Based in Toronto, Laura Lenz is a Partner of OMERS Ventures leading the fund’s investment activity in Canada. Laura has over 15 years of venture investing experience, including prior roles as a Partner with Generation Ventures, an Investment Director with MaRS Investment Accelerator Fund, and a Principal with EdgeStone Capital Partners. Laura started her career with BMO Nesbitt Burns as an investment banker focused on media and technology companies and extended her public market acumen into private equity investing for the firm with roles in Toronto and New York City. Throughout her career, Laura has focused on understanding and investing in Canadian emerging technology companies. As an active investor, Laura benefits from a wider aperture and applies a critical lens to metrics, team, financials, and strategy to ensure that a portfolio company is well positioned for the next stage of growth. With discipline, Laura strives to achieve alignment at the Board level, with company leadership, and with other VC stakeholders and investors.
Welcome to the team, Laura! Tell us a little about yourself.
I was born in New York City, but have called Toronto home for the last two decades. I currently live in Toronto with my husband and three energetic boys that keep me on my toes. My husband and I sometimes think parenting is like the “J-curve”. I have been extremely lucky to have amazing role models, such as my father, and mentors throughout my career and I believe passing that mentorship along is very important. I am a martial arts enthusiast, achieving my black belt in Karate in high school and my black belt in Tae Kwon Do last year. I continue to train and have a kickboxing bag at my house. Interestingly, I can tie back my affinity to technology to my early training days of Karate. As a student of Karate, I was exposed to the Japanese language. I fell in love with the beauty of the language and the culture and studied Japanese during high school and university. It was over a summer job in Tokyo working with Japan’s telecom company Nippon Denshin Denwa (NTT) that I first heard about Voice-Over-IP. Of course, now VOIP is pervasive in business and consumer applications, but in 1997, it was a very innovative, cutting edge technology. When I graduated from Ivey at the University of Western Ontario on the Dean’s Honor List, I joined BMO Nesbitt Burns investment banking and immediately gravitated towards the technology group of the bank. Two decades later, I am still passionate about technology and building great companies in Canada.
You have had an incredible career to date as a Canadian venture capital investor at EdgeStone Capital Partners, MaRS Investment Accelerator Fund, Generation Ventures, and now OMERS Ventures. What are some of the biggest changes you have seen in the Canadian VC and tech ecosystems since you began investing?
When I first started investing at EdgeStone, you could count the second-time entrepreneur on one hand. I remember we stirred up controversy in the local market by offering a second-time entrepreneur common shares rather than preferred shares. Today, there are more second-time entrepreneurs in our ecosystem which is wonderful to witness. When I started at the IAF in 2011, there were minimal seed funds in Canada which hampered the local founder’s ability to take a risk and launch a new idea. Now, the seed- financing stage is very well funded and approximately nearly 200 companies are created each year in Canada. I would say the same about late-stage capital as well. Previously, a successful series A company would have to go south of the border to raise a Series B or beyond. It was perceived as a badge of honour to receive a US capital infusion. Now, more patriotic Canadian entrepreneurs are determined to keep their company owned by Canadian shareholders and we now have the capital to achieve that goal. Due to the political situation in my birthplace, Canada is retaining and attracting top talent in technology and big tech firms are opening offices in Canada. For the first time in a long time, Canada now has a “brain gain” and this is significantly helping the Canadian ecosystem as companies scale up. I think these four factors are all contributing to the realization that we can, and have, built great companies in Canada — there is an increase in “narwhals” or unicorns and an increase in exit values. OMERS Ventures’ portfolio definitely illustrates this with Shopify, TouchBistro, Hopper, HootSuite, I could go on.
What are you interested in from an investment perspective?
From an investment perspective, I am interested in The Future of Work. It’s an existing OMERS Ventures theme, but also a domain that Canada has expertise in — Coveo, Dayforce, Taleo, TribeHR, Varicent, and Workbrain are examples of that. I am also interested in Human-Augmented AI as the hype of AI a few years ago has yet to translate into broad commercial adoption. I believe that we are missing the in-between step of human involvement to teach common sense, reasoning, and creativity such that we can trust and rely on the AI of the future. And based on a couple of investments that I made at my previous fund I am also interested in the Future of Retail Services. I’m not oblivious that Amazon and Shopify dominate the market, but as humans, we are sensory people that crave some form of human interaction which is why you see QSR revenue growing at a record pace and why luxury brands continue to survive.
From an OMERS Ventures perspective, we will be focusing on a first cheque at the Series A to Series C stage in Canada where we will lead or co-lead a financing.
With a focus on mid-stage capital (Series A-C), what are some of the most common challenges or hurdles you see from startups making the leap from Seed to Series A? Any tips or resources to share?
I have a lot of respect for all founders who are trying to build a business without a well laid-out blueprint for success, so I don’t want my comments to be perceived as too critical. There are a few common challenges that I see companies make when trying to leap from Seed to Series A. First, not developing or hiring the right talent for the next stage of growth. The team and the skillset that got you to here won’t necessarily lead you to there. This is a hard learning for founders who want to recognize the value and dedication that some early employees provided. Second, founders sometimes assume that they have found product-market fit based on a couple of customers buying their solution. Management teams and the board should be asking “are these typical customers or outliers that we have built a business around?”. Third, some founders who are strong at selling aren’t great at converting to a delighted customer. Management teams and the board should be asking “is our product team and customer success team delivering what we are selling? Is our churn high, and if it is, why are customers churning?” Another common challenge that I see is financial discipline isn’t as robust as it should be. Leadership should be asking: “what is our fully-loaded gross margin and unit economics?” “What is our pricing strategy and does it align with the perceived value that we are delivering?” And the final challenge that I will mention is the belief that it is easy to transition to the enterprise after a company has been successfully selling into the SMB market. These are very different markets that require different marketing tactics, selling strategies, product specifications, and customer success.
Are there any deals that you passed on that you wish you didn’t? If so, why did you pass and why do you regret it?
The nature of venture capital investing is that we hear approximately 250 pitches before we commit to investing in one. So yes, I have passed on many deals where I didn’t see the entrepreneur’s vision following the same trajectory that they did. I think I’m a pretty genuine person, so I always attempt to decline the opportunity in a constructive way, providing feedback on how I think the business might succeed. You ask which deals I’ve passed on that I regret? Well, I believe that life is too short for regrets. And frankly, putting anything down on paper here may unwillingly impact some entrepreneurs. I can say, ironically, that I passed on investing in TouchBistro in 2014 (Ironic note: Since June 2018, OMERS Ventures and OMERS Growth Equity led TouchBistro’s Series D and Series E financings, respectively). The business looked very different back then. I think an important lesson investing in a small market such as Canada is that companies can evolve or pivot to find their “A-ha moment” and it’s always beneficial as an investor to stay close.
What book are you reading right now?
I just spent four gloriously relaxing days in Arizona by myself as I transitioned to OMERS Ventures, so I read “Girl in the White Kimono” by Ana Johns, “The German Midwife”, by Mandy Robotham and “The Only Woman in the Room” by Marie Benedict. Generally, for easy reading I seek out historical fiction novels with a female protagonist. My recent favourite business book, is “Never Split the Difference” by Chris Voss. Chris was previously an FBI hostage negotiator and the book illustrates some interesting stories about hostage situations and perspectives that can be applied to business situations. I gave it to all the CEOs of my previous portfolio companies last holiday season.
Finish this sentence: The future will be…
“positive if individuals continue to believe that the power of change is in their hands”.