Boris WertzAlana Paterson
Boris Wertz is one of Canada's most respected early-stage venture capitalists. He's the founder of Vancouver-based Version One Ventures and serves as a board partner for Silicon Valley VC firm Andreessen Horowitz.
What's your favourite metric as a venture capitalist?
Ultimately, what counts is customer satisfaction, so a metric like net promoter score. With brute-force sales and marketing, you can always generate revenue. But you can only build a large, sustainable company if customers love and recommend a product, and come back and use it.
What has been your best investment?
GoInstant is still unrivalled—a Halifax company that got sold to Salesforce with a 10-times return within a year. That is rare. When you invest in a company, you always assume you will be in it for 10 years.
What's your biggest investing mistake?
Passing on [Canadian start-ups] Hootsuite and Shopify. In Shopify's case, I just didn't see how much potential there still was. On Hootsuite, I completely underestimated the traction they already had and how quickly they had grown. One of the lessons of Shopify is that only a few billion-dollar companies are created each year, and if you have a relatively high conviction you're looking at one of them, it doesn't matter if the valuation is a bit high—go for it.
What subsectors in tech offer the best opportunities now?
I think we're at the tail end of the mobile platform. The next-generation platforms are all still early, but we're looking at drones, the Internet of Things, Bitcoin, Blockchain, artificial intelligence and machine learning. We think a lot about virtual and augmented reality. As a VC, you don't want to be at the bleeding edge, and mass adoption is probably a few years away. So we probably want to wait it out for another couple of years.
What areas are you cautious about?
This whole on-demand category has created large companies like Uber, which truly are marketplace platforms and tech companies. But you also have a whole slate of "Uber for X" companies that are service companies that use tech to be more efficient. Ultimately, we want to invest in tech companies, not tech-enabled service companies.
Other than venture, where do you invest your money?
Low-fee index funds and a few private equity funds where I know the manager.
What advice do you have for retail investors?
There have never been more opportunities to get involved with tech start-ups, but it's very risky. There are about 10,000 start-ups created every year, and only 10 become multibillion-dollar companies that create all the returns.
What's your investing motto?
Only invest in what you understand.
Sean Silcoff