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 Whitney Rockley, co-founder of  McRock Capital

Here’s my fourth interview with Whitney Rockley who is the co-founder of McRock Capital.  McRock Capital is the first dedicated Industrial Internet venture capital fund focused on the intersection of sensors & software and large industrial markets.

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

The entrepreneur needs to “crack the code first” then raise the money.  We look for entrepreneurs that have some early commercial revenue so there is some validation from the market.  We like to lead Series A financing but the money needs to be to aggressively scale the business not figure out how to scale the business.

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

The team is the most important.  We look for a team that comes from the industry they are targeting as customers.  After we know the team has excellent domain experience, we look at the solution to determine if it is solving a real pain point.  We also need to assess how easy it is to sell the solution to the customers and how the company plans to scale/grow their business given the market they are targeting and the associated sales cycle.

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

Domain experience.  Take a look at one of our videos for Killer CEO traits.

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

We look for a solution that solves an industry pain point.  We like validation from the market that the solution works and is valued by the customer.  The key is to identify markets that demonstrate high CAGRs but in absolute $’s they can be less than $500 million.  As VCs we are 100% return driven.

Does a startup really have only one shot?

Test your pitch out on groups that do not matter as much so you can refine it and get really good at pitching to the important groups in time.  Use your advisors/board to dry run it as well.  I believe start ups have more than one opportunity as long as they do not crash and burn.  Remember to prep prior to the pitch so it is tailored to the needs/requirements of your investor.   Check out our “Art of Fundraising” video.

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

On the whole, VCs follow the same due diligence process.  A start up needs to get in front of the investor so they can get on the investor’s radar.  Once on the radar, the larger investor team can discuss the opportunity and vote to determine if further review is warranted.  Once in a formal due diligence process, it should take 6-8 weeks to complete due diligence and receive a term sheet.  It then takes about 3-4 weeks to negotiate the legal documents and close.

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?

Canada is fertile ground.  We’ve had a lot of success stories.  See our paper on entrepreneurship in Canada – The Phoenix Report [no longer available]. We are active investors in Canada and have been for over 15 years.

About Whitney Rockley

Whitney Rockley is the co-founder of McRock Capital, a venture capital firm focused exclusively on the Industrial Internet. She brings over 15 years of investment, operating and strategic planning experience in large, established industries such as power, water and oil & gas. She is refreshingly real and passionate about women-in-tech and inspiring girls to get into STEM (Science Technology Engineering and Math) through her website whitvc.com.

She currently serves on the executive committee and board of the Canadian Venture Capital Association and has had a number of impressive wins over the course of her career.  She was one of the key investors behind RuggedCom, which was acquired by Siemens for almost half a billion dollars.  She was an investor and board member of the Pressure Pipe Inspection Company (PPIC), which was sold to Calgary-based Pure Technologies. She was also a board member and investor in SpectraSensors, which was sold to Swiss-based Endress + Hauser.

Prior to co-founding McRock Capital, she was a Partner with a Zurich-based venture capital firm and Nomura New Energy Ventures in London, England. She has extensive experience setting up and managing corporate venture capital programs. In addition to PPIC and SpectraSensors, Rockley previously served as a Director of Senscient, TerraLUX, DeepFlex, and Novinium and was an early investor in Silicon Energy (acquired by Itron) and Capstone (NASDAQ: CPST).  Having worked in London, Zurich, San Francisco, Calgary, Edmonton and Toronto, she has an impressive global network.

Social Outposts: Linkedin | Twitter

This post was updated on Mar 28, 2017

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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