One of Canada’s best-known startup financiers, Janet Bannister, has struck out on her own, launching a venture capital firm that makes a clever play on her name and promises high-touch support for founders.
Ms. Bannister’s Staircase Ventures has raised $22-million for its first fund, with a goal of reaching $30-million. Investors include Royal Bank of Canada, wealthy individuals and family offices. Some backers will also advise Staircase portfolio companies, including PointClickCare Inc. co-founder Mike Wessinger and former Shopify Inc. chief product officer Craig Miller.
“When Janet told me she was thinking about doing a fund I said count me in for whatever you want,” said Mr. Miller, whom Ms. Bannister hired out of university in 2006 as she started to build online classifieds business Kijiji for eBay Inc. Ms. Banister left her executive job with the e-commerce giant in 2014 and joined Real Ventures, staying for eight years, the last two as managing partner.
Staircase will look for the same types of deals Ms. Bannister did at Real. The firm will initially invest $500,000 to $2-million in 10 to 12 Canadian software startups with early customers and “product-market fit.”
But Staircase is also layering on a humane approach to the business by offering more than money and advice to budding entrepreneurs. Staircase will pay for executive and health coaches and financial advisers for its founders and give them cash to cover child care, elder support or other family needs. Staircase will also pay to connect founders with peer support groups.
“A lot of early-stage venture capital firms say the most important thing we think about when we invest is the founders,” Ms. Bannister said. “Then they invest and put all their energy and resources into building the business as opposed to building the founders.”
Her goal is to help founders grow and develop personally “as quickly as their companies.”
A Staircase investment comes with another unusual perk: Staircase-backed founders will get a cut of fund profits. Most venture capitalists charge investors 2 per cent a year of fund size in fees and keep 20 per cent of profits their investments generate. Ms. Bannister, the firm’s sole general partner, will give one-fifth of her profits to founders and advisers “so they are incentivized to support one another. It’s part of my philosophy and values: I want companies to feel they’re part of something bigger.”
Anthony Mouchantaf, director of venture capital with RBC’s innovation banking group RBCx, said Ms. Bannister’s plans to put some investor capital into founder personal growth “is unconventional and clever. I like it. When you invest in seed financings, founders are the company. We’ll see how it plays out but it’s definitely a bet worth making.”
Ms. Bannister’s backers are also betting on her vision and reputation despite challenges at Real during her time at the Montreal-based firm. Real was an early force in Canada’s 2010s tech renaissance, raising a string of funds, drawing backing from global investors and financing many prominent Canadian startups. Ms. Bannister’s investments included stakes in League Inc. and BenchSci Analytics Inc.
But Real also experienced inner tumult prior to Ms. Bannister becoming managing partner in 2020. Two of three founding partners stepped back to part-time roles and investors grew frustrated with Real. Among their complaints were that Real spread itself too thinly by backing too many companies and didn’t sell down positions to lock in gains. Some Quebec investors, notably the provincial government, were unhappy with the turnover and with Ms. Bannister running Real from Toronto and hiring a partner there.
Ms. Bannister won praise for improving Real’s management but was unsuccessful in raising a new fund before announcing her departure last fall. But she had built a strong reputation among founders and funders alike. “Janet asks questions and listens,” said Bryn Jones, chief executive officer of PartnerStack Inc., a Toronto software company whose online platform helps digital companies attract and work with sales and distribution partners, which she backed in 2015. “A lot of venture capitalists don’t bother asking questions and don’t listen. She’s empathetic and hard working, analytical and cares about the person across the table.”
Mr. Wessinger said in an interview: “I like the way she thinks about needing to support these founders in a way that’s more than just giving business advice and some capital. Everybody I talked to seems to be impressed with her.”
Ms. Bannister said leaving Real was “a tough choice” but she wanted to create “a new type of venture capital firm that would change the status quo. I love what I do and care deeply about founders, their success and development and seeing them succeed as individuals.”
And while it is a brutal year for technology, with more layoffs, writedowns and insolvencies (not to mention Silicon Valley Bank’s failure), Ms. Bannister said the timing is right to launch a venture fund. “Valuations are down significantly and the types of entrepreneurs starting a business now are more resilient and focused,” she said.