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 Doug Osborne, Founder of Doug’s Unlimited.

Here’s my eighteenth interview with Doug Osborne, Founder of Doug’s Unlimited, located in Oakville, Ontario. Doug is an Angel Investor and a member of Angel One Network. He is also an advisor at Innovation Factory and the RIC Centre.

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

Once they have created the unique product or solution (minimal viable product or better), verified/demonstrated viable commercialization and attraction/demand in the market; have confirmed sufficient addressable market size, and have assembled a credible (and preferably experienced) management team to execute the vision.

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

Both, but with slightly heavier weighting on the team.  The world is full of great ideas, but if the team can’t effectively commercialize or implement the idea, you’ve got nothing.  When I write my cheque as an investor I am trusting the team in good faith to deliver what they said they could and what they promised. That being said, even the best team has to have something good to work with. You get a sense from some teams that they could build a business out of just about anything – those are the teams I’ll sign a cheque for.  The government has already taken 50% of my money through taxes, please don’t take the OTHER half!

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

Passion with a sense of urgency; trust and credibility; perseverance/persistence with focus; coach-ability (discern and act on good advice/experience); past success is a big asset, or having learned from failure; diversity of pertinent skills; business experience & acumen; and they have something substantial (product or service) to work with.

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

Is it easy to understand and adopt; does it solve a big enough pain-point for a big enough user-market within a short enough timeframe; does it have an efficient “time to value” (provide value quickly) and “time to money” (prompt sales cycle/cash flow); is it sufficiently unique and better that other available options and can that advantage be maintained/protected for an extended period of time;  A ‘platform’ solution (with multiple uses/applications) versus just one product or application is always preferred from a risk and scalability perspective. 

Does a startup really have only one shot?

It’s fundamentally about credibility – of the idea, and/or of the management team.  If the idea has credibility and viability, you’ve got something to work with.  Most start-ups experience numerous pivots before they are positioned to scale.  If the start-up team demonstrates that they are listening to the market, have acted on sound advice received, and are presenting something meaningfully better than before, then absolutely they have a second shot.  Investor patience wears thin quickly however if you don’t listen/take good advice or just try to ‘repackage’ the previous product.   If you don’t catch their attention on the second shot, your hill just became a cliff.

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

Firstly, every investor’s criteria for investing and approach to due diligence is different, and may change over time.  So if I don’t choose to invest in your business, it’s not necessarily that your business is bad, it’s just that it doesn’t fit my criteria at that time.

Pay close attention to business fundamentals, be open & responsive to what the marketplace and those with pertinent business experience are telling you, and keep focused on what is essential and right for your business.

If I don’t understand (or it takes me too long to) or believe in your offering, your business model, or your target market, etc., I likely won’t invest in you.

If I feel you are not being up front or open, aren’t telling me everything, or don’t know (or are exaggerating) your business, potential market or growth potential, I likely won’t write a cheque.

Your biggest challenge (and opportunity) is to get the market, then investors, excited about your business solution –  If you engage them both to help you build and refine your solution, you’ll be a success.

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?

Yes Canada is fertile ground for tech start-ups.  We have an amazing talent and imagination pool, an energetic and responsive eco-system, and some progressive funding programs.  Our biggest challenges are getting the business engine right (ie. to commercialize the tech), and getting beyond Canada’s relatively small market size.  That being said, our smaller market gives us unique opportunity to test out ideas/commercialization, fine-tune/bullet-proof our offerings, then graduate to the big pond south of the border and internationally for exponential growth if desired.

I typically have investments in 6-8 start-ups at any one time, and deliberately maintain a diverse portfolio of companies and lower individual spends.  I focus my due diligence and investing decisions mostly on strong business fundamentals, management teams that I feel can ‘cross the finish line’, and the market potential.  

About Doug Osborne

Doug is the Founder of Doug’s Unlimited Inc. and creator of the ‘Success Dashboard©’ Process, an efficient and practical one-page strategic process that helps businesses focus on priorities and results, and execute with sustained discipline towards substantial growth. The mission of Doug’s Unlimited Inc., and Doug’s personal passion, is to “substantially improve the efficiency and success rate of business through Simple, Practical & Visual business processes”.

Social Outposts: LinkedIn | Twitter | YouTube

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.

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