When Janet Bannister left the world of consulting and entrepreneurship five years ago to become a general partner at venture capital firm Real Ventures, she had a reputation for building tech giants.
After all, she had founded e-commerce brand Kijiji in Canada and worked as a director of category development for years at eBay Inc. in the San Francisco Bay Area.
As a general partner (GP), she works with Real Ventures’s portfolio companies to help them build their businesses, and she reviews potential new investments.
So, it might surprise some that she enrolled in the Business Development Bank of Canada’s GP Academy program in November, 2017. The program is designed to fill a gap in Canada by raising a generation of highly-experienced general partners in the venture capital (VC) sector by teaching investing skills and how to nurture startups.
“I didn’t have any experience in venture capital before I started at Real Ventures. I read about three books and a lot of online articles about the industry [before I started at Real], just so that I could at least be up to speed on the basics,” Ms. Bannister said.
“My mindset has always been that I can always get better. … When I heard about GP Academy, I thought this would be great.”
The program, which just accepted its second cohort, enrolls between 10 and 15 students every 18 months. Those enrolled are usually founding and general partners of VC firms who have spent about five years in the field or have significant operating experience. They are coached during sessions held in Toronto, Montreal, Vancouver and San Francisco about such topics as limited partner agreements, leadership strategies and the economics of VC funds.
The program was born from gripes about Canada’s VC industry, which has consistently faced pressure to discover and back “the next Shopify,” a reference to the Ottawa-based e-commerce company considered by many to be the gold standard of success in Canadian tech.
The industry has also had to grapple with a reputation for being smaller, younger and less lucrative than its American counterpart and with recently hitting a plateau in investment after years of growth.
Canada’s VC investment last year sank by 2 per cent to $3.7-billion from the year before, and the average size of all deals dropped by 3 per cent to $6.1-million in 2018, according to the Canadian Venture Capital & Private Equity Association.
That same year, U.S. VC investment reached $130.9-billion, the National Venture Capital Association and PitchBook said. The U.S. VC industry has largely benefitted from having a wealth of GPs with 20 or 30 years of experience.
The number of GPs in Canada “expanded dramatically” between 2012 and 2018, but it’s rare that those GPs have more than a decade of experience, BDC Capital vice-president of market development Neal Hill said.
“The expansion in number of funds has been so fast that they have had to pull in more and more people from outside the VC industry, most of whom – by definition – don’t have previous experience in VC investing. So if anything, the average years of experience has gone down with the expansion in number of funds,” Mr. Hill said.
“We’ve seen a whole generation of people go out of the business when the bubble popped in 2001 and when money dried up in the Great Recession [in the late 2000s]. There are not many people who have been in the industry for very long because it’s a hard thing to learn how to do.”
The Academy was modelled after the two-year Kauffman Fellows Program that has been training international VCs for decades. The Academy’s model involves four modules, which average two or three days in length. The modules feature speakers from companies including Emergence Capital, Canaan Partners, Venture Investment Associates and Floodgate Fund.
BDC “substantially subsidizes” the $15,000 program fee in an effort to keep the Academy accessible to even the smallest of VC firms. It has also been striving to include women and support their professional development. The Academy neared gender parity this year when it accepted five women in its latest 12-person cohort.
Less than a year after Ms. Bannister and her cohort graduated in November, she is already seeing a positive impact.
“I had one company that was raising money, and as a result of the relationship I had formed through the GP Academy, I had another top Canadian venture capital firm invest,” said Ms. Bannister, whose work at Real Ventures has involved artificial-intelligence based data business Canvass Analytics Inc. and benefits start-up League Inc.
Meanwhile, fellow cohort member and Plaza Ventures GP Matthew Leibowitz said not a day goes by that his cohort isn’t swapping messages, sharing invaluable advice about how to navigate the industry.
“It’s sort of like group therapy for venture capitalists,” Mr. Leibowitz joked. “The people in my cohort are kind of like brothers and sisters from another mister.”
It was reviews such as Mr. Leibowitz’s that convinced Magaly Charbonneau, the vice-president of investments at iNovia Capital, to join the program’s second cohort.
She has only been a VC for 18 months, but said the difficulties of the job were apparent from the moment she started, and her coworkers were using industry acronyms. It took her a while just to learn the lingo, she said.
“I wish I had taken the GP Academy program before joining the investment team 18 months ago,” she said. “I think it’s going to propel me a couple of years ahead because I am going to go back [to work] with probably two years of experience I wouldn’t have had.”