Author: Metiquity Ventures

Active investing, does it mean sometimes you have to be cruel to be kind?

Metiquity Ventures co-founders Bryan Slauko and Jacques LaPointe have shared the significance of ‘being the bad guy’ when it comes to guiding the next generation of local, early-stage companies and founders in Alberta and across the Canadian Prairies.

While the pair celebrate recent success in portfolio companies moving to further seed round, including WaitWell and Arolytics Ltd as well as new investments including $400,000 Investment in Saskatoon-Based Runnr Delivery, and $300,000 Investment in Calgary-Based Mastrius.

Bryan notes that an active investing model means working with companies and guiding them through challenges and that means, “there’s been times where we’ve had to get a little bit tough and have some challenging conversations.

“We are nice guys, but there are times where we have to be the bad guys.That’s all part of managing risk for our investors and invest to make sure that companies we invest in can succeed,” he adds.

In a similar jest, Jacques LaPointe maintains that it is the responsibility of Metiquity Ventures to help founders understand “blind spots” in their strategic vision and subsequent execution – an entrepreneurial void which can only be filled with the right level of experience.

“Often founders feel like they’re doing the right thing based on the information they have,” Jacques says., “But they don’t have the broad experience of seeing (how similar challenges and problems may have played out multiple times before within other ventures and other companies.

“It’s our job as active investors and mentors, to bring those experiences to forefront and share that information so that our founders can have those light bulb moments where they go ‘Oh, okay, I get it!”

So cruel, no but constructive criticism, is key to helping our companies scale.
Read more about the success stories of WaitWell and Arolytics Ltd via our blog.

The Battle of B2B and B2C Startups

Figuring out what potential investors are looking for from startups in emerging markets such as Alberta can be worlds apart from what they’re expecting in more established hotspots such as Silicon Valley, Stockholm or even Toronto.

For example, In July Silicon Valley-based software company Teknol announced plans to move its engineering headquarters to YYC, a $12.5-million investment which is predicted to create 125 jobs over the next three years, with the company’s CEO hailing Cowtown for the “positive buzz” of its tech sector.

This year’s annual Tech Talent report also found Calgary to be Canada’s second largest tech hub (trailing behind Vancouver) with job growth in the sector increasing by a massive 61 per-cent.

Most companies, however, can be separated into two different groups with unique factors driving their investability from a VC perspective: 

Business to Business (B2B)

B2B simply means the business will focus on selling its product, service, or technology to other businesses. A company dedicating itself to this strategy needs to make sure potential investors understand why they have chosen to target other businesses (as compared to individual consumers) and the benefits of doing so.

A B2B sales strategy allows for larger purchase orders or broad installations of technology, as other businesses usually have significant buying power (much more than the average consumer), as well as a willingness to sign long-term contracts.

When preparing to pitch a B2B business to potential investors, founders should make sure to highlight the advantages of targeting other businesses and clearly explain why this is the strategy that provides the largest avenue for further growth for their company.

Business to Consumer (B2C)

Where B2B’s target other businesses, B2C’s target the retail consumer. By going direct to consumer, companies are targeting an audience with much lower buying power when compared to other businesses. However, the size of the potential market is usually much larger.

Typically, B2C businesses benefit from higher gross margins, as well as a much wider reach in terms of who they can market their product/technology to.

As an entrepreneur begins to think about presenting their B2C business to venture capitalists they should remember to articulate the breadth of the market, high margins and (again) why specifically this is the best decision for their company.

Testimonial: A Lift for Arolytics 

In September this year Arolytics Ltd – a provider of methane software and data analytics solutions for the oil and gas sector – became the inaugural investment in BDC Capital’s new $150M Sustainability Venture Fund.

The fund itself is dedicated to investing in businesses which develop technologies which will support businesses both in Canada and further afield in meeting sustainability and climate targets. 

While additional investors include Yaletown Partners, StartupTNT, and a Houston-based strategic investor, it was co-founder Liz O’Connell’s work with Metiquity Ventures which she credits to the company’s exciting next chapter.

Liz met her two fellow co-founders during an academic emissions research group, during a time in which there were little-to-no strong widespread regulations around emissions management for the oil and gas sector. However, with a prompt wave of new regulations came an opportunity for Liz and her co-founders to create digital solutions to support and automate all these new processes.

“When we work with different oil and gas clients, we really understand your pain points and corporate objectives” Liz said on the topic, citing an ambition to get clients on the path to “exceeding their north star efficiently and effectively”.

However, Arolytics Ltd’s startup journey took an eventful turn two years ago when Liz and her fellow co-founders decided to start working with Metiquity Ventures in a bid to better position their company as a celebrated solution for oil and gas companies across Alberta and further afield.

“Over those two years,” Liz remarked, “Metiquity has been there through all of these crazy ups and downs, and all these things that get thrown at us as a result of running a startup.” These issues include a new range of data challenges at the hand of an evolving emissions measurement infrastructure, many of which pertain to the (very significant) monitoring, measuring and quantifying of emissions data across hundreds and thousands of individual facilities across dozens of different states and provinces and countries.

On the topic, Liz elaborated: “There’s always that ear to run something by – that second piece of advice. Jacques and Brian are extremely responsive and they always bring a unique perspective to the table, which we really benefit from.

“Leading up to our seed round that we kicked off earlier this year. Bryan Slauko had really great opinions on what type of investor we should pursue, and that they were really kind of a partner with us as we went to raise that money.”

As Liz and the gang continue to embark on their next chapter with Arolytics Ltd, Metiquity Ventures’ Bryan Slauko will continue to sit on the software development company’s board of directors.

Testimonial: When WaitWell Got Tired of Waiting

In July this year, queue management software WaitWell – a queue management software optimizes service delivery at busy locations like universities, government offices and clinics – secured $1.5 million CAD in seed funding to expand its product offering across the States, venturing into new markets along the way. However, without the “sounding board” of Bryan Slauko and Jacques LaPointe the WaitWell story would have been very different indeed.

Before the coronavirus pandemic, WaitWell’s founders – husband and wife Steve and Shannon Vander Meulen – ran a motor vehicle registry office in Alberta, but with the ‘unprecedented new normal’ of Covid-19 came a cavalcade of service problems for customers and companies alike.

When the Vander Meulens noticed an opportunity to better resolve lineup management issues, they decided to launch beta testing on WaitWell in August 2020. 

“Through the pandemic, we knew that we had the important role of providing an essential service while doing so in a safe and effective manner,” Steve began. “The solutions that were out there weren’t exactly fit for the style of business that we ran, so we built our own and had the good fortune to commercialise that to neighbouring markets.”

On the topic, Shannon said: “Immediately we realised once you digitize the way that people enter a queue, you have an opportunity to really digitally transform the entire customer experience from the time they join the queue until after they’ve left the building.”

The pair met Bryan and Jacques at an investment summit hosted by Startup TNT (WaitWell won the investment, by the way) and were struck by the pair’s unparalleled experience in the startup world, as well as their shared determination for the company to exit within Steve’s intention of a seven-to-ten-year timeframe.

It’s this “emotional investment” in the WaitWell journey that Shannon credits to the company’s success to date, crediting the pair as a “sounding board” for their questions and concerns as they worked to build WaitWell as a leader in queue management software.

“Although we’re experienced entrepreneurs, we are not experienced in the startup world, and so a lot of times we run into hurdles, challenges and questions,” Shannon said. “Bryan and Jacques have also been really helpful in providing connections for us. They’ve done a lot of introductions where necessary.”

A Humble Handbook of Investor Talking Points

Starting a new business can be a humbling experience. Often startup founders have to begin at zero, relinquish control and admit that despite their title or industry experience, they are not the expert when it comes to scaling up. 

However, emerging markets are so attractive to investors due to their potential return on investment. A strong influx of talent is flocking to emerging tech sectors such as Alberta and Saskatchewan, creating what can be seen as ‘the perfect storm’ for tech-focused startups.

A recent technology report published by Startup Genome named Calgary among the world’s top 60 emerging startup ecosystems – largely credited to sub-sector strengths including cleantech, fintech and ag-tech – while last year 2022 YYC’s tech market comprised more than 50,000 tech jobs, 6.9 per cent of total employment across the city, according to GeekWire.

With this boom in a tech-focused workforce also comes a boom of innovation and VC capital. Combine all this together, and Alberta has created a powerful cocktail for outsized investment returns.

Alberta is a great example of why investing in entrepreneurs within emerging markets is so attractive, with factors such as a growing technology-focused workforce and robust funding from the government contributing to the growth the province is seeing in the VC space.

In August the federal government announced plans to funnell $6.1-million into Calgary’s tech sector – with plans to create an estimated 1,000 jobs across the city – and technology investors and VCs looking to the next unicorn understand it is much more likely to happen in an emerging market like that of the Canadian Prairies.

We’ve compiled a handy list of talking points for any potential investor to sink their teeth into:

Market size 

Total Addressable Market (also known as TAM) defines how much the market is worth that your business is targeting.

Investors are looking for investments with outsized returns, and businesses operating in large total addressable markets offer this opportunity. Potential investors will want to see what market you’re targeting and understand how this market will facilitate exponential growth of your company.

However if there’s a large market, how is your business going to pull the desired customers away from products and services they may already be using?

An innovative product with a growing moat

What makes your product different from what is currently offered by competitors? Who is your audience, and what pain points does your business address? These are some of the first questions you can expect to hear from venture capitalists assessing your business.

Innovation can, at times, be a loosely defined buzzword that is thrown around in business presentations to ‘wow’ the audience; but putting into words exactly how your product is a unique innovator is much harder.

Specifically, potential investors are looking for early-stage startups which clearly define what separates their business from others – how they are building a moat or competitive advantage that competitors won’t be able to easily replicate.

Quality leadership

Especially in the early stages (where you might not have a functioning prototype let alone actual revenue), investors are putting their money into your idea; namely, planning around execution and business strategy.  

They are investing in you, the founder. Your business savvy, your drive, your experience, your due diligence. Have you demonstrated that you are willing to put your time and heart as well as potentially your own money (bootstrapped) into your business?

This is why it’s important to show investors you have the vision to bring a business idea to the final product.

Being a founder of a company is definitely not easy, and you will be regularly required to make difficult decisions and lead your staff through challenging times. Being a strong leader is a necessity for building a company from the ground up and investors will want to see you have the passion, coachability, and commitment that is needed to build a company.

However, as you begin to initiate talks with a potential investor – whether it’s a VC firm or single early-stage seed round investor – they will want to see more detailed plans on how you plan to execute your vision.

Having the technical and STEM talent on board (regardless of whether it’s the founder or team) is important, we’re talking tech startups here! So a scientist, engineer, and a coder or two could be imperative in executing and running your business vision.

B2B or B2C?

Most companies can be separated into two different groups, with each group having their own nuances and things to consider when understanding what potential investors in Alberta are looking for when deciding where they will invest their money. Check out our blog post on the differences between these two different groups here.

Financials

Financial statements are one of the most important things you will bring when presenting your business to potential investors. Your numbers will be highly scrutinized, as they will provide a metaphorical looking glass into the future of your business. Find out more about pro-forma statements, financial essentials and what investors will expect from your financial statement here.

Market Analysis

As a founder of a company, you’re expected to have a high level of understanding surrounding the market your business will operate in.

Undoubtedly your company will have competition or alternatives to your new product, and investors will want to see you have performed in-depth market research to understand where your competitors fall short, why there is a need for your business, and how your company will stand apart from the rest.

Make sure to do your due diligence in analyzing the companies offering services similar to your own, and just as importantly, make sure you have researched your target customer. Investors will also want to see you understand what your ideal customer is looking for and how you intend on making them aware of the value of your product or technology.

Business Experience

When venture capitalists consider investing in a startup, they typically want a leader who has experience. This experience usually comes from one of three different places:

The first is industry experience. If your startup is focused on building logistics software for the trucking industry, investors will appreciate it if you’ve spent at least part of your career directly involved with the trucking industry. This shows you understand the problem your company is working to solve and have an inside view as to why your company’s solution is worth an investment.

The second type is entrepreneurial experience. Building a company from the ground-up is a skill most don’t possess. Investors will want to see your leadership style, as well as any direct experience you bring in taking a business idea and turning it into a fully functioning company.

Investors will also be judging you on your drive, work ethic, charisma, and personality. When presenting your business to potential investors be sure to not just say, but show, how much blood, sweat, and tears you have put into making the vision you have for your business come true.

Remember, as an early-stage startup with little to no success yet, investors are investing more in you as the founder, than the actual company itself.

Make sure to give them a reason to invest!

Putting Yourself Out There

Ask any entrepreneur who pitched their business to a round table of VC firms or angel investors and they will tell you it is a much different atmosphere compared to relying on friends and family. Professional investors don’t know you and don’t owe you anything. This is business, and sometimes, business can be harsh.

However, as long as you come prepared and can articulate the value your business offers and the potential it holds, the chances of you finding the capital you need greatly increases. For Metiquity Ventures this means emerging market technology based business.

A lot is expected of you as a founder, and that may seem overwhelming, but don’t worry. Behind all the financial statements and analysis lies the underlying truth: if you can clearly articulate to investors the potential your company has, and show you are the leader to execute on this potential, the right investors will believe in your vision as much as you do.

It’s not just about trying to impress investors, it’s also about finding the investors that impress you.

Testimonial: Arolytics and Entrepreneurial Expertise

Founded by a trio of academics whose paths crossed during an emissions research group, Arolytics Ltd – a provider of methane software and data analytics solutions for the oil and gas sector – became the inaugural investment in BDC Capital’s new $150M Sustainability Venture Fund in September this year.

However, co-founder Liz O’Connell credits the input of Metiquity Ventures’ Bryan Slauko and Jacques LaPointe for the company’s success to date. On the topic, Liz remarked that being able to utilize Bryan and Jacques’ entrepreneurial experience to date allowed Arolytics to properly scale as a startup.

“They bring years of experience that as a young founding team we don’t have, and so we’re really able to leverage their background and governance in finance and being in the space for a while,” Liz began. “We get the advisory and that governance network perspective from which is wonderful.”

Moving forward, Liz and the team at Arolytics are hoping to jump head first into the company’s next stage of growth through expanding their team size “quite dramatically”.

“I’m sure that we’re exceeding the pace of this quickly moving market,” she added, before urging other prospective entrepreneurs to focus on the ‘partnership’ element of the founders’ story when trying to build a successful startup.

Liz elaborated: “It’s not just about this transaction of money,” instead pointing to the significance of working with professionals who align with your specific wants and needs as a founder (or what WaitWell co-founder Steve Vander Meulen refers to as philosophical ambition’ [link]).

“We spoke with other portfolio companies of Metiquity who had rave glowing reviews for working with Bryan and Jacques, and the notion that there’s a lot of other people that had a great experience with them previously really gave us a lot of comfort,” she concluded.

A Startup Guide to Finessing Financials

For an investor to take a startup seriously, it’s vital for a founder to have their financial statements at the ready. Many early-stage businesses don’t have an operating history or any source of revenue yet, which can make creating an income statement or statement of cash flows rather difficult.

Worry not: investors will still expect financial statements. However, they will be what’s called pro-forma.

These pro-forma statements are a fancy way of describing projections. As the business doesn’t have any real source of income, founders are expected to create projections for the next one, three and five years. These projections will explain to investors important elements such as how much revenue the company intends to bring in, how their expenses will grow and how their margins will change as they expand.

There are three important financial statements investors will expect to see from any bright-eyed business person: 

  • The Income Statement: The income statement shows how much revenue a founder will accomplish in a certain time frame, as well as their expenses. This financial statement will be highly scrutinised by potential investors as it will usually be the first statement they look at. It will also tell them when a budding business is expected to turn a profit, which is (of course) never to be underestimated.
  • The Balance Sheet: The balance sheet describes a company’s assets and liabilities. Things like any intellectual property or technology a company owns can be listed here, as well as any debt or short-term liabilities investors should be aware of.
  • Statement of Cash Flows: This financial statement sheds light on the flow of cash in and out of a business, breaking down your cash flow into operations, financing, and investing activities. The statement of cash flows will show investors a high-level overview of the influx/outflow of money for various purposes.

Financial statements are one of the most important things a founder will bring when presenting their business to potential investors. As well as being assessed with a fine-toothed comb, they will provide a metaphorical looking glass into the future of the business.

For this reason, entrepreneurs should come prepared with realistic projections and an arsenal of information to defend their assumed growth rate, alongside other important financial metrics.

Creating an income statement may be difficult, but it’s sure to be worth the hours of sweat and tears when the right partner comes along.

The Battle of B2B and B2C Startups

Figuring out what potential investors are looking for from startups in emerging markets such as Alberta can be worlds apart from what they’re expecting in more established hotspots such as Silicon Valley, Stockholm or even Toronto.

For example, In July Silicon Valley-based software company Teknol announced plans to move its engineering headquarters to YYC, a $12.5-million investment which is predicted to create 125 jobs over the next three years, with the company’s CEO hailing Cowtown for the “positive buzz” of its tech sector.

This year’s annual Tech Talent report also found Calgary to be Canada’s second largest tech hub (trailing behind Vancouver) with job growth in the sector increasing by a massive 61 per-cent.

Most companies, however, can be separated into two different groups with unique factors driving their investability from a VC perspective: 

Business to Business (B2B)

B2B simply means the business will focus on selling its product, service, or technology to other businesses. A company dedicating itself to this strategy needs to make sure potential investors understand why they have chosen to target other businesses (as compared to individual consumers) and the benefits of doing so.

A B2B sales strategy allows for larger purchase orders or broad installations of technology, as other businesses usually have significant buying power (much more than the average consumer), as well as a willingness to sign long-term contracts.

When preparing to pitch a B2B business to potential investors, founders should make sure to highlight the advantages of targeting other businesses and clearly explain why this is the strategy that provides the largest avenue for further growth for their company.

Business to Consumer (B2C)

Where B2B’s target other businesses, B2C’s target the retail consumer. By going direct to consumer, companies are targeting an audience with much lower buying power when compared to other businesses. However, the size of the potential market is usually much larger.

Typically, B2C businesses benefit from higher gross margins, as well as a much wider reach in terms of who they can market their product/technology to.

As an entrepreneur begins to think about presenting their B2C business to venture capitalists they should remember to articulate the breadth of the market, high margins and (again) why specifically this is the best decision for their company.

Testimonial: A Lift for Arolytics

In September 2023, Arolytics Ltd – a provider of methane software and data analytics solutions for the oil and gas sector – became the inaugural investment in BDC Capital’s new $150M Sustainability Venture Fund.

The fund itself is dedicated to investing in businesses which develop technology that furthers the field in meeting sustainability and climate targets. 

While additional investors include Yaletown Partners, StartupTNT, and a Houston-based strategic investor, it was co-founder Liz O’Connell’s work with Metiquity Ventures which she credits to helping leverage the company’s seed round experiences.

Metiquity Ventures was one of the first investors to partner with Arolytics Ltd. And Liz says their startup journey was in a much better position to raise greater investment because of their lead infuse of cash and contribution (for example, Bryan Slauko sits on the Arolytics Board).

“Metiquity has been there through all of these crazy ups and downs, and all these things that get thrown at us as a result of running a startup,” says Liz. “These issues include a new range of data challenges at the hand of an evolving emissions measurement infrastructure, many of which pertain to the (very significant) monitoring, measuring and quantifying of emissions data across hundreds and thousands of individual facilities across dozens of different states and provinces and countries.”

Liz met her two fellow co-founders during an academic emissions research group, during a time in which there were little-to-no strong widespread regulations around emissions management for the oil and gas sector. However, with a prompt wave of new regulations came an opportunity for Liz and her co-founders to create digital solutions to support and automate new processes.

On the influence of lead investor Metiquity Ventures, Liz elaborated: “There’s always that ear to run something by – a second piece of advice. Jacques and Bryan are extremely responsive and they always bring a unique perspective to the table.”

“Leading up to our seed round that we kicked off earlier this year. Bryan (Slauko) had great recommendations on what type of investor we should consider and why. Their lead investment contribution of not only time but experience has helped us move to further seed rounds.” 

Bryan Slauko continues to sit on the software development company’s board of directors.

 

Testimonial: When WaitWell Got Tired of Waiting

In July this year, queue management software WaitWell – a queue management software optimizes service delivery at busy locations like universities, government offices and clinics – secured $1.5 million CAD in seed funding to expand its product offering across the States, venturing into new markets along the way. However, without the “sounding board” of Bryan Slauko and Jacques LaPointe the WaitWell story would have been very different indeed.

Before the coronavirus pandemic, WaitWell’s founders – husband and wife Steve and Shannon Vander Meulen – ran a motor vehicle registry office in Alberta, but with the ‘unprecedented new normal’ of Covid-19 came a cavalcade of service problems for customers and companies alike.

When the Vander Meulens noticed an opportunity to better resolve lineup management issues, they decided to launch beta testing on WaitWell in August 2020. 

“Through the pandemic, we knew that we had the important role of providing an essential service while doing so in a safe and effective manner,” Steve began. “The solutions that were out there weren’t exactly fit for the style of business that we ran, so we built our own and had the good fortune to commercialise that to neighbouring markets.”

On the topic, Shannon said: “Immediately we realised once you digitize the way that people enter a queue, you have an opportunity to really digitally transform the entire customer experience from the time they join the queue until after they’ve left the building.”

The pair met Bryan and Jacques at an investment summit hosted by Startup TNT (WaitWell won the investment, by the way) and were struck by the pair’s unparalleled experience in the startup world, as well as their shared determination for the company to exit within Steve’s intention of a seven-to-ten-year timeframe.

It’s this “emotional investment” in the WaitWell journey that Shannon credits to the company’s success to date, crediting the pair as a “sounding board” for their questions and concerns as they worked to build WaitWell as a leader in queue management software.

“Although we’re experienced entrepreneurs, we are not experienced in the startup world, and so a lot of times we run into hurdles, challenges and questions,” Shannon said. “Bryan and Jacques have also been really helpful in providing connections for us. They’ve done a lot of introductions where necessary.”

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