The Ins and Outs of Raising Capital
Breakfast Learning Series
Growth capital. These are two words that every entrepreneur who is hungry to grow his or her business must eventually contemplate. It’s intimidating. Overwhelming. “What are the pros and cons? How do I do it? Where do I start?”
As part of The Entrepreneurship Society’s breakfast learning series held in partnership with Rogers and Wildman & Associates at Duff & Phelps Corporation at 333 Bay Street on April 6th, we tackled every aspect of growth capital with an in-depth panel discussion moderated by Executive Coach and 20-year Bay Street veteran Sara Knapp. Attendees included owners who have bought businesses and are operating them, owners who are looking to acquire either a competitor or a capability to scale their business and business owners who have sold previous businesses.
A common theme: the importance of finding a good partner. Whether he or she becomes your co-founder, investor, advisor, or mentor/coach, the key is having that additional level of support to enable you to reach your business targets and professional goals.
Read on for more personal insight and advice from our panelists below:
Phil White, co-founder of Cervélo Cycles, pioneered the aerodynamics of time-trial bikes along with his partner. Together, they built a world-class brand that has accompanied athletes around the globe through victories at major events such as Tour de France.
Everyone knows that entrepreneurial path is everything but smooth, and Phil’s journey was no exception. Founded in 1995, it became increasingly difficult for Cervélo to raise capital given the relative unattractiveness of the business during the Dot-com era. Nonetheless, Phil was able to build a great business and ended up selling it to Pon Holdings, a Dutch company, in 2012.
For him, the magic lies in being able to figure out what do to when you have nothing. In other words, as an entrepreneur, one ought to be careful with every dollar being spent. He also advises all entrepreneurs to find a really good advisor — one that will be able to point out all of the options that are on the table.
After realizing that neither McKinsey nor Morgan Stanley were career paths he desired to pursue, Robert Cherun attended Stanford Graduate School of Business to re-calibrate his life. After finding his area of interest through a course project on Canadian SMEs, he raised money from old colleagues and professors.
Robert co-founded Auxo Management LP, a privately-held investment firm. He is currently CEO of UCIT Online Security, a Toronto-based security business focused on providing 24-hour live video monitoring, which is part of Auxo’s portfolio.
He shared with us some of the key elements that have allowed him to build great businesses:
- Control — He encourages entrepreneurs to carefully study the fine print. Not paying close attention to this can cost anyone the ability to run their business as desired.
- Focus — When running a company, one has to learn to say “no” to things.
- Team — Goes without saying, having a strong team will ensure you have the right people to go about your journey.
- Budgeting — When running a business, being able to run scenarios and set milestones will keep you focused and ready for the unexpected.
- Advisors — Finding someone who you can turn for advice is a must.
William Sutherland joined Kilmer Van Nostrand in 2015 as Vice President Investment Services, bringing with him over 15 years of experience in finance, particularly private equity, venture capital and infrastructure platforms. At Kilmer, he is focused on the development of new platform investment opportunities for the private equity business.
William walked us through a sample term sheet and contributed his perspective as a seasoned investor. He was quick to point out that, with term sheets, there are no rules. Every term sheet is different and often the first term sheet drafted for a specific deal is rarely the version will see at the end. Despite there being multiple iterations, he assured everyone that everything is negotiable. For this process, he strongly advises entrepreneurs in doing their own due diligence in terms of the investor’s profile and while paying close attention to their reputation.
With every business and every investor being different, he encourages everyone to carefully reflect about out what they want out of a deal and to determine what they are willing to give up. Do you simply want capital? Are you seeking for advice and expertise? Answering these questions will enable you to identify the type of investor that aligns with your profile. Additionally, you will be in a much better position when negotiating your next deal by ensuring a clear alignment of interests between you and the investor.
Drawing from over 20 years of experience as a serial entrepreneur, Karim now coaches executives to help them achieve the growth they desire. He recognizes that the strength of a CEO comes directly from his or her team, and that building a strong team can be a tremendous challenge — one that is easily be overcome with the help of a coach.
“As a CEO, what you believe is not necessarily what others will believe. You may feel lost at times, but in order for you to drive your organization and reach your goals, you must set a clear path.” To do this, Karim establishes that coaches are there to help you see the things that you cannot see; everything in your blind spot. This advice can be a game-changer.
Join The Entrepreneurship Society on May 4 for our next event — Take the Quantum Leap While Managing the Risk That Comes with it. Dan Desmarais (Co-owner of Cantactix), John O’Connell (Chairman and CEO of Davis Rea), Libby Wildman (Founder of Wildman & Associates) and Colin Walker (Managing Partner of Crosbie) will lead the fireside chat as they share their experience and walk us through the process of how to manage risk as an owner while scaling your business by determining what your company’s quantum leap is. Get your tickets HERE.
We will be hosting another Owner Dinner in the Ted Rogers suite in June. Our Owner Dinners are invite only. If you fit our criteria and are interested in an invite, please feel free to reach out.