐒𝐏𝐄𝐂𝐈𝐀𝐋𝐓𝐈𝐄𝐒
– Leadership, mentoring, entrepreneurship
– Marketing, communications, branding & events
– Growth & customer acquisition
– Venture capital, angel investing, fundraising & startups (80+ investments, 6 exits)

The full #OPNAskAnAngel talk

Jeffery: Welcome to the Supporters Fund Ask An Angel. I’m your host, Jeffery Potvin, and let’s welcome our investor today, Matthew Wilson.
Matthew: Thank you very much for having me. It’s a pleasure to be here.
Jeffery: We’re very excited to have you today. We’ve been changing up the format a little bit after going through so much material on yourself which is great. I wanted to start off with a couple of quick hard-hitting personal questions before we dive into the meat and potatoes. Book or Movie?
Matthew: Book.
Jeffery: Superman or Batman?
Matthew: Superman
Jeffery: Pizza Pie or Ice Cream Bar?
Matthew: Pizza Pie. ‘
Jeffery: Five minutes with Bezos or Oprah?
Matthew: Oprah.
Jeffery: I like Oprah too. I think she’d be way better. Yankees or Blue Jays?
Matthew: Blue Jays.
Jeffery: Bike or Rollerblades?
Matthew: Bike.
Jeffery: Big Mac or Chicken McNuggets?
Matthew: Big Mac.
Jeffery: Trophy or Money?
Matthew: Money.
Jeffery: Done. Alright. Those were some really good rapid-fire questions. That was the first time. I’m going to have to keep coming up with better ones. How did you feel? How did it work out? no
Matthew: That was some good ones there. I think Oprah too would be way more interesting. She’s overcome a lot more and basically comes from nothing. Whereas Bezos had a little bit of a boost being a white male It’s super interesting just to learn about the empire she’s built.
Jeffery: Agreed. Incredible. Well, if you come up with any other questions that you think might fit, let me know because I’ll add them in but I kind of like this rapid fire. I have more. We’re going to do more later on. This could just be a rapid-fire session. We won’t even need to talk about anything, just rapid-fire stuff. But either way, glad to have you here today, Matt. So first let’s start off by giving a little bit about your background, where you came from the CPG world all the way up to where you are today and then one thing about you that nobody would know.
Matthew: I got my start in the CPG world, moved to Toronto, spent my 20s about 10 years in Toronto, started working various sales and marketing roles at Nestle in Coca-Cola and then that ultimately led to my former business partner. I was spinning out a cpg startup so we grew and we scaled that for several years in the GTA and then in 2012 we had an opportunity to sell and exit the business. So, obviously that was a great decision at the time. And then also in about 2011 – 2012, my now wife, had received a great job opportunity out in Calgary so we figured, ‘hey let’s do it, pack the car, put my skis on the roof and we went and got to Calgary. I was essentially looking for a way to stay connected to the startup ecosystem. I’d always had a passion for finance and investing and obviously a passion for entrepreneurship, so I discovered angel investing and you know because there wasn’t a lot of VC activity at the time in Calgary, it was mostly just oil and gas and cowboys. I decided to look outside of the market and focus on more established VC centers like Silicon Valley, Vancouver, New York, Toronto and just joined every angel syndicate. I joined a couple of VC funds, basically started from scratch, writing small checks and learning by doing. Throughout the years, as I got more and more experienced, I started offering to scout for a couple different VCs and syndicate leads whether that was just meeting with founders, writing deal memos and the one thing I noticed about GPs is, they’ll always answer your emails or phone calls if you’re an LP of theirs. It worked out great because I had access to these really smart investors and then about five years ago, I was talking to someone in my network and I said, ‘Hey I’m looking to get more formally into the VC industry. How can I do that? And he said, ‘Well, if you want to get a career at VC, you need two things. You need an exit and you need an MBA. So, because I had already the experience with my cpg startup, I decided to go back to business school, got my MBA and then it was actually the thesis project for my MBA where I built out the business model and the plan for what I’m running now which is allied venture partners. So, we launched that last year, and what better time than the midst of a global pandemic. It’s been going fantastic. We just wrapped up our fifth deal of the year and we’ve put almost a million dollars to work so far. They said that the two things he needed was getting this MBA done and selling a company.
Jeffery: Sounds like sound advice though.
Matthew: That’s what everyone kept telling me. Going to business school had always been something that was on my mind, but then again in my 20s, my interpretation was a fancy MBA for I can learn a lot more by going out building a company and investing in companies. For the longest time, that was my mentality but you know there was always something. I felt like there was some kind of knowledge missing. I figured going back and getting my MBA would fill in those knowledge gaps and just give me the extra confidence and credibility I needed if I really wanted to take that leap forward into VC.
Jeffery: Very smart. Totally agree with that and if we go back to your CPG days and I’m a huge CPG fan just because we also invest. I’ve invested in multiple companies but I just like the space. I think that it’s uh not only is it under service it’s misunderstood. I think there’s a lot of startups that have gone through the CPG space today. There’s so many that are being built around coming out so when you go to the grocery store, it’s not the same 10 staple products they’ve opened up. So many more avenues, grocery stores are bigger, there’s more content obviously, there’s online. So when you guys first started in this space back in even 2000 between 2005, 2012 when you ended up exiting out how much of that world changed and were you kind of learning as it was changing and did you already start planning on the fact that you wanted to start investing what kind of got you into the investment world? How much of it was based on what was changing in the environment you were with regards to investing?
Matthew: My grandmother actually introduced me to investing at age 15. It was always something that I had a passion for and then when I started building that cpg company and really becoming a founder and an entrepreneur, I started to realize, “hey listen, I can invest in other people like me and other entrepreneurs.’ At the time in Toronto, our cpg company was a coffee wholesaler. We didn’t want to get into the retail game because at the time there was really only Starbucks, Tim Horton’s and some second cups. It was really before the whole fair-trade organic thing really took off. So instead of getting into the retail game, which was really cost intensive and hard to do, lots of competition we just stayed with wholesale and we serviced hotels, bars, restaurants, cafes and bakeries across the GTA. It was fantastic. I remember we looked at getting into retail one time and just to get one SKU and a Loblaw’s on the bottom shelf with maybe 10 stores across the GTA. It was 250,000 and I was just like, ‘this is absolutely nuts.’ It is so hard to get in and compete in the major retail grocery store space so we just avoided that all together and obviously brick and mortar like setting up a coffee shop that’s just got a whole additional set of overhead and so we just stuck to the wholesale model but it seems like it’s come a long way now because if you want to start a cpg company there’s a lot more avenues like you can go direct to consumer. you can set up a Shopify site. You know ecommerce is much bigger and it’s a lot easier to do on the web now. With regards to doing cpg with beverage, that can still be really challenging because it’s very heavy and it costs a lot to ship but, I mean if you’re doing something else like whether it’s protein bars or something like that, and it’s a lot easier to ship and it’s a smaller package size. It’s so much easier to start a cpg company nowadays and get in front of your customers without having to go through those traditional major retail routes and those major retail routes that you’re speaking of. They were, at the time, certainly pretty costly because it was self-protecting and ensuring that the big brands stayed on the shelf and they didn’t have to spread their wings too much. But now that planograms and everything have shifted towards what’s selling, they’re now adapting to the consumer they want to get. The consumer in the store realizes that there’s more than one player in town and that player is the internet.
Jeffery: So they’ve started to change that whole pricing model so that it is more competitive. As that market has shifted and as all of its shifting investing, everything is starting to globally change, do you feel that when you were stuck in that mode that became a problem that you wanted to solve too that you kind of said how can this be? How can I change the way my business model is working? sounds like you just avoided it in total because you’re just not worth my money so you went after the bigger fish but how do you educate some of the cpg brands and other companies you talk to now? Are you telling them to go after this because there still are fees? they just might not be as high as they used to be but they still are part of that model. Are you driving them into space and saying you need to be everywhere or do you pick a vertical and really own it and then kind of expand your wings from there?
Matthew: I would tell companies it’s more important to build that die-hard customer base and you can do that pretty much online through email, social media and then direct to consumers. So what I like to see in some of the best performing cpg companies in my opinion are the ones who really started with that diehard fan base. they’re shipping directly to customers and then it’s almost like the major retail stores are knocking on their door and beg them to get their product in the store because they want to put up an end cap or a wing in a Loblaw’s or whatever it is. if you can start sort of niche and really focus in on your hardcore customer base and then you know if you keep growing and you’re successful then the major retail players are going to come knocking it and whether that’s you know getting you in their store or might even be acquiring them, there’s lots of opportunity there. so, you know once you have that fanbase that really wants your product, then the power shifts to you and you have the leverage as the entrepreneur. but you know starting out and just trying to be everywhere at once, including major retail, i think that’s just not an economical and a realistic plan. it’s going to be too expensive, you’re going to be too diluted across too many stores and locations and without the fan base already knowing about you from email or social media or whatever. they’re gonna come into the store they’re probably not going to pick up the product because they’re not they’re not familiar with it they don’t know it they’re probably going to stick with the tried, tested and true product that they’ve been buying for years. so it’s better to build that relationship online if you can in my opinion.
Jeffery: that’s a great opinion and I think a lot of companies are trying to go into that process and say you know what if I’m going to try this is where I’m going to try it first but they still do have companies that are going direct to the to the shops and trying to buy in there is there in this online persona and what I like about what you said is it kind of all boils down to brand. So is brand kind of really important to you as an investor and how much emphasis should a startup put on that brand because you can’t just build people into something if you don’t have a great brand that they can resonate with? So does it really come back to that brand side and then kind of product follows after?
Matthew: i think brand and products sort of have to be building them both at the same time and obviously you got to have a great product in order to sustain the brand but one of the like one of the best things that I ever learned from my sales and marketing days was to start building that brand and getting those creative assets and the awareness out into the marketplace as early as possible. I tell startups that we work with them all the time. people want to be able to google you or look you up on social media and you know see podcasts or articles or blogs that you’ve done or videos and content that you put out there and that really gives them social proof and credibility and confidence that you know this is a legitimate brand it’s a legitimate company they’re building a quality product they’re not going to you know take my money or screw me over and then from an investor’s perspective they’re going to do the same thing right as part of the diligence process. they’re going to want to listen to podcasts or read blog posts that you’ve done so start getting that content and building that brand out into the ecosystem as early as possible I mean even if you don’t you know you’re still in beta or you haven’t even launched your product yet just try and get something out there and start building that portfolio of assets because it’s really going to pay dividends over time. like you do one really great blog post for example and that can stay relevant for years. There Are people that have built entire businesses on that. Start building the brand from day one.
Jeffery: I love it. and just to kind of reiterate that getting something out there right at the beginning at least puts a mark in the sand and shows people that you’re serious. It starts driving. it also gives you some energy to get behind that drive or that position of what that brand stands for and you’ll kind of iterate over time. but you gotta have something out there to start making a mark absolutely.
Matthew: couldn’t agree more. well it’s interesting to say that I’m a big fan of the whole branding side and I learned it from the cpg side. I learned it from my days in Loblaw’s. Even though I was a software engineer, that’s how I really got behind and learned a lot more about how brands took care of themselves, how they got people to buy into them and it really did come down to that brand facetime and how you can get more people buying into that. and that is you kind of mention it, getting in podcasts, doing all the different little things that are going to change it up especially if it’s in Toronto or you’re in Calgary or you’re anywhere in the world. it’s honing in on that initial market and trying to expand from there. it’s probably more effective to start in one localized spot and then kind of grow from there.
Jeffery: Do you find that from an online perspective and building out a brand, doesn’t matter if it’s cpg or not, are there any tactics that you would recommend or things that you look for that really can help someone bolster that brand or bolster their business when they’re starting off early?
Matthew: especially in the startup space they probably don’t have a lot of money to do a big marketing campaign or big push-up front so i think it comes down to getting a little bit more creative like trying to find out where online you know your key customers and how your ideal customers spend their time. and i don’t know whether that’s you know reddit or Facebook groups or whatever it is and then really honing in and targeting on those people then I think once you’ve got you know your first 50 to 100 solid customers, that you know repeat purchase from you and they really like your product then you can just kind of grow from there it starts to snowball. But another big thing that I tell founders all the time is from day one, start collecting as much feedback as you can, any chance you get to get feedback from people. Whether it’s one or two questions about the product, how they’re using it. You can’t get enough feedback in the early days and you can really build on that and ideally solve customer issues before they even raise it as an issue. be one step ahead of them, fixing bugs or tweaking things and then they’re just happy and delighted that you took the initiative to find out how they’re using it what potential problems they might be running into and then solving them before they even have to you know call you or email you or potentially in the worst case scenario give up your product for a competitor so yeah just uh like talk to your customers as much as you can as early as you can and just get that feedback I love that service them as much as you possibly can because earlier on you’ve got the time so build a rapport get them excited about what you’re doing and win them over and then once you win them over keep servicing the hell out of them so that they keep being your fan because they’re going to tell other people and that kind of spreads oh for sure and i mean it’s so much cheaper to just delight an existing customer then go out and acquire a new one right i mean a lot of people i think a lot of startups they sort of focus on growth in the early stage and that’s true to some degree but you also want to make sure that you know your bucket’s not leaking and you’re churning customers out because it’s a lot easier and less costly and less time consuming to just make those existing customers happy and keep them on board than trying to find new customers
Jeffery: Well I agree that that’s fantastic so you mentioned that your grandmother got you into investing. What got you investing at an early stage and now that you’ve kind of moved out of cpg, what does that focus look like, what kind of companies do you work with and invest in and what got you first started in angel investing?
Matthew: I had been reading about angel investing for a number of years before I started and I mean quite honestly I just like the idea of learning about new technologies and connecting with other like-minded entrepreneurial type people. I think there’s probably no greater feeling than investing in a company early on and then seeing them succeed and continuing to grow and hiring people providing jobs. it’s just so much value creation as opposed to a lot of investing, looking at you know hedge funds and stuff like that they’re just kind of financial engineering and trading and not really creating value in the world. So that’s the one thing I really like about angel investing is just meeting with new people who are trying to bring new items and create new value into the world in terms of investment sort of criteria that we look for. We invest more at the early stage seed to look for companies that are post product post revenue. I mean it doesn’t have to be a lot of revenue. it can be you know five thousand dollars a month but you know some type of early indication you got some early customers you’re starting to monetize things. i know you mentioned it but um even though my background is in cpg we focus predominantly on software so i don’t invest in cpg anymore but then our typical check size can range anywhere from 100 to 250 000. so that’s sort of the overall thesis for us.
Jeffery: awesome. So it kind of steps on that whole branding side where they’re going to market, they’re servicing their customer and they’re going for validation and you guys are looking for that validation to occur so some sort of form of revenue post revenue they’re building the company.
Matthew: You can see that there’s an opportunity. They may have already taken some investment dollars already up until this stage and then you guys will jump in and start working with them. As an entrepreneur myself, I think that’s the most exciting stage because you know you’re starting to see, you’re getting excited, you’re starting to see those initial customers coming in. People are starting to pay for whatever you built and that’s the most exciting thing. I remember getting our first sale with the coffee company and it was just such an exhilarating experience. I’ll never forget that. I think that’s the most exciting place to be working with these companies that are coming out of the gate. they’re starting to generate revenue and you can help them with product feedback whether it’s introductions to customers because they most likely don’t have the entire team built out. In some instances, it’s just two founders. so, there’s a lot more opportunity to get your hands dirty and work with the company at an early stage and really watch them grow and that’s what’s really exciting for me.
Jeffery: and how much do you take while you’re working with these companies and you’re making these investments in that seed? In series positioning, how much do you go back and look at earlier work experience? How much of that kind of leverage is where you are today? How do you analyze a company and how do you help companies? Do you think a lot of your background supported that, like you just mentioned that you did bounce from cpg into software? but I’m assuming you touched software throughout your entire career up until this point? So how much of that work together to get you where you are today?
Matthew: i think a lot of it, for sales especially, because i spent a number of years in sales, i mean whether you’re selling you know software cpg whatever. i mean sales is sales and if you can if you can convey and successfully communicate your value proposition and convince people to buy your product, i think that’s universal across any vertical so that’s always helped me in terms of marketing i mean there’s a lot of standard marketing rules and branding rules as well that apply to a lot of different verticals. So for us, we’ll usually invest in a company where there’s maybe two or three people and oftentimes neither one of them has a sales or marketing background. So even though I’m not going to step in and become a sales rep or marketing person for the company, I can at least help guide them like, ‘okay you’re going to need someone who’s got a background in this.’ and this is the type of you know high level overview stuff that you’re going to want to do and it’s interesting there was one company that we invested in earlier this year and they wanted to announce their round but they had never written a press release. they had no idea how to do it so I essentially just walked them through the process. This is how you structure it and help them write it and in a way it went and it went out so now they have that tool and that template that they can use going forward right but just to be able to sort of leverage that experience and help them out where they don’t have the expertise. I mean that’s what I like doing. I like getting in at an operational level and helping out where I can.
Jeffery: That’s awesome and is that part of the mandate on your investment side that you guys will invest and then spend a certain amount of time working with the founders throughout that journey or how do you guys look at your interaction with the businesses you invest in?
Matthew: We definitely want to stay involved. we’re definitely not passive investors. we’re not going to step in and try and run the company. That’s obviously up to the founders but I tell them all the time, we’re running as an angel syndicate with almost 600 members. We have a very diverse group of individuals and if I can’t personally help with something. Please leverage our network and let me know and I’ll send a message out to the group. and nine times out of ten, someone will be able to step up and help. and if that’s just jumping on a 30-minute zoom call, or it’s HR recruiting, whatever you name it, they’re going to jump in and help because they have a vested interest in that company’s success. I tell founders all the time to leverage our network. It’s such a powerful and diverse group of individuals you know from senior executives at billion-dollar companies to angels to VCs, people who built software and technology companies. leverage that network. We want to get involved where we can. Obviously, we don’t want to take over but that’s what we’re here for. It’s early days so all hands on deck and we gotta get this company to the next level and the next milestone so we’re happy to chip in and help.
Jeffery: I love that. I think it kind of goes back to your earlier part where you mentioned the branding side and getting out there and pushing things to the market with a very similar concept. It’s building a network. you’ve got a network you’re telling companies to build a network and get out there and promote it and push it so that people will get behind you not just your customers. but now you’ve got a dual sided marketplace. you’ve got customers and investors and leverage both of those units to help your business grow.
Matthew: we’ll leverage our network to introduce the company to potential new customers, new investors for future rounds. So pretty much anything that a company is going to go through, we can probably help in some regard. It’s great to be able to have that network on the back end just to help like we have. I look at it as having a sort of a VC fund with hundreds of people in my back office from all sorts of different disciplines and specialties.
Jeffery: that’s awesome because we’re talking about the extra hands that will jump in and invest in other rounds, what’s your position around a company that wants to bring investors in from that the social platform perspective getting into spaces like front founder and all of the other social platforms where they can get their customers to invest in them? Do you believe that that’s a great form of raising funds or how do you see that in this world of changing economics of scale for startups?
Matthew: I think it’s great. the whole equity crowdfunding thing we’re seeing right now and the recent relaxation of the accreditation rules in the US and companies can now raise more money on crowdfunding. I think it’s fantastic particularly for consumer facing companies. What better marketing campaign than getting your customers invested in the company that has a vested interest in your success they’re obviously going to tell all their friends. one part owner in this company they’re only going to use your products. they’re going to be super loyal so I think it’s great. I tell companies all the time that if they’re a consumer company, go out and try and raise part of your round through an equity crowdfunding if you can because you know customers love that they want to be part of the journey. They want to feel connected to the company. they don’t just want to be another number and a customer service claim number so make them part of the journey and make them part of the process. I think that’s only going to help the brand and grow the company that much quicker. I’m kind of thinking that there’s this marketing 101. you’ve got a brand. communicate community social equity. you really follow these kinds of steps, you’re going to have a really strong ability to drive investors and drive sales. In Calgary, there was a local brewery for example that recently reached out to me and just wanted to pick my brain on some fundraising tactics. I introduced them to the front funder platform and I think it’s great because front funder’s done a lot of work with distilleries, breweries and even vineyards. So what better way to build that brand loyalty than to go out and then offer your customers, ‘hey have you ever wanted to own a piece of a brewery? Well now is your chance,’ and some of the crowdfunding campaigns on there have been wildly oversubscribed and people absolutely love them and then I guarantee you every weekend when they’re thinking about going to a brewery where are they going to go and where are they going to buy their beer from. you’re basically making customers loyal. and then from an investor’s perspective, i mean if the company has raised their first round on an equity crowdfunding campaign. For example, I think that’s a great signal because it shows that you have a diehard customer base with a great product, and we have repeat customers’ customer loyalty. and who would not want to invest in a company like that. so i think it’s a great signal for investors and it’s a way to activate that customer base. I like the fact that you called it a great signal because that’s exactly what this is. it’s a way to get other people interested in your brand. people that are using it that creates a great signal for investors to say, ‘hey you know what, just like company over here that sold two million dollars’ worth of products on a social platform now they’re gonna roll out their product in the next two years that also looks good for them to go and raise funds the same way so i don’t think it actually is a bad thing.’ I think it’s really certainly a smart way of getting investors interested. Does it take out the risk? not so much, because you have no idea how that product business or whatnot have managed themselves. but i think that that’s where that angel group or vc group have to go in and do their due diligence to confirm that this is a company that they want to be part of regardless of all the great things that they’ve done over here there’s still the back end which is what these guys have to get in through and start working through but i think all dollars coming into a business are certainly going to help that company not only survive but find a good foothold in the market. From our perspective, one of the things that we look at as part of our diligence process is that early customer base and what their reviews are, what they are saying, how they like the product. if you have 150 people part of a crowdfunding campaign that absolutely love the product and that’s the reason why they’ve decided not only to buy the product and be repeat customers but they’re essentially voting with their dollars and investing their hard-earned money into your company, i think that’s a great vote of confidence and a strong signal.
Jeffery: I like that. voting with their dollars. we need more of that certainly. Obviously, they’ve had some good changes to their accreditation rules but I think Canada is going to follow suit and it’s getting better. The front funder has done a great job and it’s still early days but if we can get more people investing in the companies and the brands they love, the better. I don’t see why someone can go and spend thousands of dollars at a casino but they can’t invest in their favorite cpg company or a brand that they use every day just because they’re private companies. So I think the regulators are taking notice and we’re going to see some positive changes in the coming years. like we just said about investing in companies that you use. When I started investing in ’95, when it all turned on one person said to me, ‘you should always invest in companies that you use and support.’ So I think my first investment was in apples for twenty dollars. I was a big fan of that but I do agree with that and I stick to that today. As an early stage investor, if you’re going to use a product you want to invest in, that should be a company you want to invest in. it’s not so much always about, ‘is this going to win or is this going to fail? you got to evaluate all those things. But it really comes down to the value the product is going to bring if you’re a consumer.
Jeffery: I couldn’t agree more. So just before we shift, we got one more last question that I want to ask before we kind of jump in and kind of transition. The question is, can you give us maybe four or five points that you look for as a firm? when you guys have made these last five investments, is there a couple of things that really stand out that you look for that really make a difference when you guys make an investment what you’re looking for is saying a founder or a founder team or a business that kind of puts you over the edge and say, ‘you know what take my money?’
Matthew: because we’re investing at an earlier stage, it really comes down or it starts with the people in my opinion because you know there’s usually such little data to go on the company. If you’re lucky a year may be a bit more but it really comes down to the people and sort of the story about why they’re solving this problem and ideally it should come from some level of domain expertise like they’ve been working in this field for a while. They saw this problem. they had this passion or this itch to solve it and now they’re finally going out and doing it. we’re looking for people that are grinders and they’re not afraid to bootstrap. I think one of the biggest negative signals that I sometimes see is founders that don’t want to start the company until they close their first fundraising round. For me, I want to see someone who’s going to work to make this thing exist with or without my money. you’re either with us on this journey or you’re not. but we’re making this happen. So another thing is what they have done previously doesn’t necessarily have to be a previous founder with a multi-million dollar exit but has some type of proven execution. You can look back at what kind of person, academics or sports, they were in their previous lives if they have been very successful at whatever they’ve decided to put their mind to. I think that’s critically important and a good indication of future success. From there, we’ll look more at the product in the market size. So is it large enough? What kind of product is it? do they have some kind of defensibility or unfair advantage? Does it solve a major pain point for people? From there, we’ll look at the customer base. what people are saying about the early version of the product. how much they’d hate it if the product disappeared or the service was gone and they could no longer lose it. i think that’s a big signal as well but definitely starts with the people that’s really what you’re investing in up front.
Jeffery: I’m going to just emphasize a couple parts there which are the grinders. because you mentioned it but then it carried into the next one which was your execution. so those kind of really tie together which is people that just get things done and make things happen. So I wholeheartedly agree that those carry so much impact because at the end of the day, you need accountability. you need people that work hard to get something done. So I think those really sum up the whole drive behind the team and without those two things you’re kind of just a product that doesn’t really support much. so it’s probably good if you can figure out how to get in with the grinders and the people that execute. there’s a lot of ideas but there’s not a lot of people that can actually execute on those ideas, people that are resourceful. they’ll figure a way to get it done with little to no money and that’s sort of what we’re looking for. There was a company that we recently invested in where there were just two guys. a team of two guys and they’re already generating over a hundred thousand dollars a month in revenue. They built this incredible software product. This is just two guys doing everything and they’re not taking a salary. they’re paying themselves incredibly little and they’re basically living on ramen noodles but they’re determined to get this done. versus other companies that we’ve looked at where the founder wants to close the round before they start and then they want to pay themselves a six-figure salary out the gate and all this. That’s not what we did with our CPG company. we were still working evenings and weekend jobs to support our life and pay our rent so we’re looking for those grinders absolutely.
Jeffery: I love it. Those are great stories and that is a nice transition to the next question I have for you and this is going to look more into what it takes to be an entrepreneur. so just looking for a heartfelt story that you can take from all the years that you’ve been in this environment and just look back and think. Was there any story that really popped in your mind that just blew you away that she or he went through all of these things to get to where they were and you couldn’t believe they were able to pull it off and it just makes for a great story? We like great stories here so any story that comes to mind that you can think about and share.
Matthew: I was never an investor in the company myself but I was just reading a couple years ago, the story about Drew and Arash who were the founders of Dropbox. I thought it was a fantastic story because at the time when they were building out Dropbox, everyone was telling them, ‘this is a waste of time, you’re going to get destroyed by google drive and Microsoft and all these other storage options.’ but they had a vision and they just focused on doing one thing incredibly well. making a great customer experience, really listening to them to their customers and building in those tweaks and those improvements that the customers wanted. look, they built a fantastic company, a multi-billion-dollar company. it all really came down to their focus. they didn’t try to be everything to everyone. they had that initial target customer and they just really wanted to solve that problem and do it incredibly well for those initial people. That’s the key. they basically went up against google and won and that’s a fantastic story in my opinion. you know two underdogs were building a product competing with the big Microsoft and googles of the world and they managed to do it. They built a multi-billion dollar company so I always sort of look at that story when you know I’m feeling maybe a little discouraged or deflated or it’s not a great day. I’m like, ‘hey if those guys can maintain focus and beat out google and Microsoft then you know i can do whatever i’m trying to do.’ so i love that one problem, one solution and they hustled and they made it happen exactly.
Jeffery: It’s a great story and they’ve done amazing things throughout that time and continue to. so big fans as well. we’re going to go back into some more rapid fire questions.
Matthew: sounds alright.
Jeffery: These ones are business related, founder or co-founder? for investing, would you want a founder or two co-founders? What would you prefer?
Matthew: i would prefer co-founders
Jeffery: unicorn or a four-year 10x exit unicorn attacker? cpg ai or blockchain? ai first time founder or a second- or third-time founder? second or third time first money in or a series angel or a vc angel board? or observer? convertible note leads or follow-on on one? alright! Those are the rapid fire ones. These ones can go a little bit more if you like.
Matthew: I actually like this method better. This is good.
Jeffery: What’s your favorite part of investing? meeting with smart people who are trying to change the world? you mentioned this but again verticals you’d like to focus on consumer or enterprise as any due diligence requirements that you look for that are a must before you sign the check?
Matthew: We’ll go through our financial statements. we’ll look at ip assignments if it’s all assigned to the company. go through the hiring plan. how much runway are they going to get from this current round, customer reviews and feedback product roadmap. sales pipeline fairly a lot of standard stuff. I would say I prefer terms.
Jeffery: so, do you care if it’s a safe convertible node? any of those or you’ll invest in all?
Matthew: we’ll invest. In all , my preference would be a convertible note over a safe just because you have the defined conversion date and the pro rata built in. whereas a safe you’d need those on a side letter. so convertible notes ideally at the early stage.
Jeffery: okay. Do you do follow-on investments?
Matthew: yes, pro rata is something that we look for in each of our investments.
Jeffery: Okay, perfect. That was good and it’s interesting too because some of those questions I have to think about with my investor cap whereas my personal individual angel cap might have a slightly different answer but like a syndicate lead perspective, those were good. I like those. there’ll be more. I’m now blasting this out more. I’ve been thinking about it and I like rapid fire because it makes you think and then you can bucket everything pretty quickly. Now we’re going to go to the final personal questions. favorite sports team?
Matthew: go habs, go. I did pick them to play the islanders and the Stanley cup. so they’re both tied two and two. so, I’m itching to see but I would have to say that I have a feeling that the islanders are going to win it all. If it goes to the two of them going into the finals, they are looking pretty good this year. They’ve been my favorite team since I was a kid so I have to stick by them. But just like Carrie Price, he’s a rock star and he is due for a cup.
Jeffery: Yes, that’s right. so that’s a tough one. I’m like ah, but Carrie Price and then I’m like no you’re an islander fan. leave it alone, walk away.
Matthew: I’ve been a hops fan since I was a kid so I got to go with the hometown team
Jeffery: That’s true. well they are Canadians so that’s the other tough one so but i like it that’s great. Alright. favorite movie and what character would you play in the movie?
Matthew: Well, that’s a tough one. If we’re talking classics, I’d probably say Raiders of the Lost Ark or maybe Goodfellas. I love those. if we’re talking something more modern, i’d probably go with dark knight or Sicario. I really like those movies.
Jeffery: And which character would you play in either of those four movies?
Matthew: I don’t know. I could be Indiana Jones. I like traveling and adventure, so let’s go with Indy. I just watched that whole series literally like three months ago. I watched the entire series and I actually think I missed one of them, which was the last one. I never saw it so it was actually kind of cool to watch it and they have so many innuendos in those movies that I can’t believe that as a kid I was allowed to watch them.
Jeffery: That’s a thing you wouldn’t even pick up but your parents are probably sitting there just laughing inside, shaking their heads like wow, I can’t believe that happened. but it was pretty good. They were pretty good. The other one was a good fellow. just a classic. I love good photos. and which character would you play in that?
Matthew: Oh that’s a good one. I’d probably go with de niro. they’re all good because everyone else gets whacked.
Jeffery: That’s true. He’s the only one standing. That’s a good point. i haven’t seen that one in a while but either way I may have to look that up. I’ve got, after all the interviews, a very good selection of movies that I have to watch. I started the Lord of the Rings series again and it just happened last week. One of the investors said that was his favorite movie and I was like oh I’m watching that one tonight. so, it worked out very well. I’m still two more movies behind but regardless I’m a big fan of getting all this great insight on the best movies out there. Those “Lord of the Ring” movies are good. they’re long though. You need at least three and a half hours to watch a movie. but either way Matthew, fantastic. I appreciate it so much that we’re able to chat today as I always do. I got to show my notes. I’m a note taker. i can’t help it but there are a lot of valuable things there that you shared, we’re gonna talk about after. but the best way we like to end the show is to give you the last word and you can share anything you like to the investor community or to the startups. But again, thank you for all your time. all the valuable insights and thank you for joining us.
Matthew: Hey, it’s a pleasure, thanks again. I guess I would say to everyone as a whole overall. i know you know the last year with COVID-19 has been really challenging and tensions are high has sort of come out of this COVID-19 bubble and maybe some of us have forgotten how to socialize with other people but i would say just take it slow and be kind to other people and Just realize that we’re all kind of making things up as we go here and figuring it out and trying to figure out our way forward so be kind to others and don’t take yourself too seriously.
Jeffery: I love it. thank you very much for that all the way from Australia. Brilliant. Thank you for joining us. That was great. That was Matt hanging out down under. He’s in Australia. fantastic insights again. I really enjoyed that the brand community communicated the social side and drove some sales. All of this has to do with getting your company into a position where it’s investable and it’s de-risking it. as much as you can for investors and the whole validation side, letting people vote with their dollars by getting them to join in on social equity sites. What they’re looking for is domain expertise, grinders , people that execute all brilliantly and those are the things that founders have to really pay attention to when they’re going out into the investment world. How do I get and attract investors? well a lot of this stuff is how you attract them so hopefully everybody sees that gets excited and can kind of line themselves up to all the great things they need to do to attract customers and investors. Thank you for joining us today, if you enjoyed this conversation please subscribe to our YouTube channel or follow us on Spotify apple podcast or in stitcher you can also check us out at supportersfun.com or for startup events visit opn.ninja. Thank you and have a great week.
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