Five years ago, I was a Venture Capital (VC) partner in a tier one VC firm called XDL Intervest with serial entreprenuers Dennis Bennie, founder of Delrina WinFax, Michael Bregman, Founder of Second Cup, and Tony Van Marken, CEO and Founder of Architel. When I left Accenture to join with these three talented opeators - it felt so great to have the wind at my back leaving a firm where creativity and innovation capacity were often stiffled due to the cultural reality to execute to scale and a preference and comfort level more in conformity vs diversity.
The Dot Com period in late 2002 was like riding a wild roller coaster - except the rails came off the track when the market collapsed as the meaning of profit and loss and balance sheet returning to meaning something. So the business world almost over night - returned to the business reality of back to business basics.
Although five years have passed, it still remains difficult for early stage entrepreneurs to source venture capital in Canada. To put in context, of over 1.5 million companies seeking financing - only 500 received venture financing in 2005. That’s one in 2,000 - about the same odds of a PGA Tour recording a hole in one.
I was so concerned about this trend that continues to persist, I founded the CEO Fusion Center, with Bob Wilson, Founder of Clicking Capital. Bob has had a successful history in supporting early stage companies and our collective vision for the CEO Fusion center was to set it up as a not for profit organization that would help CEO’s improve their leadership capabilities and enable them to work with peers to increase their capabilities to attract venture financing. After a successful year plus getting this organization off the ground as Chairman and Founder, the organization has now a more focused governing operating model and continues to improve its offering year over year under the guidance of Dr. Steve Gedeon and Bryan Watson. One of the hardest lessons any enterpreneur that is a founder has to go through is to learn how to let go when it is time to move on - I am now a better coach to the CEO’s I work with from this growth experience.
In our work with Helix Commerce International Inc. a global firm which focuses on helping develop innovation, growth and transformation capabilities we have partnered with companies like: Stratage and Innosight that have successfully pioneered new approaches to solving these type of growth needs. What Innosight and Helix have both found in their global research is that developing innovation capacity requires leaders to think and act more like venture capitalists. The razor sharp focus of a VC has the skill to identify new opportunities that will create market value and offer a healthy return to investors. VC’s unique ability to smell out the winners and kill the losers is an entrepreneurial skill that we need more of in public companies that are striving to turbo-charge their innovation capacity in the war for growth.
My earlier experiences as a venture capitalist and now supporting over fifteen early stage companies either as a Board Director, Board Advisor and investor has helped me appreciate that one of the most difficult innovation roles is to have early stage CEO’s develop and take to market successfully a new business model. The courage this takes - the incredible resilence, tenacity and ability to attract, develop and retain top talent is one of the toughest jobs anyone can take in business. The odds are clearly against sourcing venture capital - which is one reason why so many great Canadian companies secure financing from the US market. Having smart venture capital with smart networks to help accelerate growth is paramount in an early stage company - and many of the Canadian VC’s lack the operating experience of successfully managing a P&L in either a start-up or medium or large company capacity.
Smart CEO’s that are rapidly trying to innovate surround themselves with smart board advisors and know that the odds are against them from the get go and hence more talent around the company in its early stages is critical to achieve growth success. If you have any perspectives to share on innovation and venture capital in the Canadian market, please email me at cindy@helixcommerce.com. The question we are currently researching is Does humor in the office environment increase risk taking and hence accelerating innovation capacity? If you know of any prior research in this area let us know - stay tuned for a new blog entry on why humor pumps up office energy to innovate.