Occupation: Director of Simon Fraser University's industry liaison office.
Portfolio: GreenAngel Energy Corp. (co-founder), Azure Dynamics Inc. , PNI Digital Media Inc. Larger-capitalization holdings: Plutonic Power Corp. (co-founder), Electrovaya Inc. , Microsoft Corp., Teekay Shipping , National Bank of Canada , PowerShares QQQ ETF (based on the Nasdaq 100 index).
Mike Volker's day job is finding ways to turn inventions and technological developments at Simon Fraser University into commercial success stories. He's also involved with setting up angel investor groups to help incubate and nurture companies.
In essence, Mr. Volker does angel investing, either on his own or, more often these days, as part of a group of investors he's put together to invest in a basket of new ventures. He typically becomes directly involved in stewardship, governance and mentoring, and by taking a place on the board of directors. For instance, he's involved in the clean energy sector through a public fund, GreenAngel Energy, which has taken smaller positions in some half-dozen companies.
The big problem with early-stage investing, especially over the past two years when the appetitive for new issues simply vanished, he says, is liquidity. "It's easy to get into these investments, but at some point you'd like to get out, and for the last few years we haven't seen too much of that. But that's turning around now."
Why he prefers early-stage investments: "With larger companies you're removed from the action, and you're getting second-hand information, reading analysts' reports and opinion letters," he says. "Working with startups I'm basically an insider, although you can't trade on that."
Who he backs
For Mr. Volker, it comes down to a feeling. "It's something you get from the way they talk, the way they conduct themselves." By way of illustration, in the late eighties he put money into a wee enterprise called Research In Motion on the basis of a half-hour meeting with founder Mike Lazaridis. "I thought no matter what they'd be successful." He notes that back then, RIM was making shop floor automation and display indicators for assembly lines. "Often they end up being successful with something different than what they start with," he says. "It's agility and responsive and the ability to see and seize opportunities that make them successful."
The biggest red flag is entrepreneurs who don't know what they don't know, and aren't coachable, Mr. Volker says. "When people are asking for money, they go to great lengths to say they're easy to work with. They'll say they'll get a CEO and build a team, but then they try to do it all alone."
After attending a presentation in Vancouver, he bought some shares of Calgary-based Resverlogix Corp. at $1.32 last fall. The biotech company is involved in creating novel therapeutic treatments for a number of serious diseases. The stock shot up much faster than Mr. Volker had anticipated, and he sold his shares for $6 in April.
In 2007, Mr. Volker purchased some shares at 60 cents in a private placement for Vancouver-based Metrobridge Networks, which was providing wireless networks in high-density municipal areas. While the company was soon able to quickly raise a lot of money through public offerings, he says, "It wasn't well managed." He stake is now worth about 10 per cent of what he put in.
"If you're going to do this kind of investing, meet the people." He argues that the three key qualities to look for are integrity, intensity and immediacy. "If they don't do things immediately, the competition will beat them. I've seen it over and over again. It's usually the one that is first to market who [is successful] and that's where being intense comes in."
Special to The Globe and Mail
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