TechNL talks about growing tech ‘ecosystem’ in high-energy event
Posted on February 12, 2021 | Ashley Fitzpatrick | 0 Comments
With the monster acquisition of Verafin by Nasdaq for US$2.75-billion, there is the expectation of new investor interest in Newfoundland and Labrador, and certainly new energy in the region. There is also one admission techNL board chair and Clear Risk founder Craig Rowe has no hesitation in making.
“Not everybody’s going to be a Verafin,” he said, at the start of a day-long association event online Thursday. “But that’s not the only metric for success. Far from it.”
Rowe said if the province channels the energy and keeps launching and encouraging small and medium-sized companies then the big surprises, the “unicorns,” will surely come along. And regardless, with steady growth of the ecosystem, there will be solid successes in the meantime.
TechNL’s day-long, high-energy event saw reiterations of the idea that local growth requires continually telegraphing what’s unique about the local environment, including the business environment that will allow founders to launch and companies to build.
Hosts and panelists suggested growth also demands more skilled immigrants, continued political engagement and financial support for post-secondary programs that feed in talent, foster entrepreneurs and kickstart early-stage companies.
The techNL event was backed by participation from three, federal cabinet ministers open about their eagerness to build on Verafin’s win. Newfoundland and Labrador’s representative in cabinet, Seamus O’Regan was host and moderator for the day, while Minister of International Trade and Minister of Small Business Mary Ng joined as a morning panelist. Innovation, Science and Industry Minister François-Philippe Champagne added pre-recorded remarks.
Ng emphasized her role as, “the sales and marketing person for Canada’s companies to the world.”
“From the outside looking in, there is something really special. And what do we need to do to make more of it?,” she asked, repeatedly messaging broad support.
Ng said COVID-19 has not disrupted the work of business relationship building or halted virtual trade missions to the European Union and South Korea. She expressed general desire to foster investor-to-business opportunities for companies based in Newfoundland and Labrador looking for new international partnerships as they are ready.
“I don’t really think that there’s anything that stands in your way except, I’ll call it, the sense of wonder to go for it,” added Ng’s special advisor, Sheldon Levy, similarly cheerleading.
In a later session, techNL CEO Paul Preston said finding suitable talent for growth has been, “the biggest issue, the biggest challenge our companies have faced.” It’s an oft-heard refrain, but one of increasing urgency given the majority of techNL members answering to a recent internal poll said they plan on expanding near-term, adding to their workforce and moving into new markets. Preston said continued growth will require finding ways to continue to support Memorial University of Newfoundland’s (MUN) Centre for Entrepreneurship and the Genesis Centre.
“We’ve got a support system here in the province that’s better than ever,” Preston said.
Pelorus Venture’s Chris Moyer, joining as an investor panelist, said the general attitude and the interconnectedness of the Newfoundland and Labrador start-up and investment community should continue. He said things like “a willingness to educate young entrepreneurs” needs to continue.
“I think we need to continue to build the ecosystem,” Moyer said. “It’s got the right pieces. But if some of those pieces aren’t there, it will slow down.”
The panel actively encouraged any would-be company founders and early-stage-company leaders to dive in, to grab the sense of new opportunity, to get to know support programs and their local investors and see the steps to financing their growth.
BDC president and CEO Michael Denham said there has been “significant” growth in the Newfoundland and Labrador tech business environment in even just the last five years.
“The key thing (…) is for all entrepreneurs to recognize there is kind of a financing supply chain. And they go from angel (investors) to pre-seed (funding), to seed, to Series A,” he said.
“Whatever we can do to facilitate the connection amongst angel investors in the Atlantic provinces, I think would help,” he added.
Denham said companies need to be exposed to their financing options, but also make a point to speak to potential investors long before funding rounds are being decided on. The more connections made, the more support is likely to land, assuming the company is attending to the day-to-day.
“I think we have to acknowledge the progress we’ve been collectively making in Newfoundland and Labrador,” he said.
With 15 years in venture capital under her belt, Nicole LeBlanc was focused on the province and is currently an investor with 2150 (focused on urbantech and sustainability, based in Europe). Joining the investor panel, she said companies don’t need to pick up and move physically closer to financing, but do need to offer a unique or particularly strong operation if they’re going to chase the Verafin dream.
“As you start to grow and scale your company, it’s really important to focus and know your customer profile and really start to own an area, and investors around the world will start to flock to you. It doesn’t matter where you are,” she said.
She suggested greater diversity – in gender, in ethnicity and more – can help businesses, but also expand the investor pool. As an advisor to Sandpiper Ventures, she applauded Newfoundland and Labrador-based businesswoman Cathy Bennett for being a driving force and co-founder with the all-woman vc firm. Sandpiper is investing in women-owned, “future-fit” companies.
Angel investor John Phillips joined the investor panel and repeated the call for adding to the existing capacity at Memorial University of Newfoundland, in electrical engineering, computer science, sales. Phillips would repeat the call for increasing student numbers, suggesting the educational offerings can also help with sector diversity.
“I think it’s a huge opportunity for Memorial to make a big name for itself, and that will attract investors because they want the best and brightest in their portfolios,” he said.
Nasdaq president and CEO Adena Friedman, who happens to be based in Washington, joined on the day as the star, guest speaker. She was asked how Verafin ended up on her radar, with the answer driving home the idea of connections reaching beyond local geographic boundaries.
“We’ve never really been as wedded to location as maybe other companies have because there are great technologies that allow us to stay connected,” she said.
Nasdaq has, she said, beyond just Verafin, sought out companies that can serve emerging internal needs, with loyal in-house talent, and then invested wherever those businesses are based.
“For us it doesn’t matter where it’s located. It’s all about what their capabilities are and who they serve and do they do it well,” she said.
“And what’s great about Newfoundland and Labrador is you’ve got the university there… I think Verafin has done a spectacular job of the relationship with the university to bring in and draw in great talent, grow them within the organization. And we love that.”
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