One of Toronto’s most prominent angel investors, former Wattpad Corp. executive Eva Lau, has launched her first venture fund, becoming one of the few women in Canada to lead an early-stage investment firm.
Ms. Lau is announcing Thursday her Two Small Fish Ventures has raised $9-million of her $15-million goal for her first seed-stage fund. She’s backed by Canso Investment Counsel Ltd. and some of Canada’s top entrepreneurs, including Wealthsimple Financial Inc. chief executive officer Mike Katchen, former Wind Mobile chief executive officer Anthony Lacavera and Red Hat Inc. founder Bob Young. “It takes a special kind of investor to be the one who makes the first bet on a company,” Mr. Young said in an interview. “The fact [Two Small Fish has] had some success already is a great indicator of better success when there are more resources to bear.”
Two Small Fish has backed 22 companies since its founding in 2014, making “angel” investments of between $20,000 and $50,000 each. Its best result came from backing Winnipeg restaurant delivery service SkipTheDishes Restaurant Services Inc. – a 2016 investment that yielded a 10-times return when it was sold 18 months later to Britain’s Just Eat PLC for $110-million. The new fund will invest between $50,000 and $500,000 initially a startup in companies aiming to achieve “network effects” by bringing together vast numbers of users on digital platforms, based on the concept that networks are more valuable as more people join them.
“In Canada we don’t have an Andreessen Horowitz or Greylock Partners” – well-regarded Silicon Valley venture funds started by founders of giant internet companies – “so I said, ‘Why don’t I do it?'” Ms. Lau said.
Ms. Lau is married to Wattpad founder and CEO Allen Lau, and she played a critical role in the early years of the company – a social network for readers and writers of amateur fiction that has raised more than US$115-million in venture capital and struck deals to license works on its site to book publishers and film studios. Ms. Lau oversaw community and content as Wattpad grew into a platform with tens of millions of users.
“There are very few people who have had the experience of growing a large-scale internet company natively here in Canada,” Ms. Lau said. “I’m very fortunate to be one of them.”
“She’s a very good operator and a very good seed investor,” said Matt Golden, managing partner at VC firm Golden Ventures, who has known Ms. Lau since the early 2000s and also backed SkipTheDishes. “There’s a dearth of female [venture capital] general partners, particularly in our ecosystem, so we’re thrilled to see Eva emerge to help fill that void."
Ms. Lau, a Hong Kong native who met Mr. Lau when they were studying engineering at University of Toronto 30 years ago, was an early employee at Delrina, one of Toronto’s few successful software startups in the early 1990s, which was later snapped up by U.S.-based Symantec Corp. The connections she and Mr. Lau (who joined Delrina after she did) made there served her well: they later worked for Brightspark Labs, a tech incubator founded by two Delrina co-founders, while former Delrina senior executives Dennis Bennie and Bert Amato are backers of her new fund. “She’s smart, tenacious, honest to the core and a straight shooter,” Mr. Bennie said in an interview. “She’s an example of exactly the people we need to continue building” Toronto’s tech sector.
The Laus launched Two Small Fish in 2014, where she invested, mostly in Canadian tech firms, on behalf of the couple and two high-net worth friends. Mr. Lau is an adviser and investor in the fund. Ms. Lau said Two Small Fish started as “a fun project” that gradually became a more serious investment vehicle as she met hundreds of startups.