Interview with John Ruffolo of OMERS Ventures: Leadership, talent, and startup growth. Part 1 of 2.

John Ruffolo is the CEO of OMERS Ventures, the venture arm of OMERS, one of Canada’s leading pension funds. OMERS Ventures invests in early to late stage companies in the Technology, Media, and Telecommunications sectors. Some of OMERS’s investments since 2011 have included successful and well-known companies like Shopify, Hootsuite, and VisionCritical. Prior to joining OMERS in 2011, John was a partner with Deloitte, and before that was a partner with Arthur Andersen LLP.

This interview delves into issues of leadership and talent at high-growth startups. This is Part 1 of 2. Part 2 will appear next week.

Q: What were you like as a youngster growing up, and what milestones, significant events, or critical learning experiences stick out for you, that helped shape who you are today?

A: The biggest influence was that my parents emigrated from Italy in the 1950s. Although I was born in Canada, I was born and raised in an environment where you are taking massive risks from the beginning. By that I mean leaving family/friends and everything behind in your country of origin, to start a new life. From the early part of my life, I saw the benefits of taking risks in your own life.

Tell us about your path to OMERS and Venture Capital. How did you get to where you are today?

The critical thing for me was that I went through the professional services route. When I graduated in 1988, success was not predicated on being an entrepreneur, but rather on being a professional, and that’s what you were taught. The great positions were being a lawyer, doctor, or accountant. I was shaped to go in that route.

Three years after I started working full-time, Canada slipped into a terrible recession in 1991–1992. It was deep. At the time I was working for Arthur Anderson as an international tax specialist. Because of the recession, there were no transactions, nothing to work on, and I was getting bored. The frustrating part for me was I really wanted to get far more actively involved with entrepreneurs and large corporations, to understand the businesses they were in.

At the time, I was 25 yrs old, and it was very difficult to break into any industries, and establish credibility where there were already long-term advisors in place. Except one: a small industry called technology. None of the other partners, not a soul, was involved in that industry; they didn’t like it or understand it. It was a completely opportunistic thing for me to do. Everyone around me was very supportive, but they also said ‘sure go knock yourself out’.

I worked in this new area for three painful, long years. But in 1995, the magic started to hit. The turning point was when the Mosaic browser was rebranded into Netscape, and the consumer internet was born. Then all of a sudden this crappy little practice that I was managing for three years, that no one cared about, exploded. Now we’re generating millions and millions of dollars of fees. And I really got hooked.

What did some of those other partners say, the ones who initially encouraged (or maybe teased) you?

Well they thought it was a fluke. It was frustrating. There was one person who supported me and gave me air cover. But a lot of people said ‘it’s nothing anyway, so go bang your head against the wall and let me know how you do.’ But that situation wasn’t that different from when I came to OMERS in 2011 to build a venture fund, when one didn’t exist — people again said ‘yeah knock yourself out and see how much money you lose.’

And then how did you transition to Deloitte from Arthur Anderson?

Arthur Anderson merged into Deloitte when Anderson was hit by the Enron scandal. By the time of the merger, although I had been trained as a tax person, I had held a number of leadership positions, locally, nationally, and globally, running the technology business around the world.

The previous ten years was my training ground, not necessarily operating a technology business, but being able to extract what practices worked best for entrepreneurs, and what practices weren’t as good. It gave me a unique pedestal to watch and observe. I learned from the best. That went on until 2010. In total I had a 20+ year career advising all of the leading players, from startups, to large multinationals, to venture capitalist. That was my training.

You lead an impressive team at OMERS, and have made some outstanding investments (e.g., Hootsuite, Shopify, VisionCritical). Describe your approach to leading others and building a culture of success at OMERS?

I think the best way to describe it is that the team here believes that they’re on a mission. The mission is predicated on the future of Canada. We are one of the actors who help support some of these great entrepreneurs. Just today for example, we announced our investment in League. The team here takes that role very seriously. We hire people from a cultural perspective who share that passion. We are here to make money for our pension investors, of course. But if you can also change the world at the same time, how cool is that? That’s what really drives the desire to find the best companies, to seek out the best entrepreneurs, because we have a joint mission.

What traits do you look for in leaders of companies you’re considering investing in?

We have a number of factors that we look at. I would tell you thought that the one common trait that seems to correlate to the greatest success, is passion. We invest in entrepreneurs that have the same passion to change the world as we do. They’re facing a problem, there’s something that happened to them, something that is bugging them, and they will do anything to build a solution to solve that problem. It’s not being driven from a monetary perspective.

And in their journey, 100% of the time they hit big obstacles. Their ability to pivot around those obstacles is critical. When someone is passionate about solving that problem no matter what, there’s nothing too big that can get in their way. And that’s what we really look for. So when looking at entrepreneurs we ask ‘why are you driving this solution, and what is that underlying passion that you have to fix that problem?’ That is the single thread.

In Part 2 of this interview appearing next week, John talks in more depth about leadership and talent issues facing rapidly growing startup companies.