If you want to grow your company through investment, cultivating relationships with investors is the key to moving forward, according to speakers at a virtual event for entrepreneurial women Tuesday.
The event, hosted by the Waterloo Region chapter of Women in Communications and Technology, was the third in a series marking International Women’s Day 2022. This wrap-up of the Break the Bias series, sponsored by the Women Empowering Women Digital Community, was focused on angel investing and early-stage funding for businesses owned or founded by women.
Moderated by Danielle Graham, Principal at Dream Maker Ventures, a Canadian venture capital fund founded by women and persons of colour, and attended by 90 registrants, Break the Bias ranged widely, from an appreciation of the Canadian climate for women founders (it’s better than in many countries) to the importance of authenticity.
Panelists included: Donna Litt, COO of sales training accelerator Uvaro; Vicki Saunders, founder of SheEO, which mentors and supports women entrepreneurs; and Shirley Speakman, Senior Partner with Canadian cleantech venture capital fund Cycle Capital.
Litt, speaking from the perspective of one who supports women seeking capital for their own businesses, says the refrain she hears so often is “Raising money really sucks.” Many women founders fear that outside investment means a loss of control or they can’t differentiate unwelcome investments from good ones. Some feel that access to capital simply isn’t available: They may say “I don’t know how to get access to capital… it seems like it’s not accessible to me.”
Litt said it is important for women to understand how to work their network to get that access. Founders have to develop connections, by giving knowledge about their enterprise and then getting knowledge in exchange about the needs of the investor. “Using that knowledge is the path to access.”
Saunders agreed that “to me, the most important thing is relationships. Relationships are absolutely the core of everything. You can’t get access without relationships.”
Creating the conditions to build those relationships takes a lot of work, said Saunders.
For example, entrepreneurs and investors tend to stay in their own bubbles of like-minded peers. But the two groups “are rarely in the same community . . . When you blend these two things together, what you do is you create the opportunity for people to understand each other better. I’ve seen lots of investors do things that are not orthodox, they are not doing what everyone else is doing, because they understand what challenges the entrepreneur has.”
She said that entrepreneurs may themselves try to fit into what they feel are the requirements for a particular financing modality, “but private wealth can do whatever they want with their money. They can change things. They don’t have to stay in the boxes we’ve created.”
She recounted, for example, that she had heard of investors who offered 10-year loans at zero per cent interest, so that an entrepreneur could maintain control of their company. “There can be all kinds of impossible things happening when you get into a relationship together.”
Saunders said she wasn’t a fan of teaching women how to “pitch.” Saunders advised founders to “meet people where they are. Showing up in a more personalized way is the heart of the change happening here.”
Investors are as interested in new ideas as entrepreneurs are, Speakman suggested, noting that Cycle Capital has allocated a small portion of its funds to create launch pads for companies and founders that the group felt had potential. These launch pads were intended to help founders understand what they have to achieve to illustrate their potential to investors in the next level of investment, whether that is an angel group, an individual investor or a venture capital fund. The aim, she said, is a positive experience for the entrepreneur and a higher potential for success when they start approaching the major players.
Speaking to what is, and is not, working well for investment, Saunders said her experience, based on working with women in five countries, is that “Canada is doing quite well in ecosystem-building.” She noted that Mary Ng, federal Minister of International Trade, Export Promotion, Small Business and Economic Development for the past four years, “has done a phenomenal job” of looking at the ecosystem as a whole, rather than looking at individual parts. The result has been more investment activity and angel funds “popping up,” but the biases in the system that work against women remain, and “you can’t just add women and stir.” She said she’d love to see more experimentation by the investment community.
Both Saunders and Speakman emphasized building relationships with like-minded investors before you need them. “Imagine there are people out there who fit with your values,” said Saunders. “The bolder you are in owning who you are, the more clear you are about that, the more likely you are to find a better fit.”
“Being intentional and being authentic are critically important,” said Speakman. She noted that if entrepreneurs don’t want to be in an unhappy relationship, neither do venture capitalists.
Speakman said that for those thinking about investment, it “can be a fabulous and exciting journey . . . it is incredibly rewarding to do early-stage investment. I encourage you to give it a whirl.”
Other highlights:
Focus on the value over the valuation.
A really messy capitalization table gives an investor a simple reason to refuse a request.
Beware of accepting a strategic investor – you may have just pre-sold your company.
Setting too high a valuation can set a company up for failure, should that valuation have to be downgraded.
Money is important, but power and influence are the name of the game.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
