Inovia’s first Discovery Fund backs the next generation of VC funds in their mission to identify and nurture high-potential startups at the pre-seed and seed stages. We sat down with these emerging managers to discuss their vision, their approach, and what they look for in a pitch.
During 12 years as an operator and investor in the Canadian tech industry, Alex saw first-hand how the dearth of institutional pre-seed capital weighed on entrepreneurs. Inspired by the U.S. culture of pre-seed investing and aiming to address a gap in the Canadian market, he launched Northside Ventures in February 2023 with a targeted total fund size of US$15 million.
Alex retained the founder-focused approach he followed in his previous role as head of the Canadian practice of European multi-stage VC firm Global Founders Capital. Launching his fund gave him additional autonomy to build the Canadian-centric brand he wanted, prioritizing artificial intelligence, B2B SaaS, fintech and cleantech.
Based in Toronto, Northside Ventures seeks out exceptional Canadian founders, with unique insights from experience in the U.S. and Canada.
WHY DID YOU CHOOSE TO FOCUS ON THE EARLY STAGES OF INVESTMENT?
I love working with founders, and at the pre-seed stage, when barely anything exists and there’s not much to diligence, so the most important aspect is the founder. I look for very strong founder-product-fit and founder-market-fit. I like working with people who are fast thinkers, have big visions, and excitement about the future. I will work with great founders across almost any category but have a core focus on categories with multi-decade tailwinds, including AI, B2B SaaS, fintech and cleantech.
TELL US WHAT MAKES YOUR FUND UNIQUE
Only some institutional pre-seed investors in Canada have experience working at an international multi-stage fund. I bring a deep network of customers and follow-on capital relationships to Canadian founders at the early stage.
Operationally, I take a unique approach to identifying companies through my outbound sourcing program, which I use to identify exceptional Canadian founders across North America. I screen 80 to 100 companies weekly, and 3,000 to 5,000 companies yearlythrough this process. So far this year, I’ve invested in seven companies.
WHAT HAVE YOU LEARNED THROUGH FAILURES OR TRIALS AND ERRORS?
I’ve backed a few companies that didn’t work out and the No. 1 learning I consistently return to is to invest in great people, because when things go wrong, you need to trust in the founder’s ability to steer the ship. A company can rewrite every line of code and pivot strategies, but the founder is constant at the end of the day..
Besides the founder, I’ve learned that market timing is the most important driver of startup success;this is often overlooked when founders choose which business to build. You can have an ‘ok’ product, be in the right market, and still win. But it will be very hard to succeed if you have a great product and the market timing is wrong.
WHAT GETS YOUR ATTENTION IN A PITCH?
I index heavily on the clarity with which a founder articulates their business idea and vision. I invest time to understand a founder’s journey, including their experience, unique insight and the ideation process. I spend time getting to know a founder’s ambitions and motivations, why they will be relentless, and why they’re the best founder in the world to achieve the vision. When there is no product or revenue, these qualitative questions are increasingly important in assessing a company.
WHAT IS THE ADVICE YOU MOST OFTEN GIVE TO FOUNDERS?
In this market it’s important to be as efficient as possible until you find product-market fit, and be extremely obsessed with your customers. Find five to ten customers and iterate on the product until they are delighted before scaling beyond those ten customers.
Visit our website to learn more about the mission and leaders of other exceptional emerging managers in our portfolio: Boon, Front Row Ventures, Garage Capital, Luge, Maple, N49P, Roar Ventures, The51, and Two Small Fish Ventures.