"Run your business with a good eye on the numbers and the cash flow because everything is about cash in the door and being able to meet your expenses."

- Rob Douglas

Rob outlines what he looks for in a start-up

Talk Takeaways

Rob Douglas, the man behind GTAN (Golden Triangle Angelnet), sat down with Jeffery Potvin as they discussed his journey from an accountant to becoming one of the prime movers in Canada’s angel investment community. With Rob’s finance background, he emphasizes the importance of cashflow management for early stage entrepreneurs, the benefits of a fractional CFO, and the importance of reporting.

As a person who has so much passion in helping startups, his advice to businesses is to persevere and that while as an entrepreneur you have to focus on your business, you must not forget that you have a life and to make sure that you get up every day doing what you want to do.

About

Rob Douglas is passionate about building Canada’s economy. A founder of the Golden Triangle Angel Network (GTAN), one of Canada’s largest and most active angel investor networks, Rob enables new Canadian companies to succeed. Rob has served as President and Executive Director of GTAN since its inception in 2009 and has recently stepped down from that role to return to Roseview Capital Consultants, a company which he co-founded in 1998, and where he looks forward to new opportunities in the early-stage ecosystem.

A chartered accountant by profession, Rob is a past Board Member and Treasurer of the National Angel Capital Organization (NACO), Canada’s voice of angel investors. A leader in the investment community, Douglas bridges the gap between local initiatives and national policies.

He commits his energy towards building the entrepreneurial spirit in Waterloo Region and currently holds equity positions in several early-stage growth companies. Rob is a man of vision distinguished by his strong entrepreneurial spirit and a wealth of experience in owning and managing private businesses where he has developed strong skills in strategic planning, business plan execution, process analysis and human resource development.

The full #OPNAskAnAngel talk

Jeffery:
Welcome everybody! We’re at — it is I think Wednesday four o’clock — and we’re interviewing and talking with Rob Douglas and I’m very excited to sit down with Rob. I’ve been working with Rob for a couple years, I’ve learned a lot from rob just in all of the meetings that we’ve been part of through GTAN and their analysis of startups so it’s been a really great experience but Rob, maybe i can turn it over to you. Love to get an introduction on yourself, a little bit about your background kind of where you’ve come from to where you are today. And some of the things that you are working on now. And then one thing about you that nobody would know. Because I always like to kind of get that one little nugget that no one will know about you and then i can use that next time I’m trying to hit you up for money. And I’ll be like —

Rob:
Yeah for sure.

Jeffery:
Both of us can hold our breath for four minutes underwater that’s amazing so that’s kind of the direction I like to go. So yeah fire take it away.

Rob:
Well thank you very much. It’s an honor to be here today, Jeffrey. And yes we’ve had a relationship over the last couple of years, even longer than that I think at GTAN. In terms of who i am, I’m probably described best as a recovering accountant. I’m a chartered accountant by trade but have never practiced as such if you want a tax return done i don’t think you want to ask me to do it. It will not be done well probably. My interest in in accounting though really came from my desire to be in business. And in business for myself. And I wanted a business education. And i i couldn’t see a better way to get one than to actually work at an accounting firm as an auditor, I worked for what was Pricewaterhouse, now PricewaterhouseCoopers. So that’s where i got my ticket and honed my interest in working with small businesses or businesses in general. After that, I had an opportunity to move into a totally different career which was becoming a stock broker and I did that for the firm that is now The Royal Securities or Royal Bank. And that was an interesting exercise, I thought I was going to be able to provide people with expert advice on how they should be investing in and filling their portfolios. What I discovered was that when you work for a firm that has an inventory of stocks and bonds that you’re there to sell their stuff not to provide advice necessarily on what’s a good portfolio. And and I don’t mean to demean what is done by representatives these days. But anyway i moved on after that to work as a comptroller in a public company and out of that I had an opportunity to actually buy a small division of that company that was for sale. That got me started and that was in the distribution business actually. It was in the fabric distribution business. Small business that employed only 15 people. But it was a business that sold products across Canada and that really got my feet wet in dealing with all aspects of running a small business. Whether it’s HR matters, whether it’s marketing, whether it’s production, all of those things became part of my my mantra and I’ve carried on since that time buying and selling small businesses and providing that kind of holistic input to running them and managing them. The last company which I owned and managed on my own I sold in 1996. That was a company that was involved in human resource outsourcing and it was fortunate that enough capital came out of that exit that I was able to become an angel investor. That led me into working with a partner by the name of Carl Furtado. He and i started a business together doing capital formation for early-stage companies, and that was in 1998. We did that for about a decade and we were approached in 2008 by the national angel capital organization, I think it was called national angel organization actually at that time, but we were approached by them because of our experience in capital formation with early stage companies to put together a not-for-profit angel network in the Waterloo region. So Rob puts up his hand and says sure okay, I will be seconded from our company which is called and still is Rose View Capital to run GTAN, Golden Triangle Angel Network. So i have spent now 11 years at GTAN building it from no investments, no members, no office, no telephone, no anything to a fairly successful venture that has through its members over 90 invested companies, our members have spent about 40 million dollars of their own capital to invest in those early stage companies, and we’ve been able to attract because of that additional capital to our leveraged extra capital so the impact has been 85 million dollars or so into early stage companies many of them located in the Waterloo region. So Jeffrey as you know i have recently stepped back from my leadership role at GTAN and going back to my roots at Rose View Capital. Where we’re forging some new paths not only will we do or would we be able to do capital formation but we’re focusing more now on working with foreign nationals, business people from foreign jurisdictions who want to come to Canada and have no idea how to do it and I’m surprised how many people coming from India or the orient or Iran, Brazil you name it, say i’m an experienced business person but I have no idea how to do business in Canada. so we’re building a business or at least a part of Roseview capital that will appeal to companies and people that want to come here and build, acquire, scale or expand companies in Canada. So that’s kind of a snapshot of who I am and where we go from here.

Jeffery:
Amazing. Well congratulations to all of that because there was a lot of firsts in there and i think that’s super commendable. So quite amazing and just hearing that back in 98 you were one of the earlier investors in companies, i think that’s very exciting. It’s not in a bunch of the interviews we’ve done in the past we’ve had different people from Silicon Valley that were the first people in silicon valley to make investments and that blows my mind away. But that’s silicon valley so it’s obviously the portal to the investment community but being able to be one of the starters in the Canadian side of things that’s huge because so —

Rob:
Thank you for that.

Jeffery:
It’s pretty interesting. No that’s awesome and you’ve recorded lots of great numbers and the thing that you mentioned that really kind of piques my interest and the reason why i was excited to chat more about with you in this dialogue was that you kind of focused on the thing to me which is the biggest part of anything that has to go on in a company, and that’s finance. And there’s this big fear of finance when it comes to early stage companies. Qe don’t tend to put as much emphasis on the financial side of it because it’s early stage, yet it’s pretty important. So we do look at obviously everything in business and i think now that you’re when you’re working on the foreign nationals and bringing them in, i think there’s also a play there that still has to deal with the finance side. And i’d like to kind of explore more on your experiences on that finance side because obviously you’ve generated 90 mil or 40 million into 90 companies. You guys have really done a great significant effort into growing small business. Not only through Rosco Capital but through the angel networks and so on. What do you think is the big fear when it comes to early stage companies looking at finance? Is it just lack of understanding of the books and the knowledge of the business? Inexperience? Or what do you think is something that the startups can look at changing to be stronger and more suited when they’re starting their companies?

Rob:
Well I think the the operative word there is inexperience. Most early stage companies that you and I would see at a GTAN selection meeting tend to be technology-based companies, an I.T play of some sort, and these are technologically strong entrepreneurs but accounting and governance and all those kinds of things are not what they are used to. So i come at things from sort of a different perspective that yes in the early days of Rose View capital, my role in dealing with early stage companies was to assess what was their financial presentation usually within their business plan and to provide some input and advice on how it might best be presented in order to appeal to investors. But above and beyond that, it had to make some sense. And still i see entrepreneurs who think that they’re going to just turn the world upside down and money’s gonna roll in the door the moment that they introduce a product to the marketplace. And as you would know it takes much longer to introduce a product, it costs much more money to introduce a product. So typically the financial plan that you see in an early stage business company is not strong and needs to be tempered and it usually suggests to an entrepreneur that all of a sudden money they thought they were going to have, they’re not going to have in any hurry and that some financing is going to be required to actually help them launch and accelerate the process which is where we get into dealing with angel investors. So there’s a big reality check i think that most entrepreneurs need to go through and an understanding that most early stage companies are not an overnight success. If we go back and look at a company like blackberry, while we say it was an overnight success, yeah it took 20 years to be an overnight success so to speak. So it takes a lot longer and a lot more patience and a lot more just common sense i think to understand the numbers, and respect the numbers, and run your business with a good eye on the numbers and the cash flow because everything is about cash in the door and being able to meet your expenses.

Jeffery:
well you you kind of hit the the nail in the head there with one that I was going to jump right into which is cash flow. Is there some advice that you can share around you know you focused on this whole probably giving it a more holistic view how i look at a business when i’m putting the financials together, in experience i need to put something together so that the investors will like it I put these high projections but really when it comes down to its survival. It’s really early on you’ve got a brace for bad weather so that you can actually move through the next eight to 12 months. Is there any advice or any information that you have around the cash flow that can really help a startup understand the pitfalls that they might face, if this comes it’ll take a break, slow down, don’t go and resource up like crazy before you do that maybe look at this side of the business or things like that you go through with the startups to kind of get them to better understand how to lay out the business over that next eight to 12 months while they’re generating angel investment?

Rob:
Yeah and my advice is generally go slow and don’t make any big commitments. People think oh well I need a big office, well i need some new office equipment, well i need new furniture and that kind of stuff. Startups that are successful often start in the basement, they start in a garage. Steve jobs, any of those people you talk about, those kind of experiences they start in a modest way and they fund their expenses out of cash flow. So when they got some money they they will buy something that they really need but boy I’m always telling people don’t extend yourself because you think you need to, you think you’re going to have a need for something. Got to be cautious.

Jeffery:
And in that cautious side of things, do you like or try and push startups to look for government side funding? Like is there vehicles out there where they can find dollars that can help them through that MVP or prototyping stage where it’s better to do it that way than to invest that personal capital or angel money into there?

Rob:
Absolutely. I would not overlook government funding. A lot of people think that it’s pretty complex to find it but you’ve got governments out there that are as anxious as bankers i will say and maybe more anxious than bankers, to actually inject some money into the economy and into companies. So my experience over the last decade has been with organizations like fed debt in Ontario that had a wonderful program called investing in business innovation IBI, it doesn’t exist in that format anymore. But in that particular instance fed dev was willing to advance 50 cents on every dollar that was invested by angel investors up to a maximum of 2 million angel investment, 1 million for them. It was a marvelous program and it was a loan so it was not dilutive to the companies that were accepting it. Low, low interest rate and extended payment terms. So it was ideal now anytime you get in bed with a large organization like a government though there are reporting requirements so you have to understand that there will be late nights doing reports to explain how you are using their money. But we’ve got Ontario organizations and we’ve got federal organizations that have money to spend and if you have a need and can find your way through the labyrinth of where the money rests that will best suit your needs i would advise looking for that.

Jeffery:
No that’s some great advice. Is there you mentioned kind of you know you’re kind of going through this, trying to find the the best way to grow your business, you’re looking for cash infusement, balancing your cash flow, you’re looking at government funding… so do you think anywhere in this mix that there’s a good opportunity or a good value to find maybe a fractional CFO or somewhere along the lines of a resource that can help you on the finance side? It tends to be from what I’ve noticed a lot of companies leave that as the very last choice of someone to talk to. They’re more or less geared because a lot of angels and businesses want you to have high sales so they tend to run and gun on the sales side and build the marketing and then they leave the finance to the very end and then it becomes a massive cleanup job and legal falls in that bucket too and i think those are two of the unknowns that really happen in this year. So do you recommend something along those lines to help out at the beginning and you know what save some money because it’s going to help you in the long run?

Rob:
Fractional CFO, I would highly recommend. And i over the years have offered my services personally to companies to help them with their record-keeping and their financial systems and to create a little bit of discipline about well let’s have a financial statement every month, let’s watch the cash flow on a regular basis, and depending on the business and its maturity it could be looking at cash flow every week! Like what have we collected this week, what are our payroll requirements so on and so on. So operating a small business i i refer to as constant vigil. You can’t just assume that because you issued an invoice to somebody that the money’s gonna come in and you don’t need to pay any attention to what’s in the bank. You’ll get a rude surprise someday when it’s Friday and you’ve got to write those paychecks and guess what there’s no money there. So a fractional CFO I think is a good idea to help monitor things. The cost is only insignificant compared to the benefits that you may get but again because of the nature of the companies we deal with and the entrepreneurs being more interested in their technology than in the back office as it were, it’s often ignored but should not be.

Jeffery:
No again, more great advice. And i highly again support that I think that’s huge. Do you think that a lot of companies push that away too much and i think it’s a real benefit to the startup to look at when they’re starting to grow that company and they get their first thousand or first ten thousand dollars in there, the lights go off and the excitement for what they’ve accomplished and i need to hire i need to do all these things but i do think there’s a huge value in understanding the numbers better and understanding i think it’s not always understanding the the current business, it’s understanding the future business. And now you’ve started to work on market fit and there’s government programs where you can get into for getting that small funding that can help your business but there’s also bigger government funding that can help you with shreds and other pieces like that became very beneficial to your business and that can help you plan out when you’re going to get cash coming back in and infusing back into your business.

Rob:
I believe so, yep.

Jeffery:
So and now that you’ve kind of moved through this, you’ve really kind of educated us through this system on how to start working with a CFO and managing cash flow, so there’s kind of that next stage and you mentioned this which was monthly cash flow statements and things like that so are you kind of big and heavy on reporting? Is this something that you kind of get behind as well and and I have a deep opinion on this but I’d love to hear what your thoughts are on it because I think this is kind of falls into exactly what you were trying to get at..

Rob:
And well yeah, I do believe in reporting. There’s no question about that. And that ties in with the fact that i at least have this financial credential behind me. But as an investor i have had experiences where i have worked with entrepreneurs who are very good in keeping you informed and then there are those who just want your money and want you to go away. And the term i wouldn’t use is absence doesn’t make the heart grow fonder. I get very frustrated when all of a sudden i have no idea what’s going on with an entrepreneur that i had some trust in. and because of that, i over the years have refined my selection process to working with entrepreneurs that i really have a strong feeling for as opposed to shall I say just a quick investment in what looks like a promising technology without giving full consideration to who’s driving the bus every day. And and I gotta have a strong feeling that the entrepreneur and i are on the same page with respect to our mutual expectations which includes regular reporting.

Jeffery:
So in these in the types of reports that you’re looking for, are you looking for cash flow statements or are you looking for more just a generalized bucket that says here’s the health of the business, here’s what’s going on, here’s the good and bad and the ugly and kind of working through those and then setting up i don’t know if it’s monthly or quarterly meetings at the beginning, is there some sort of structure and governance that you try to kind of put into them so that they get used to that going forward or are you just happy if it’s a quarterly because it’s better than a yearly kind of thing?

Rob:
Oh no, the quarterly is way too long for me. I come from just a personal feeling of wanting to be hands-on involved in a business without getting in the way so to speak. So as an angel investor, I am not at the passive end of the scale. I am closer to the hands-on and so i would like to receive a phone call on a regular basis or maybe not so regular but a phone call that says we’ve got a problem Rob, here are the options. We could go here, we could do that, so I like to be consulted. I do like to see reports that come out on a regular basis but that would be monthly. I would suggest so it’s a monthly financial statement and it doesn’t need to be so detailed that it takes somebody days and days and days to prepare and in this day and age when we’ve got quickbooks and all kinds of other accounting software it can be kept up to date pretty quickly and so we can get what i’ll call meaningful reports or in some cases the content of the report is is not as important as the fact that the entrepreneur is having to think about reporting. But if it’s not part of their their DNA then you really worry about what’s slipping through the cracks. But at least if they know that there’s an expectation, that Rob or a shareholder or somebody else wants to look at something on the last day of the month or the last day of the week following the month some attention will be paid and then that opens the opportunity for a little discussion, a few questions what can we do better next month, it’s a healthy exercise to be revisiting where you’re at and what you’re doing on a regular basis not quarterly or yearly. At least not the sorts of companies that i want to be involved.

Jeffery:
No that’s great and i fully support that and think that is obviously some more great advice. So on this regular basis side, it kind of sounds like you’re like you said you’re working as a consultant, you want them to feel free to share and update you as much as they can, so you’re building that process in for as that company grows so taking them through that process so they’ll always want to do this, does that kind of put you into an advising role? Like does it allow you or want do you want to be part of that company in that capacity? Is that something that you look for when you’re working with these companies as well as you found this owner you like what they’re doing so you say hey you know what i’ll join your board or like is there some process there that you try to make sure it ties you in so you can create that similar governance?

Rob:
Yeah, exactly. So when i said i’m not at the passive end of the scale, i really would want to be involved. So my track record would show that i invest in a smaller number of companies and companies that i can therefore take a more active role in. And so whether it’s a board role, whether it’s coaching and mentoring in some other capacity, as i said right at the outset because I have a comfort level operating small businesses. The largest business that i ever operated there were 50 employees at one point in time so i i’m not familiar with how to run an organization that’s got thousands of employees, so think of me 50 or less so 10, 15, 20. I can get my mind around that i got some sense about the dynamics of the personnel angle and the things that are going to get in the way of running the business effectively. So i can do a little coaching on the HR side, i can do some financial coaching, i’ve had to prepare marketing programs myself so i understand that it has to be done. And I’m pleased to be consulted when somebody’s well how do you like the look of this right and i’ll say well you know there’s a lot of stuff on that page and there’s not enough white space. I think if you did a little bit of this and a little bit of that — so you know i’m a mixed bag, i’m a generalist that can touch some points in a small business that i think would be helpful on a regular basis that’s relationship i want to enjoy with the company.

Jeffery:
I love that. And you’re also keeping advanced on how things should look and feel. The white space. So you actually have a good knowledge and generalist knowledge of what’s going in the market, what people like and driving it forward.

Rob:
yeah yeah.

Jeffery:
I love it.

Rob:
that’s it. And so here i am i continue to have that interest and look forward to having that interest. There are people who say, hey rob boy you’re done GTAN, now you’re going to retire right and I quickly say I don’t want a wheelchair and i don’t want a lawn chair, I want to be active in business. And always have been since I was in my teens or maybe even earlier I would have been the kid that had the lemonade stand out on the street. I was the kid that would want to go and paint the neighbor’s fence as opposed to going to the theater in the afternoon. You know I’m a doer that’s you know —

Jeffery:
That’s just like to get things done. No that’s awesome and you know what, it’s helpful because you’re taking your past experiences and you’re allowing them to filter through what you’re doing every day which is working with and helping early stage companies and i think that’s brilliant and it’s super helpful. So i think you’ve kind of taken us through this nice little journey of how finance makes a big difference in the small business and the different things that you can do and how the reporting feature works and being an advisor or a mentor to help out these companies can you give us a little bit more detail on how and the shift now from the GTAN investment side. How you’re looking at the the new structure of your business bringing new business coming into Canada and working with them to come in, is there a process, is there something that you look for in a company to help them come into Canada? Is it a tech based? Is it numbers that they have to have a set amount of revenue? Or you kind of just open it up and you figure out okay well you’re in this sector and we’ve got opportunities here
and you work with the government bodies to to help those businesses come in can you share a little bit more how that works?

Rob:
Well yeah and a couple of things first of all we we’re establishing two programs. First one we call our base program which is building, acquiring, scaling or expanding a business in Canada. That is designed to orient foreign nationals on whether or not Canada is the right place for them to come and do business. So we’re not being so specific about a sector that you should come from so it doesn’t matter whether you’re an i.t or you’re a manufacturer whatever it may be. We welcome people to come into this program which is designed through 15 units of education to provide them with an overall understanding of what it’s like to do business in Canada. So we’re very fortunate that we have some great industry partners like Miller Thompson, like KPMG, like TD Bank Miller, Cushman and Wakefield excuse me and regional support. So in these 15 units we start by what’s our legal structure and that is the first unit. The second unit is what’s our accounting structure and our banking structure then we look at well what’s our government structure like an and what’s the relationship that businesses have with government and then we look at real estate well what’s it like here to rent space, to own space, how do you buy a house, how do you do and we take people through all of this including some  ideas on business planning. So if you’re going to come here and introduce yourself, you’re going to have a business plan which means you’re going to have to have a bit of a strategy about what you’re doing, you’re going to have to be able to have a marketing idea of what you’re going to do here, you’re going to have to know how to build a business plan and and a budget. So anyway there are 15 units we take people through to provide them with some orientation once done they then have an opportunity to move into what we call our rise incubator, so it’s a rose view incubator services for entrepreneurs and and so that incubation process will help us take them to actually developing a full-fledged business plan and launching a business and you know that may take six months, that may take eight months, that may take 12 months. But it’s all i guess based on a whole lot of experience that i have had over the years working with early stage companies and being able to provide those inputs in a range but working with partners that i have Melissa Durrell who is a communications specialist, Mike Dearden who is a government relations and strategic planning specialist i can provide some financial stuff. And then we have other people who are part of our faculty who will be delivering information to these people in an incubator setting. So the focus is on helping people start a business in a new land and launch a business and along the way if there’s a requirement for funding we have some pretty good friends out there in the funding atmosphere. So whether it’s GTAN or whether it’s OCE, whether it’s fed dev whoever it may be, we can also help them uh get some funding if it’s required so that’s the focus of what we’re doing right now.

Jeffery:
Brilliant. No that sounds pretty exciting so are you back in the scene? like you kind of shift pages you’re still in the same scene but are you kind of glad that you’re now back to running back what you were doing the juice is back in —

Rob:
Absolutely. As i said earlier I’ve started GTAN with the no members and no deals and all that kind of stuff and so right back doing the same thing so this is my next decade as it were we’re going to build this business and i would love to be able to look back or at the end of the line say here are a hundred successful companies in Canada that we help bring from various foreign jurisdictions they now employ thousands of people and are exceedingly well i’ll say doing well but also contributing a lot to the Canadian economy and the wealth of our community. So that’s what really gives me a high as it were the the contribution that these companies may give to Canada and our local region.

Jeffery:
I love it. So Rose View is making some changes and they’re going to grow and get back into where they’re comfortable doing all the good stuff that you have been so that —

Rob:
Absolutely. Absolutely. Never stop until you can’t do it anymore. I think that’s what Steve Gilpin keeps saying.

Jeffery:
That is true yeah you have to keep pushing. So in this kind of manifestation of something new and exciting that’s coming through are you finding that in the economy that we have right now that it’s a good timing to kind of build in this new format of business and really dive in to help out?

Rob:
I don’t know that the economy at this point in time has so much effect as the fact that there are a large number of people in foreign jurisdictions that are i’m going to say disadvantaged. And you know we’ve got some parts of the world that are war-torn areas and and there are still people there who have bright ideas and and would be worthy Canadian citizens. So there’s an altruistic viewpoint to helping people out of a situation that is a bad situation and bringing them here. But also we have to recognize that Canada’s birth rate is insufficient without immigration to support the social programs that we have at this point in time. So baby boomers getting older and and so the health care costs are getting greater and yet there are fewer people who will be employed who have to pay the costs of all of that. So immigration is really important to us. and immigrating people who have good ideas who can build businesses and be contributors to our economy I think is very very important.

Jeffery:
Agreed. Hugely important and it works through all streams right? If when immigration is down in any country they all have a tough time struggling to help small business find cash flow and generate sales across the board. So people coming in all over the place is really benefiting every government or every country that’s out there and I think the policies will continue to shift and change in the Canadian side of things, in North America to be able to help that. And you can take if we don’t make these changes you will see that we’ll be positioned like in Japan where they’ve had a really slow birth rate and growth rate in the economy that the average age of marriage and kids is stagnantly really high and what has caused the economy to have to open up huge on the influx of immigration in order to support the elderly people that are in the economy and they don’t know what else to do anymore so and they’re one of the economies that never really opened up to immigration. You’re seeing such a big shift and I think I would predict in the next maybe 15 years 30 years you know you’re going to have a change in just the way the policy works for traveling. I think you’ll be able to travel anywhere in the world that you want. They’re going to have to open up to I’d say 75% of all countries. I know you’ve got the EU and things like that but i think those packages are going to open up everywhere. And the reason being is that they want you to go into other countries, they want you to spend money, they want you to go there and work for two three years. Why not we just make this world passport so that you can come into my economy, buy a place, spend some money, go to your next economy and not have to be constrained by taxes and other issues because we need those dollars, we need those people working here and maybe we need to rethink on the way that we globalize our countries. So i think there’s in time that might be something that comes out of it as long as they don’t keep building moats around our countries. But it might be a way for them to drop that down and i think with the discussions that they’re having right now with universal income, you’re probably going to see that style of universal travel and pieces that allow for people to go in and out of countries a lot relatively faster and move commerce quicker.

Rob:
It’ll be fun to see it unfold.

Jeffery:
Yeah I’ll be there with my first passport. I’m in. i want to be able to do it.

Rob:
So okay.

Jeffery:
I think it’ll be pretty cool.

Rob:
Yeah. Well Rob, i think you shared some awesome information. I’ve learned a lot and I’m sure the audience is gonna learn a significant amount in this as well. I’m sure there’s a few more things that we’re gonna dive into but i think what I’m gonna do now is we’re gonna jump into the rapid fire questions, and then from there we’ll end it off with one or two more questions and hopefully that works for you.

Rob:
Works for me. What questions do you have?

Jeffery:
All right. We’ll jump into them. So only because we did talk a little bit about this one so you can put a little bit more interest into this one but you know you mentioned kind of why and how you got into startups but what’s your favorite part of investing in startups?

Rob:
My favorite part well i would have to say my favorite part of investing in startups would be getting to know the entrepreneur really well. It’s a fundamental building block for me that if I’m going to invest in a company the entrepreneur has to be somebody that I can work with and that I like I need to be able to get along with somebody. So I get my energy from people and knowing an entrepreneur and trusting and being enthusiastic about seeing that entrepreneur succeed that’s the best part of angel investing.

Jeffery:
I love it the energy, it’s just always strong and especially when you get to learn more about that person right it just kind of helps draw you right into the business

Rob:
Yes.

Jeffery:
Okay perfect. How many companies or dollars do you invest per year?

Rob:
How many companies or dollars do I invest well… that’s —

Jeffery:
And you can generalize whatever is easiest.

Rob:
Yeah, yeah. I’m going to say fewer rather than a larger number of companies because I’m selective. I’m looking for opportunities where my background will add some value. So I’m not looking to invest in 10 companies a year, I would prefer to look for one or two that I could add value to so that’s where I come from.

Jeffery:
It’s a great answer. You’re bringing something that most don’t and that’s value. So if you’re going to be able to get into it I think that’s a great strategy and a great plan.

Rob:
Yeah.

Jeffery:
Do you do follow-up investments and what percentage of investments?

Rob:
Do I do follow-on investments… I absolutely do or at least make sure that i am prepared to do that again. That’s just because i take a personal interest in the companies i invest in. It’s not a passive venture for me so I want to make sure that if the company needs some more of my help that i haven’t spent all my money up front so to speak so i would like to help them in that way or also to source money whether it’s from other introductions i can do or through government sources and thanks.

Jeffery:
Love it. Do you have any notable companies that you’d like to share?

Rob:
And I don’t know that I have any notable companies that I would like to share, most of the companies that I have worked with and and invested in are I’m gonna call them almost no names. In that I don’t have any multi-million dollar hits that I have made on early stage investments, I have made a tidy income with small amounts on many occasions so to speak. And so those companies tend to be as I say no names that you would not recognize probably.

Jeffery:
And that’s okay exits are good. We don’t get worried about how you get to them as long as you make the right decisions and it sounds like you’ve done that so love it. Any verticals that you’d like to focus on?

Rob:
Well any verticals i like to focus on… I think we’re all part of this, at least in Waterloo region, part of the technology hub as it were. We’ve got the University of Waterloo and we’ve got Laurier and we’ve got the AC and we’ve got Communitech and so on. So we tend to see more IT companies and technology companies in this region than we do manufacturing or others and therefore my bias goes in that direction but it’s not because I’m specifically looking so much as I’m happy happening to meet companies who are in those verticals.

Jeffery:
Okay. Do you have any preferred terms that you like to invest on? If its preferred shares, common, safes, anything to that extent?

Rob:
Terms… I prefer common shares always and that shouldn’t say that I would exclude debentures or preferreds but common shares it fits with my psyche that I’m part of the company right from day number one and I’m not gonna win or lose at the same rate that the owners of the company have.

Jeffery:
Love it. Do you have any specific due diligence that you like to make sure that you wrap around when you are getting close to finalizing a commitment?

Rob:
Due diligence. I think it’s a very important element of what we do and it’s more than just me getting to know an entrepreneur. If we look at my background as accounting processes and checklists and numbers and respect for building a file of information is important to me so i don’t go on gut feel. I, quite frankly, I’d like to know who the entrepreneur is but I’d like to see a paper trail that gives me the comfort that knows, that suggests that everything is in order and it gives me some assurance that probably we’re going to have good reporting as we move forward if there is a good due diligence file that has been prepared for (inaudible).

Jeffery:
Love it. What is your timeline for investment? Like one to three months? Something standard or you just kind of roll with it? What’s your timeline?

Rob:
For investments there is nothing standard. The only thing that i would say is never rush it. So I have done some of those in the past and they virtually all have failed that i didn’t do my homework so I’ve learned that over the years that don’t rush it.

Jeffery:
I agree. Anything that rushes it there’s crazy but even in anything i do in business if somebody’s rushing me I refuse to jump anymore because I’ve found that every time I’m being rushed something’s being missed intentionally and it doesn’t net out nicely. So never rush i agree good advice. Do you lead rounds or take board seats?

Rob:
Lead rounds or take board seats I’m gonna say that i do lead rounds only in the sense that i often do deals where there are a couple of other people who maybe want to be passive investors and therefore they kind of look to me because I want to be the hands-on person, to be the lead preparing the due diligence and bringing a report back to them saying this is what I’ve found, this is what I’m willing to do, this is how I’ll engage with the company and my partners in that case will say okay let’s go for it. Typically I’m not involved in deals that have dozens of investors. You know I’m looking at investments where it’s me and it’s two other people something of that sort. And I’m the eyes and ears so I’m effectively taking the lead if you talk about taking the lead though. On a larger investment I’ll say with a dozen other co-investors that’s a big commitment. Not only the amount of time you have to spend but the responsibility to those other people so that’s not a role that I have particularly sought to do.

Jeffery:
Okay understandable. And you did mention that when you’re in the company you’re game to be on the board says it’s pretty crucial to how you operate and work with that startup so all great insights and information. So we’ll kind of shift out of these rapid fire questions and now I have kind of, i’m always looking for that heartfelt story of a company that you came across, you invested in or you worked with. That kind of went from nowhere to nothing to falling off the face of the earth to then just popping and they just found their way. Any stories that you can share that you’ve come across in the the last few years that you’ve been working in the angel world that can kind of help perk everybody’s energy up to to learn that this is what somebody had to go through to get to where they wanted to be?

Rob:
Well I don’t have a specific example that I have worked with so much as I always go back to the story of of apple and in the year 2001 or so apple was out of business like they were dead ducks – and look where apple is today. And so somehow there’s something about perseverance and getting things right and it goes back i think to focus and just not taking your eye off the ball. So there was a firm that, bless his heart, Steve Jobs would you know he just wouldn’t give up and look what it has produced – the most valuable company on the face of the earth. So i look to situations like that. I can’t give you an example of a company that I have worked with that has sort of been through that same kind of transformation but it does happen. And so i think you need to believe and believe for a long time. I have a large amount of stick-to-itiveness generally speaking.

Jeffery:
No I love it and you hit it right there with perseverance. sometimes you think you’ve got to the end of the ropes and you can’t find another way around it and you kind of take away back from it you sit down and relax and you’ll find until something hits with you and you jump right back in the match and go at it pretty good and make it happen. So I think you’ve gotta, sometimes, you gotta take a step back to refocus, but perseverance and driving and never really giving up is you’re a way to win. Especially if you know you got something that’s worth it.

Rob:
Yeah, yeah for sure.

Jeffery:
Is there one piece of information that you can share that you found over the years of working with startups that you think outside of maybe its perseverance because we just talked to it is there something that really stands out that you think an owner really needs in order to be successful?

Rob:
Well ,I think an owner needs to be well aware of what’s going on around them. And when i say that you can’t sort of be introverted and expect that you can operate your business without being fully aware of what’s going on in your marketplace. Who is in your marketplace, what’s going to influence you, not only today but a year from now and so on. So I think I’ve seen too many entrepreneurs who get I’ll just say comfortable doing what they’re doing, business seems to be going okay and they get blindsided by new technology that may come from somewhere else or just different trends — COVID 19 like were you prepared And so i think that there is an element of preparedness that people need to be aware of and so it’s planning and it’s stepping back from the business, using your terms and assessing the situation from time to time. So it’s a little bit of a strategic planning process that one needs to engage in and should do it on a regular basis. And that doesn’t suggest it’s monthly but maybe once a year you’ve got to sit back and say where are we, where do we want to go, reassess our goals and make sure that everything’s on track.

Jeffery:
I love it. Great advice, planning stepping back. Yep all those things are going to help you clear your mind and figure out how i got to get to where i need to be. I think I’ll take something you said earlier which is working with advisors and the consulting side of things, i think that will also help you build that target of somewhere to go. Having these people jump in and tell you that you need to be here and having them get behind you and support you will you drive faster as well.

Rob:
Absolutely.

Jeffery:
So if we take a look at the crystal ball and we say based on where we are right now, three months the next three months and then the next three years are there any verticals you think that industry startups investors should be focusing on, and is there any predictions you want to throw out through your crystal ball that says you know in the next three months we’re going to end up here but in three years we’re going to be over in this side of the field, and think about these areas to focus on because they’re going to be huge markets.

Rob:
So what should we be focusing on in the near term and maybe in the longer term. I think we’ve learned recently because of COVID 19 that there’s going to be a great deal more activity done online. People who didn’t shop online people who never thought they’d buy groceries online are doing that now so i think we need to be aware that the whole world of online applications is going to be an important place. Also in line with what I suggested earlier about immigratio, we’ve got baby boomers that are still in our system that are going to be a heavier and heavier load on our health care system so anything that is focused on health care and perhaps more particularly geriatric care i think is probably going to be a very hot area. Maybe i shouldn’t even call that but a a good area so those two things i would think.

Jeffery:
Online and healthcare, yeah yeah. Those are great. Well I think that Rob we’ve learned a ton. I think you’ve shared a lot, it was fantastic to get to know you a lot more. I did what i always do which is taking lots of notes.

Rob:
Good for you.

Jeffery:
I’m a big fan so lots of lots of good stuff there. And I guess the the way that I want to say thank you first of all, for all of your time and sharing with us and allowing us to share this out to the community. And I think it’s going to be very helpful and the one thing that i do like to do which is our last segment of the show and that is i want to give you the option to share one thing that you want to say out your last word for startups or investors anything that you want to give advice or anything like that you think is going to be beneficial but we give you the last word.

Rob:
You give me the last word. Well, I would say you know you’ve got to focus on your business but you also have to have a life and you better make sure that when you get up every day that what you are doing is what you want to do. And as I said earlier about not wanting a wheelchair or a lawn chair so many people say to me Rob you must really like what you do and I say to them I find my life is so exciting. I meet so many young entrepreneurs and older entrepreneurs. But people who are creating new and different ways of doing things who have new and different technologies and it’s all very exciting for me. So I only suggest to everybody who is in business, make sure that you’re really happy. That the shoe fits, that the glove fits, and that you just want to drive this business every day, that you get up in the morning that it’s what drives you.

Jeffery:
I love it. I’ve noted that one down and I’m going to use that in my monologue but I think it’s brilliant so I like it. Well Rob, again thank you very much for all your time today. Everything you do in the community, everything you’ve done to build GTAN, you’ve done a lot of great things we thank you and I thank you for spending the time with me but I want to say have a fantastic day and happy Wednesday and thank you again for your time.

Rob:
It’s been my privilege to be here, so thank you Jeffrey for inviting me.

Jeffery:
You bet. Have a great day Rob and thanks again.

Rob:
Okay.

Jeffery:
Okay that was fantastic! So rob shared a ton of great things. Two areas to focus on, online everything’s moving online 100% agree with that, super correct. Healthcare another big one why because as you mentioned you have geriatrics, elderly people changing, we have a big influx coming how are we going to manage through that of course you’ve got COVID and other things that can come out of the next three to five years so that’s a great idea, a great way to focus on the next three years. And I did like what he said when you got to believe in what you do and when you wake up in the morning that you’re excited of what you are doing and that’s your driver and that you’re happy and you’re happy doing what you are every day. So you’ve got one life to live you might as well be happy smiling, and driven, and passionate about what you’re doing. And I think he really hit that one home for that and make sure you’re really happy, So yeah from everybody here at at OPN and in the supporters fund thank you very much for joining in. Rob was a great guest and I’m a big fan of Rob and being able to work with him. He’s very knowledgeable and I’ve learned a lot, so thank you Rob and thank you everybody for joining in. Have a great day.

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