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.
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 Angela Kingyens, from Version One Ventures
Here’s my eighth interview with Angela Kingyens [LinkedIn] who is a VC at Version One Ventures. Version One Ventures is an early-stage fund investing in outstanding consumer internet, SaaS and mobile entrepreneurs throughout North-America with offices in Palo Alto, California and Vancouver, British Columbia. The founder is Boris Wertz [LinkedIn] who is a Board Partner at Andreessen Horowitz and is the co-founder of the startup bootcamp GrowLab.
When would it be appropriate for a startup to seek investment from you?
We are mostly interested in early-stage opportunities, i.e. Seed or Series A rounds. We need proof of product-market fit as well as initial traction. Regardless of the business model, we look at user growth and engagement metrics first. We want to get a sense of how quickly and how much of the initial target market has been captured, and whether the entrepreneur knows what factors convert a registered user to one that is active and/or paying. We aim to invest at an important inflection point of a startup’s life: the time when entrepreneurs need an injection of capital to scale more aggressively and become a category leader. Having said that, companies in stealth mode or running pilots are too early for us.
What’s more important: the idea, the team or both?
At the stage in which we invest, the team is most important. While the idea must be novel and solve a clear pain point, it is only a business if it can be executed by a team of effective leaders. In the first 18-24 months of building a startup, so many decisions have to be made and inevitably, so much can (and probably will) go wrong. Entrepreneurs need to be focused with the persistence to weather all storms and the ability to learn and iterate on product quickly.
What are you looking for in a startup team? What does a winning team look like?
A winning team is one with passion and determination, vision and the ability to communicate it, product and design instincts, talent, and deep domain knowledge. We blog frequently on our website about what we look for in founders, and most recently, Boris was interviewed by Inc.com about the 5 traits that matter most to us.
What are you looking for in an idea? What does a winning idea look like?
We seek startups taking a unique approach to solving a big pain point for a large market, especially in underserved verticals and geographies. We invest in emerging category leaders and/or category definers. Based on the economics of our fund, we look for companies with a potential $100M+ valuation. And just as we have shared what we look for in founders, we have also blogged about the two ways in which one can build a $100M+ business.
Does a startup have only one shot?
Absolutely not. Startups evolve and even pivot as they discover a stronger product-market fit. Also, what appeals to one VC doesn’t necessarily appeal to another VC. The best way to prepare a pitch is to practice telling your story: focus on how you deliver your pitch as well as the content being shared.
Can you describe your due diligence and investment process? What’s important for a startup to know about it?
Being a two-person investment team, we make decisions quickly. One of us interviews the entrepreneur first, and if we feel that the startup might be aligned with our thesis during the initial meeting, we schedule a second meeting with the other one of us. As we get a clearer sense that the opportunity fits our fund, we continue with due diligence by collecting feedback from previous co-workers, investors, and customers. We want to make sure that the team is comprised of people who others enjoy working with. We also analyze the startup’s data, especially that related to user engagement. We want to make sure the entrepreneur understands what key metrics drive the success of his/her business.
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, why not?
The Canadian startup ecosystem is definitely growing as we are seeing incubators and accelerators being formed, an increase in government support (like SR&ED and the Startup Visa program), and more international investors looking for opportunities in Canada. Living and working in Silicon Valley, I feel that the ecosystem here is definitely special and more mature. It would be unfair to compare Canada or any other city or country to it.
However, the challenges of building and investing in a startup outside the Valley are now less related to geography. We are all connected and creating new and unique ecosystems in different cities and countries. As mentioned, at Version One, we seek opportunities in underserved geographies.
In fact, 75% of our portfolio companies are based outside the Valley, and 50% are in Canada. We are excited to be a part of their growth, and by extension, are proud to be a part of the the impact that they will have on the Canadian tech scene.
About Angela Kingyens
As the Version One analyst, Angela is responsible for managing the day-to-day activities of the fund, including helping to identify new and interesting entrepreneurs and companies in our three focus areas (e-commerce, SaaS, and marketplaces/platforms). She also works with our existing portfolio companies on data & hiring projects.
Angela received her PhD in Operations Research and Engineering from the University of Toronto where she taught classes like “Entrepreneurship and Business for Engineers” and “Leadership and Leading for Groups and Organizations.” As a data scientist with a passion for leadership development, she aspires to cultivate talent with data.
Angela is located in Palo Alto, where she co-launched a Y Combinator-funded education startup focused on helping recent PhD graduates transition from academic research to careers in industry. She also runs the San Francisco Bay Area Skule Alumni Chapter for University of Toronto engineering graduates living in the Bay Area. Read Angela’s post: Why Venture Capital is the Perfect Fit for Me.