Earnest Sweat 00:00
Welcome to swimming with alligators the VC podcast from the LP perspective, with your host, Alexa bins and earnest. Are you ready? Let’s dive in on today’s episode. We have the pleasure of speaking with Paula Cruikshank. She is the Senior Vice President fund investments at BDC capital is the investment arm of the Business Development Bank of Canada. Today, she’ll share with us the unique venture ecosystem in comparison to the US and Canada. Also she’ll share addressing late stage capital scarcity in Canada, and the wave of quality IPOs coming in 2025 and so with that, we welcome Paula, thanks for joining us on the show.

Paula Cruickshank 00:50
Awesome. Great to be here. That’s a great intro, earnest. I’m not sure if it’s going to be IPOs necessarily, but we certainly are looking forward to some exits. There’s some fabulous growth that’s happened in some Canadian tech companies over the last while. So we’ll see. We’ll see where it goes.

Earnest Sweat 01:08
We’ll see. I wanted to keep them on a cliff hanger of like, Oh, I’m definitely listening, because there’s gonna be ideas, but I understand. So first starting off, you know, because the majority of our audience and guests have been from the US venture asset market. Could you tell us a little bit of the differences between the US and our neighbors up north?

Paula Cruickshank 01:34
Yeah, absolutely happy to do that. So just as a preface, I’ve been getting my way around the ecosystem in the last little while. Basically, I was an early participant in the funds team about 10 years ago, and I’m really excited to see the progress that’s happened in the Canadian ecosystem. But the first thing we have to talk about in terms of the difference between Canada and the United States is size. So I will use a statistic that’s relevant to me in the funds world. So I think you had another Canadian on your visitor list, but one that I recall, which was John rider from mock RBC. We talk about about 9000 funds in the US and in Canada, there would be sort of 300, maybe pushing 500 if we include smaller funds. So that’s not your 10% rule. A lot of times Canadians talk about volume, you know, Canada to the US. And sometimes we can use that figure, that 10% you know, there’s three, 50 million Americans and there’s about 40 million Canadians. So we could use that, but in this case, we can’t. The ecosystem is at its early stages. It’s called emerging in terms of, you know, folks who classify these things, and I really love and we can talk about it a little bit more, but I really love one of my fellow Canadians who moved to the valley comparisons, and that’s Alexander Lazaro. So he wrote a book about innovation, and he talks about life at the frontier. So we are a frontier ecosystem, and so it takes longer to raise money. Folks raise less money. Getting to Series B is very difficult. Finding talent is a challenge, and there’s a lot of implications for this kind of an ecosystem, but it’s exciting, and the progress we’ve seen is really significant. In fact, some of our research at BDC is suggesting that we’re actually outpacing the US in terms of growth, and that’s very exciting. Of course, our big breakout year was 2021 as it was for many people, and that allowed us to spend about 6% of our GDP on venture, but more typically, it’s closer to that 3.3% and so it looks a lot like the UK. So hopefully that helps to give you some of the dimensions. So. And

Alexa Binns 05:00
When, what’s the LP network consist of, is there a lot of foreign capital coming in? Or so there

Paula Cruickshank 05:07
actually is some foreign capital coming in. One of the things I like to talk about is the fact that Canadians are really great at investing in the inputs in their ecosystem, but the outputs lag. When we talk about commercialization, you know, scaling companies, patents, those types of things, they lag. But there’s a ton of money in R and D. There’s a ton of good support for the innovation ecosystem. So that is a really great place to start, and we have seen some folks come in from around the world and really benefit from all those investments. But I would say that there is, continues to be a lot of government support of the ecosystem. So we have pegged this at around 40% in the last decade. It’s diminished so more and more players are coming in. But of course, we would love to see more international LPS in Canada, but we do have provincial players that are supporting the ecosystem, as well as BDC, which is a federal player, but it’s definitely improved over the last decade, and we’ll continue To help support it as long as we can

Earnest Sweat 06:42
and another key player within any venture ecosystem is the corporate kind of venture capital players. What’s been the experience and trends there in Canada?

Paula Cruickshank 06:57
Yeah, I’m really glad you brought that up, because I think this is one of our biggest opportunities when it comes to increasing the number of LPs, so that the statistic that gives us a little pause is only About 6% of the large companies in Canada are formally investing in venture So believe it or not, there are some very large companies in Canada over a billion dollars. There’s a large variety of companies that have over a billion dollars in revenue, much more established. They’ve been around for a while, but they are not necessarily turning around and using venture in a strategic way, which is to be on top of the trends to potentially identify opportunities or pathways for the future. And so we compare that, of course, to the US, which is the whole world is comparing themselves to the US. Let’s be clear. So at 40% corporate investment, that is something to really strive for. And you know, even if that’s exceptional, 6% is a long way from there. So I think we can start to move forward. And what we really need is not so much the number to increase, but for folks who participate in the venture ecosystem to be consistent, to continue to be there year after year.

Earnest Sweat 08:42
Paul, what? Why do you think there’s that big of a gap? Given that, you know, talking to a lot of emerging managers and other LPs all over the world, we’re seeing a significant uptick, specific, specifically from Asian corporates looking to invest in venture capital, and US venture capital, and not just the kind of brand names those, although obviously there, but also emerging managers just to get the strategic benefit of knowing what’s going on. Why do you think there’s a gap from Canada when it’s right next to the US?

Paula Cruickshank 09:18
Yeah, I think it’s a really good question. I think we need to dig into that. When I came into the team, we actually identified a senior member of the team who was going to look more closely at this. We also participate with the global corporate venture organization. So I think we need to dig into it, but I suspect it goes hand in hand with the fact that technology is only now becoming a significant part of our economy. So of course. Of course, we’ve been a Resource Based Economy for a long time. There’s a very significant opportunity to bring technology to those sectors, and those companies are aware. But I think that’s a piece of it. So now we’re pushing in terms of technology 10% of the Canadian ecosystem, or, sorry, the Canadian environment would be closer to tech. So that’s a piece of it. But also, venture is mysterious, right? We don’t always know what it means. And so I think we could do more about clarifying it, taking out the mystery, showing the benefit, so those are some of the things that we’re going to do going forward.

Alexa Binns 10:55
And you had mentioned that in a more peripheral way, you’ve been involved in this BDC capital sort of development in the past 10 years, but now you’ve got an official role on the fund investment side. Can you take us on that journey? A little bit of you know what? Why did you decide to take this gig now? What’s exciting you right now that’s that it’s sort of been sort of coming to the surface in the past. Yeah, absolutely.

Paula Cruickshank 11:25
So maybe it was that mystery around VC, but I’ll tell you that 10 years ago, I got the opportunity. My background is in structured finance, so I came to the BDC right after, well, really, during the financial crisis. So securitization was not particularly well understood by the organization. As you can imagine, it was very opaque, because BDC supports small and medium sized businesses, and they are not typically using securitization as a financial tool. So I came and worked with a team to grow the Canadian asset backed securities market. In fact, we were really trying it, trying to help it recover from the shock of the financial crisis. When that work was under control, we had basically done an enormous amount of lending to some of the players so I was able to step back and look around the organization and see what might be interesting. And one of those places was venture capital. So in 2013 2014 right after my mat leave, actually, I came back to BDC and spent the majority of my time in the funds group. And this was a really pivotal, pivotal moment for the venture capital ecosystem, because it was when the Conservative government, at the time decided to launch an official venture capital action plan, where they would invest a certain amount of money into the ecosystem alongside private sector players and help improve their returns, reduce their risk and create participation. Well, that program was pivotal, and it had successors from the government of the day, from the Liberal government as well. And so for the past 10 years, we’ve seen those programs be launched periodically to really change the environment. So I was in the team right when it started, and it was a really interesting moment for a venture in Canada and I was doing the work that the team couldn’t do because they were so involved in helping our partners and within the government design the program and roll it out. So from that moment when I made my first investment. I was hooked. And very interestingly, it was an investment in a fund that was coming to Canada from the US, and they saw the opportunity that Canada represented in terms of commercialization. They’re a life sciences fund, and they saw all this great research, and I’m very excited to say that when I came back 10 years later, their performance was top notch, and they are at the top of our LPs. So with the i. Partner who’s living in Canada, the Canadian opportunities they sought, plus the global opportunities they’ve done incredibly well. So there you go. Once you get that taste of a successful investment, it can cause you to hang in. Yes, for sure.

Alexa Binns 15:19
No, I think people have gotten wise. They think this, this additional government funding for my portfolio companies is pretty red,

Earnest Sweat 15:32
not bad. We should

Alexa Binns 15:33
take more advantage of this. Yeah, for sure.

Paula Cruickshank 15:36
I mean, there’s no question companies need to benefit from that. They need to take advantage of the government support that’s there, but it’s never enough. They have to figure out how they’re going to make those sales, how they’re going to grow that revenue, and that is one of the disciplines that I think we could benefit from more in Canada, it’s sales expertise, right? Sales expertise and knowing how to scale a company. So I’ve seen the expertise in the 10 years while I was in the bank’s core business, I’ve seen it increase. There are many more founders who’ve had a successful exit. There are many more people who’ve scaled companies. So the talent has definitely changed.

Earnest Sweat 16:36
since rejoining the team, what’s your vision and priorities for these next 10 years? Well,

Paula Cruickshank 16:43
it’s certainly a moment where we’re pausing and reflecting from a BDC capital perspective, having seen improvements in IRR, having seen improvements in in the dollars allocated to Vc, having seen the growth in the number of established funds, any kind of metric you want to take a look at, we’ve seen it improve over the last 10 years. So we want to make sure that happens for the next 10 years so it’s really about figuring out where the market doesn’t need us anymore and where they need us to continue to support so what would we like to see over the next 10 years? Certainly attracting more LPs, I would say we are proud supporters of diversity in our funds. So we have, you know, funds that are women led, indigenous led, black LED, we would like to see more of that, so that it translates to companies that are indigenous led, black LED and women led. That’s certainly a success factor. I would say that we want to be able to continue to attract more private capital. So we’re certainly having discussions about what is appealing to private sector investors such as CDC. Certainly pension plans are making headlines in Canada in terms of how they see the innovation economy. So all of these things are what we’re thinking about. And in the short term, I would say that what we want to do is support Canada’s best funds so that they top performing funds, so that we can demonstrate a strong track record, as well as continuing to to support the ecosystem when it comes to emerging managers. So those are the two shorter term priorities,

Alexa Binns 19:14
and in terms of attracting more capital, we’ve got plenty of LPs who are listening. What advice do you have for finding those top managers? What would you recommend if you haven’t done a lot of investing in Canadian managers before? Yeah,

Paula Cruickshank 19:35
I think you guys have heard lots of allocators. So I think probably we are not so different. We’re always going to be looking at the team. We’re always going to be looking to, you know, the willingness to be. Aligned with LPs to build proper governance, to do all those right things. So that’s sort of the fundamentals. I would say that there’s a real opportunity for LPS that are, or sorry for GPS that are taking advantage of something that Canada is strong in. So we have really exciting climate tech practice that is starting to create a real knowledge base. I would say some other areas. We talk quite a lot about AI in Canada. So that’s an exciting new space. It does take a long time. That’s the counter side to making that kind of argument. But life sciences is another place where there is a lot of research and some very strong exits. Certainly we have to be willing to put in the time and the money. But I think there’s some very good funds that have really figured out how to shorten that period to have success on the other side in terms of returns. So those are some of the areas that we think about for Canada,

Alexa Binns 21:41
I feel like there’s also a bit of a Waterloo mafia. Are there other communities that you look to where you know it’s talent focused on certain I’m curious if there’s other other groups that we should know about. Well,

Paula Cruickshank 21:59
Canada, in case you weren’t aware, is this expansive geography and few people so very similar countries in terms of population? Well, we have a low population and they have a higher population, but we actually have the same number of VC hubs. So that’s kind of an interesting thing, because I think the VC hubs across the country are have certain characteristics, so we have a lot of AI and strong Life Sciences in Montreal, for example, as we move to Toronto, incredible fin tech and strong life sciences as well, but Toronto would be the biggest hub. We’re starting to see Calgary emerge, and it’s coming on the charts, if you will. It’s garnering notice because it has grown so quickly. There’s a significant affordability factor for housing in Calgary relative to say, Toronto or Vancouver, and it’s attracting a lot of talent. I think so we’re starting to see a lot of growth in Calgary and then Vancouver, heavily influenced by the Cascadia corridor, and so Seattle. So there’s great tech communities there. And I would say that both Vancouver and Calgary have some exciting clean tech components to their ecosystems. So in a nutshell, there’s countries like Germany that are much bigger than Canada, and yet they would have four hubs as well. And so that’s kind of exciting, that we have that many. Sometimes I think we need to ask ourselves if we shouldn’t consolidate a little bit more, but the geography doesn’t really lend itself to it. So that’s the challenge

24:21
for sure. Now

Earnest Sweat 24:22
We’re going to take a quick break to speak with our sponsor. What I’m hearing from both of you is that there’s a lot more complexity. Table stakes have been changed, right? So you need to be creative, no matter if you’re emerging manager or an established firm that’s, you know, had eight plus funds, but I’m curious how that has changed your roles, and where you see the real opportunity to kind of go the extra distance with so much complexity now between your two main kind of clients. Yeah,

Shane Goudey 24:59
for me. Perspective, I think that the greatest evolution in my role over the last 25 years has been from being purely a transactional processor to as much a business counselor as I am a lawyer to any of my individual fund clients. And to be honest, particularly when it comes to the emerging manager sector, I’m more of a business counselor than I am a lawyer in many respects, and I think it’s being able to utilize that expertise. A nd yes, while there is more complexity, that’s just much more mud that a lot of people have to wade through when they answer the fundraising market, you have to know the relative issues of importance to the various pockets of LP interest and communities, you know, what are they focused on? You know, what’s important to them, but also sizing them up when it comes to initial discussions with diligence, or, you know, when we’re doing these negotiations, what do they really care about ? They may, they may. Give you a list of 15 issues, but they only care about five. Yeah, having that ability to be able to be somebody who can provide market intelligence, in particular, as much as Matt and I work in the area, and as much as we see, you know, fund managers only enter the market every only, every so often, and so they need to be able to have somebody at their side who provides the day to day input on the business advice and how things are trending, or how things are differing from five years ago, you know, from even last week. So I think for me, just having a pulse on the business part of the relationship has been the greatest change. And I think for me, it has been the most valuable part of how I’ve fallen in love with what I do. Being a business counselor is very much a passion. In addition to being really good lawyers, we get to be somebody who is impactful on the underlying bottom line of how they’re rolling through these fund transactions.

Earnest Sweat 26:57
Matt, is there a criteria you think that emerging managers or established managers should consider when thinking about Council, like getting all these changes in the market?

Mathew Eapen 27:13
Yeah, that is a really good question. I think, from where I sit, sort of amongst peer firms, you know, they’re all going to know the law really well. At Sid Lee, we have a ton of regulatory expertise, tax expertise. I sort of think of it like my first job is, like the cold pizza test. It’s sort of like you’re up all negotiating, you know, who do you want to be sitting there in a cafe having cold pizza with, you know? And sort of, like, those relationships are the stickiest. I get calls from clients, you know? It’s like, they get off the phone with their investment team, and they’re like, all right, I want you to pause for a second and suspend reality. Suspend that this timeline is outrageous. Suspend that, like, what they’re asking for is really intense. Like, what, what can we do in this situation? What’s your advice? And so, like I, I think about it from a place of empathy, like, if I was in their shoes, like, what, what would I want to hear? And how can I make their life easier? And so like that, that’s really been, like that friendship and personal aspect, and like seeing them succeed. Early in my career, I spent time in house at a venture fund while still working for my law firm, and that, like, just informed my decisions all the way, you know, like these deadlines that people report to us. These aren’t sort of made up, you know, these are like, someone is like, it’s a mirror image of what we have. They have clients. They have stakeholders. You know, LPs are there, and especially in a tough fundraising market, like engaging with LPS earlier and making sure you’re both talking about the same concept and the same issues at the same time. That’s really, really important. And so for the clients I work with, or just like advice to, like, you know, GPS, as they think about outside counsel, really think about like, Who do you want to be along with you for the ride for years and years, and whose judgment do you trust? Because it’s like, you know, lawyers can be both service providers, or they can be service providers. Plus, you know, Shane mentioned, like, I love the aspect of being a business counselor and really helping someone think through creative solutions. Yeah, I that’s

Shane Goudey 29:32
such great points. Matt, the thing for me, if I’m sitting in that chair as a VC, does this person sitting across from me who’s gonna have such a fundamental impact believe in what I’m doing and believe in me, and that can be the gas that fills everybody’s tanks on the VC side, on the lawyer side, if everybody’s working towards the same goal, and VCs are convinced that, not only do they have. A truly great legal partner, but they have somebody who actually believes in what I’m doing here and is going to commit absolutely everything, because they have Yes, they’ll collect their fees off these transactions. But do they have a personal stake in my success? Do I believe that? And if the answer is yes, the CO pizza analogy, Matt is absolutely perfect. You really want to be in a fox hole with somebody you think has your back through and through from dusk until dawn and then some. And that is, there’s no more true great partner, whether it’s legal or business, than somebody you believe is going to be there for you always. I

Earnest Sweat 30:38
I love the CO pizza analogy way better than when I was a management consultant, and we would say it would be the Cleveland layover. Like, who do you want to spend a six hour layover with in Cleveland? I don’t know why people shots at Cleveland like that, but that was my

Shane Goudey 30:53
wife’s from Cleveland. Yeah.

Earnest Sweat 30:58
It was hilarious. And

Alexa Binns 31:00
now back to our elk interview.

Earnest Sweat 31:04
Paula, you mentioned throughout this conversation, and even,\, before we, we started the interview about, you know, kind of the impact that your organization is providing to the Canadian ecosystem. That’s not, that’s a tall task, right, to help build an entire ecosystem. Could you talk a little bit about, not only how you set your goals, but more importantly, how do you track success, like, how, what is the data that goes along and what do you focus on most to see, yeah, how you’re meeting your milestones?

Paula Cruickshank 31:39
Yeah, absolutely. I think that at this point we are, I’m going to say clearly, figuring that out, but I think we’re getting a lot better at being able to articulate the differences that we’re seeing and what we need to do more of or better. One of the things we’ve thought quite a lot about is following companies rather than just focusing on a stage. So Canadian champions would be rapidly growing companies that are starting to exceed that 100 million dollar revenue level. I mean, there’s all sorts of classifications for companies, but if we can make sure that we are able to follow companies all the way through their growth and development until the point that they can be launched globally and be sustainable going forward, and be resilient, then I think that is a real success story. You know, if we talk about tech companies that were launched around when I first started, we are seeing a lot of them, and they’ve weathered the storm, and we’ve been able to have an impact on a number of those companies. So that’s exciting, and I think we have to keep our metric, that is one of the metrics we look at, for sure. But the other aspect is much more qualitative. You know, we put together a de ISG study. What are we seeing in terms of the composition of investment committees? What are we seeing in terms of the diversity within portfolio companies? So there’s a range of different things that we look at, but ultimately, all of these things help with the resilience of Canadian companies, because as Alex Lazaro says, we’re at the frontier. We’re developing camels, we’re not developing unicorns. We’re developing companies that can withstand, you know, the cycle of capital, and obviously we’re in a more down cycle at this point in time. So can those companies develop the mechanisms to be able to survive it? Can they have the right people around the table? Can they get to the revenue that they need to to be able to keep going? And those are not some of the things.

Alexa Binns 34:58
What is the metaphor for you? A unicorn that takes flight, a camel who, you hinted at the top of this earnest that there are some camels who are going to be what is it reaching their peak of their

Paula Cruickshank 35:17
Yeah, that’s so are we gonna see some of these camels take flight?

Alexa Binns 35:25
Where are we going with it? It seems like there’s some camels growing wings in Canada. Can you tell us about those camels? Yeah, absolutely

Paula Cruickshank 35:33
so. So the discussion is really around this class of 2014 right? 2014 was, it was still challenging times, but we’ve seen a number of companies that have spent time looking at the statistics. There’s a researcher, Charles plant around the narwhal project, and he’s looked specifically at the companies that have reached that 100 million dollar goal, and there’s more than I think most Canadians would give them credit for and we’re proud of BDC to say that we’ve been investing in a number of those companies, and they form part of our portfolio. So we’re very hopeful that in 2025 there may be exits. Are they going to be IPOs? I don’t know, and we all know that an IPO can be a real challenge because of hyped expectations and then not necessarily delivering on them. But I guess the same can happen with M and A. But the point is that I think some of these companies have grown to a point where they probably have a number of options in front of them. And at the end of the day, that’s what I’ve always said at BDC. What we’re here to do is provide entrepreneurs with options. And so that’s exciting for sure.

Earnest Sweat 37:23
Since you mentioned the approach to really kind of mobilize around these Canadian champions, which I think is brilliant, especially when you’re in the early stages of, you know, finding the right camels, right to represent your ecosystem. Are you seeing any key differences and challenges across the different stages that you can speak to that have caused you to move to this champion target? Yeah,

Paula Cruickshank 37:53
yeah. Absolutely. That same paper that I was talking about talked about the challenge just to get to a series B. So it may sound incredible to folks like you that spend a lot of time talking about the American ecosystem, that we would consider Series B late stage, but only a fraction of our companies actually get there, so about 8% it’s around the same as the UK. So just to give some context, the this particular class, which was the one being studied, this class of 2014 about 8% got to Series B. And whereas, and I don’t know if it was just a great year or what, but in Germany, 19% got to Series B. So you know that scaling piece is a very different situation. That same year in the US, it was about 13 for American companies, but obviously so many more of them, because we’re talking about a percentage basis. So you know, that’s a piece of it. The other piece of research that we’ve looked at, or spent quite a bit of time talking about, is the Canadian VC landscape. So that’s a study that BDC puts together. And we all understand that 23 to 24 was a challenging time, but we saw the decrease in late stage financing. And now I’m talking more about a series of even gross equity or private private equity. That decrease was more significant in seed, it was 1% but in that space, it was, I’m just going to take. A quick look here at my notes, it was like 96% in gross equity, which I think is exaggerated because it’s one year. But even at a later stage, it was close to a 50% decrease year over year. So that’s tough, and I don’t think it’s going to be that case year after year, but it’s a pretty sudden shock. So you definitely need to be resilient as a company to survive that

Alexa Binns 40:36
interesting. Some of these graduation rate numbers remind me of the female founder landscape in the United States, it’s about 5% raise a series B, and I’ve been feeling with this contraction of capital like everybody now is being held to the same standards, maybe as your Canadian founders and those female founders in the United States that You’re saying, Oh, we don’t just like your flashy teeth and your tall stature. You need to come. You need to come with a really exceptional business. And I think the camel metaphor carries through that. It’s what you’re looking for. Female founders here in the States, for sure, are not reliant on capital, because it’s not always given to them freely. And it sounds like that’s very similar to the founders in Canada as well. Yeah,

Paula Cruickshank 41:29
absolutely. It’s a, you know, I read a lot about the companies and their struggles and their choices at various points, and the bootstrapping that can actually lead to success later on, right? I think that’s one of the things I appreciate even better, although I think VC is very exciting. It was a founder that expressed it very succinctly. To me, it’s like this has to be exceptional for us to do it. I think that a lot of folks in the tech space may be taking it for granted that there have been some exceptional years, but not every company is going to benefit from VC. It doesn’t mean it’s not a good idea. It doesn’t mean they won’t have success, but VC is a very particular thing. Yep, yep. So that’s a little bit of the environment and at the frontier, people have to survive a lot longer without it, or have to get to a certain point before it’s going to happen. So I spoke on a panel with a great example of that company. I don’t think he’d mind me calling it out. So mosaic manufacturing, we were speaking on a panel together out of Venture Lab, and that’s a regionally funded Innovation Center, and basically it focuses on hard tech. And basically Mitch de Borah had been working on his company for many years, and was able to raise, I believe, his first round of financing when he already had revenue, so it was a different point than many companies would have raised in the valley. So yeah, that first exciting round was later on in the company’s existence.

Earnest Sweat 43:56
Paul, is there any interest from your group, or even, like, cultivating a LP culture that invests in us opportunities, maybe even a late stage that could be expanding to Canada, is that something that you guys would entertain?

Paula Cruickshank 44:15
So it’s an interesting question, because I think I actually do get quite a bit of inquiries as a federally supported crown Corp. We invest in funds that may be investing in US companies, absolutely, but we have to see some investment in Canadian companies. So what we usually say is we need to invest, or sorry, we need to see at least our investment invested in Canadian companies. So if we were 10% of the fund, they would have to invest in at least 10% of Canadian companies. Companies. But we’re, you know, we’re very excited if the fund is going to be more international than just Canada, because truly we believe in a global environment, we believe those companies have to go beyond Canada’s borders, typically, because of our small population, people are thinking about that right off the bat. That’s another thing that we see at the frontier, is that people have to be born global, right? And so they work really hard to develop exports, to have partners and investors from outside of Canada. So yeah, we’re definitely open to it. And we see that in a lot of our funds, they’re not exclusively community.

Alexa Binns 45:56
Is there any other criteria for GPs who are listening to determine whether they they should find a way to get in touch with

Paula Cruickshank 46:05
you. So I would say that in terms of the emerging space, we now have the luxury so this wasn’t always the case, and this is an example of how our industry has evolved over the past 10 years, I would say that there are many more established managers than there used to be, and we are interested in building strong franchises. So I recall one of your other guests coined a term that I hadn’t heard before, but it made sense to me, franchise risk, right? So we would like to minimize the franchise risk. And folks may have a great theme and a great idea, but can they raise subsequent funds. And the reason we say that is because of so much experience working, not on my part, perhaps, but on the part of my team, working with emerging managers. And they just learn so much at every iteration, at every new fund, the learning increases so significantly that we are looking for folks who can be there for the long haul. And I think that Canadian entrepreneurs need that too.

thank you It has been a pleasure, and then this team is lucky to have given you all your experience that you’re now bringing to this group. Well, thank you very much. The VC ecosystem will benefit.

Paula Cruickshank 49:29
Fantastic.

Earnest Sweat 49:31
Thanks for being on Paul. Absolutely

Paula Cruickshank 49:33
appreciate the opportunity, and it’s been a great conversation.

Alexa Binns 49:38
See you later, Allocator.