The 7 Questions Interview Series: Angels and Venture Capitalists

The 7 Question Interview Series is an investigative content series where I seek out key leaders in a specific industry and/or subject matter expertise area and ask them 7 key questions that “enquiring minds want to know”. There is a twist however to these questions. I provide the interviewee with a hypothesis for each question to help frame and set context for their answer. This specific series of interviews is ideal for startup founders.

Series Objective

The objective of this series is to establish direct connections with VCs and Angel Investors across the globe and ask them the same set of 7 questions regarding investing in technology startups. I’d also like to know what their appetite is for investing in Canadian startups and why they do or don’t.

Interview with Investment Manager Dawn Umlah from Innovacorp

When my twelfth interview with Dawn Umlah, was published, she was Investment Manager at Innovacorp, located in Halifax, Nova Scotia. She has since taken over as COO at Spring Loaded Technology, where they make Bionic Knee Braces for Active Adults.

When would it be appropriate for a startup to seek investment from you?

Warm us up first; let us get to know you. Start with developing a relationship. The best investments are the ones where I have invested after knowing and following the progress of the founders and company for a longer period of time – and this doesn’t mean for a month! I’m talking six months to a year.

In terms of what you need to have in place prior to asking for an investment, it depends on the stage of the company and the use of funds. We go quite early in some cases where we co-invest with angels to help fund the product build. This is more typical in the deeper technologies with a longer development cycle and can’t simply be built by two people on the cheap in someone’s basement. Overall and ideally, there would be an early prototype to demonstrate product innovation and a balanced team with domain expertise and unique insights into the problem and the customers you are targeting. In this ideal world, you would have also achieved some customer validation via deep customer discovery, understand your competitive landscape and have started testing plans for how you are going to monetize and get your solution to market.

If the company is light on technology and it is more of an execution play, you need to be further along; particularly as it relates to product, traction, and how you are going to scale the business.

What’s more important: the idea, the team or both?

Both are required, but the team is more important. A great team can generally turn a terrible idea around. A terrible team likely won’t deliver on a great idea. It’s all about execution.

What are you looking for in a startup team? What does a winning team look like?

Hustle and/or scrappiness – defined as drive, determination, perseverance, and relentlessness – it’s imperative, particularly in Canada. As previously mentioned, the team should be complementary and balanced with deep domain expertise and unique insights into the problem and customers they are targeting. Ideally, the team has worked together before, has been through a few rough patches together and has come out the other side still able to look at each other every day.

What are you looking for in an idea? What does a winning idea look like?

I love highly differentiated, deep technology where the founding team has built a similar solution and is applying it disruptively (the first time being commercially available or in a new vertical, ripe for change) in a large market.

In general, a winning idea for us is one that is disrupting a large market in a differentiated way – either via product innovation, substantial simplicity or applying known concepts in a new area.

As for fund economics – we welcome, but don’t require, mythical creatures.

Does a startup really have only one shot?

No, particularly at the early stage we invest in. We realize it may take a few kicks to get it right. The exception is if you are an ass. Then you only have one shot.

Can you describe your due diligence and investment process? What’s important for a startup to know about it?

Sequentially, we take some time getting to know the company and the market, we have initial discussions with the larger investment team, bring the company in to pitch, vote re: progression and then enter into a more formal due diligence process. All the while, we are trying to figure out how well you understand the key drivers of your business and the probability of your team to execute.

In your view, is Canada a fertile ground for tech startups? If so why and in what ways is Canada unique and competitive in this regard? Are you investing in Canadian startups? If so, why? If not, how come?

Absolutely. Canada is unique; our entrepreneurs are resourceful and smart. It’s true, our government may be controversial in terms of its level of involvement, but it’s supportive. It backs the growth of a knowledge-based economy and helps build Canada’s dynamic high-growth entrepreneurial culture. We’re in an apprenticeship business, so retaining and fostering talent is imperative in order to build more billion-dollar companies in Canada. And a number are on their way – HootSuite, DHX Media, Shopify, Desire2Learn, FreshBooks and D-Wave Systems, etc.. So now it’s game time. Let’s encourage, support and keep smart people here.

And thank you for not referencing Silicon Valley of the North! We need to be different. As a nation, and as regions, we need to think of ecosystems and communities similarly as you would for a business. What are your resources? What are your strengths? Where can you really differentiate and drive your own niche? We need purposeful city/region building.

About Dawn Umlah

Dawn Umlah is an investment manager at Innovacorp, where her focus is on identifying attractive seed and early-stage investment opportunities. She manages all aspects of the investment review, approval and closing cycle, and works hands-on with Innovacorp’s portfolio companies to assist them in building teams, accelerating their growth, achieving milestones and securing additional financing. She is a board member at The Rounds, LeadSift, Karma Gaming, TopLog, Up My Game and TitanFile.

Prior to joining Innovacorp, Dawn held various senior roles in finance, operations, strategic planning and corporate development. She was the first non-founding employee at DHX Media Ltd. and was an integral part of propelling the company through various growth transitions and corporate development activities, including two private placements, an IPO on TSX and AiM, two secondary offerings, a reverse take-over bid, and six acquisitions and integrations. While at Blackberry in Waterloo, Ontario, she was the finance business partner for senior management, covering business development, strategic alliances and multimedia. Altogether, Dawn has been involved in corporate development transactions and fundraising activities aggregating more than $350 million in value.

Dawn graduated from St. FX with a degree in business administration and then obtained her CMA designation and her MBA from Saint Mary’s Sobey School of Business.

Social Outposts: LinkedIn Twitter | AngelList

Chris HerbertChris Herbert is the founder of Mi6. Mi6 is a B2B (Business to Business) marketing and business development agency dedicated to helping companies build their brands and develop commercial relationships. He is the founder of ProductCamp Toronto and the Hi-tech community Silicon Halton. He tweets under the handle @B2Bspecialist.