Skip to main content

From left to right, Paul Lacerte, Jeffrey Cyr, and Stephen Nairne of Raven Indigenous Capital Partners.Justin Van Leeuwen/Handout

A slew of North American institutional and impact investors are backing what will be the largest – and one of the few – venture funds that invests specifically in Indigenous-led startups.

Vancouver’s Raven Indigenous Capital Partners is announcing Thursday that it has raised $46-million of a $75-million goal for its second fund to back innovative Indigenous enterprises with a mission to improve well-being in their communities.

Backers include Crown corporations Business Development Bank of Canada (BDC) and Farm Credit Canada, Telus Corp.’s Pollinator Fund for Good, Vancouver City Savings Credit Union, Bank of America, Chicago’s MacArthur Foundation and several wealthy families and individuals. Raven closed its first, $25-million fund early last year.

“I have all the confidence in the world they will be able to reach their target size because it’s such a differentiated offering in the market and it’s a growing need as we have just seen the Indigenous startup community grow by leaps and bounds,” said Alison Nankivell, senior vice-president of fund investments with BDC Capital.

Raven is an impact investor, meaning it aims to make a social impact, unlike typical venture capitalists that shoot for high returns by aiming to back massive winners that make up for a majority of investments that fall short.

“That’s not our philosophy,” said Jeffrey Cyr, one of Raven’s two Indigenous managing directors, who is Métis. Rather, Raven looks to bring jobs and other benefits to Indigenous people. “Our philosophy is, we want all the businesses to succeed, we want to lift all boats,” Mr. Cyr said. “We don’t promise outsized returns. We want people to be in it for the same value-aligned reasons we are.”

Chief investment officer Stephen Nairne said Raven looks for net returns of 10 to 12 per cent annually plus “a transformational impact story and clear pathway to a responsible exit.”

According to Royal Bank of Canada, the domestic Indigenous economy was worth $30-billion in 2020 and is set to reach $100-billion by 2025, with the number of Indigenous people and business owners growing far faster than the overall population.

Funding for Indigenous entrepreneurs has typically come in the form of debt. Ottawa provided funding 35 years ago to 59 Aboriginal Financial Institutions (AFIs), which then lent the capital out to entrepreneurs. But there has been an acute shortage of the type of equity funding best-suited to young, innovative companies, whose growth could help Indigenous people contribute more to Canada’s economic growth, a key goal of both government and Indigenous leaders.

“I think the more options that are available to the entrepreneur, the better,” said Shannin Metatawabin, chief executive officer of the National Aboriginal Capital Corporations Association, which represents AFIs.

Raven grew out of a gathering in the Muskokas in 2017 about innovative social finance and impact investing in Indigenous communities. Mr. Cyr, past executive director of the National Association of Friendship Centres and former senior policy adviser with the federal government was there. So was Paul Lacerte, who had led the B.C. Association of Aboriginal Friendship Centres and co-founded the national Moose Hide campaign in 2016 with his daughter to encourage males to speak out against violence toward women and children.

Also present was Mr. Nairne, a non-Indigenous money manager for the Lundin business family’s investment office who had previously worked for the Foreign Affairs department and Export Development Canada.

In conversations, the trio felt there was momentum for social change on the heels of the Truth and Reconciliation Commission’s final report in 2015. But they also saw a lack of early stage capital that could stimulate Indigenous communities.

“For most Indigenous people, there is a mistrust of money and a mistrust of people with money,” Mr. Nairne said. “We needed to do whatever we could to effectively decolonize the investment process and create culturally safe pathways for Indigenous people to be able to access capital and capacity-building support.”

Part of the answer was to ensure Raven was majority Indigenous-owned and applied a rigorous impact-measurement framework to ensure companies fit their mission. The team scores startups for the share of owners and leadership that are Indigenous and what opportunities they offer for employment, skills training and other benefits in Indigenous communities.

Startups must score 60 out of 100 using its methodology, and ideally 80. Recommendations for investments go to an all-Indigenous investment committee made up of Carol Anne Hilton, CEO of the Indigenomics Institute, First Nations Technology Council CEO Denise Williams, and Clint Davis, ex-vice-president of Indigenous banking with Toronto-Dominion Bank.

Mr. Cyr, Mr. Lacerte and Mr. Nairne set out in 2019 to raise their first fund, well surpassing their original $5-million goal. Mr. Lacerte and Mr. Cyr, who bring deep networks across Indigenous communities, took Oxford University courses to build up their investing knowledge.

The group chose the name Raven as a nod to the creature in Indigenous lore that “is the exact combination of bringing light and magic” and evokes “the notion of entrepreneurship and creativity,” Mr. Lacerte said.

Raven has backed 11 companies, including online sustainable cosmetics vendor Cheekbone Beauty and Virtual Gurus, a virtual-assistant startup that targets clients from the BIPOC and LGBTQ+ communities.

Cheekbone founder Jenn Harper said her company, based in St. Catharines, Ont., “would not be anywhere near where we are today” – including selling products through Sephora – “without Raven’s support and capital. Because of them, we’re able to do many things.”

Raven plans to invest up to half of its latest fund in the U.S., up from 10 per cent of the first fund.