In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Stephanie Choo, Partner and Head of Investments at Portag3 Ventures. Portag3 Ventures is a venture capital firm that specifically invests within the fintech financial technology space. Stephanie Choo explains what venture capitalists are, how to approach them, what they are looking for, and how to know if you are someone who should be taking on venture capital.
Episode Highlights:
● 01:14 – Stephanie Choo describes what Portag3 Ventures does.
● 03:03 – What is a venture capital firm?
● 05:38 – What would make a business not be a good fit for a VC?
● 09:31 – Portag3 Ventures are looking for 10x returns or more on their investment.
● 11:18 – Stephanie talks about the automated pizza business play.
● 13:05 – What are VCs typically looking for in businesses to show them to convince them to invest?
● 18:42 – Stephanie explains what they want to see in a business’ team and their innovation.
● 23:38 – Be able to prove what is proprietary, protected, or defensible about your product or service.
● 25:30 – When a VC is ready to invest, what is a term sheet, and what goes into that?
● 28:12 – What are other misconceptions about venture capital firms that businesses should be aware of?
3 Key Points
1. Venture capital firms are sources of capital for certain early stage businesses that are very high growth that are generally technology orientated and scalable, typically with a venture portfolio approach.
2. Venture capital may not be for you if you are a cash-generating cash-flowing business that is not particularly scalable and not growing by 100% or more a year that doesn’t have an exit
strategy and isn’t planning to return capital in about 10 years.
3. Most venture funds look at the strength of a company’s team, why now is the right time for this business, and what problem does the business solve.
Tweetable Quotes:
● “Portag3 is a global fintech-specific venture fund. We invest across seed Series A and Series B. But, we’re really looking for companies in the fintech space that are going to transform the future of financial services.” – Stephanie Choo
● “We typically invest at the stage where companies have what is called ‘early market fit,’ which means they have early traction. They’ve got customers. They’ve got some revenue.” – Stephanie Choo
● “They are investing on what is called the ‘power law basis,’ which is a very small number of your portfolio will end up generating 90% or plus returns for you.” – Stephanie Choo
Resources Mentioned:
● Facebook – Jason Pereira’s
● LinkedIn – Jason Pereira’s
● FintechImpact.co – Website
● jasonpereira.ca – Website
● Linkedin – Stephanie Choo’s
● P3vc.com – Website Portag3
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