My Investment Philosophy
I had the luck of being the CEO of Discovery Parks and Discovery Foundation, based in Vancouver B.C., for twenty years. During this time, we built and/or renovated almost two million square feet of sophisticated technology buildings on and off university campuses as well as on land owned by Discovery in Vancouver and Burnaby. We led the way in creating LEED certified buildings including the first LEED Platinum office building in B.C. and a range of wet lab capable spaces.
I had the privilege of connecting with everything from one person start-ups to revenue positive operating companies delivering science and technology based products and services. During these years I also served on the Board of the BC Technology Association, the Vancouver Economic Commission and similar organizations. All of this added up to twenty years of exposure to several hundred opportunities to invest in these tenant companies and others.
By seeing many of these firms on a daily or weekly basis, I got to know their founders and the team around them. I watched their progress and became a sounding board for their investment pitches and business plans. With my tight management team around me, we advised and assisted many of these companies in how best to explain their visions to the world, who to talk to for professional services and how to communicate with angel investors.
I became one of these angel investors.
I invested primarily on my judgment of the credibility, effectiveness and honesty of the founders of these firms. This was more important than the sophistication of their ideas, their science and their processes as long as I could see they intended to deliver products and services with a strong competitive edge.
I didn’t always get it right especially in the earlier years. I was sometimes swayed by brilliant science that, in truth, I didn’t really understand. But it sounded amazing! With hindsight, I should have realized that if these science project companies could not explain, in tangible terms, why their product or service would be a market beater, I should have steered clear. I also learned that the personal histories of founders can be illuminating but I didn’t always dig deep enough.
However, I am ahead of the game, overall.
My philosophy for investment now, with all of this experience and hindsight?
- Bet on the jockey, not the horse. Invest in the people ahead of brilliant and complex ideas
- Imagine the world at least five years out and figure out where this firm might sit in the big, competitive and rapidly changing world.Will they be relevant? Will they lead?
- Carry out your own due diligence and understand where these founders came from, how they have organized their firms including the powers they retain by way of shareholder agreements and their articles of incorporation
- What is the most likely exit – liquidity event – for investors? Is the company being structured to achieve this?
- Assume the firm will go through more than one ‘pivot event’
- Am I satisfied to be a passive investor with no board seat or formal advisory role?
- Does this investment feel good or do I have doubts? If there are doubts, move on