Arlene Dickinson has a different take on diversification than most investors. Instead of putting her money into a broad range of businesses, the chief executive officer of Calgary-based Venture Communications and former Dragons' Den star is focused entirely on Canadian-based food and health companies.
It's a strategy that works for the marketing communications entrepreneur and venture capitalist, given her background and beliefs. Ms. Dickinson is behind District Ventures, Canada's first "accelerator program" for packaged-goods companies in the health and wellness sectors, and recently launched District Ventures CPG, her first venture-capital fund to invest in early-stage companies in those sectors.
The Globe and Mail recently spoke to Ms. Dickinson about what's in her portfolio and the old-fashioned way in which she built her wealth.
When did you start investing?
When I was in my early 30s, I worked with a programmer who was really into investing. He was telling me about what he was doing. I told him I didn't know anything about the market and was worried about losing money. He introduced me to a broker who was a friend of his and who taught me three very interesting things: Don't be greedy, always leave some money on the table and you can't go broke taking a profit. That has guided my investing philosophy ever since. I thought it made good common sense. My first investment was $1,000 in an oil and gas services company. It seemed like a fortune to me at the time.
How did you build wealth from there?
As an entrepreneur, I don't have a pension, so I needed to figure out early what I could do. I did well on a couple of homes I purchased over time and made enough money so I had a bit of a nest egg. I didn't have millions of dollars; it was thousands of dollars at the time. What they tell you is true about compounding and putting a little bit of money aside every month. We don't want to believe it. We think it's about getting rich quick. My broker also got me into a few stocks that did really well. One was IBM, but my investments back then – around the early 1990s – were predominantly in oil and gas. But then I started to become afraid of the public markets. They were so volatile. I started to think more about investing in entrepreneurs and private companies.
What was the first private investment you made?
One of my employees came to me and said he wanted to start a travel adventure company in Bangkok, and asked if I would lend him $30,000. I thought a lot about it. He lived there before and knew the area and I wanted to support him. In three or four years, he paid me back and I made a bit of money. His company, the Smiling Albino, continues to do incredibly well. That gave me so much satisfaction. It was a different satisfaction than earning money in the public market. It was probably more risky, but it felt better. It also married with what I was about, which was helping entrepreneurs. As a marketer, that's what I did for a living – help businesses. It has been the theme of my life ever since: thinking about how you can work with individuals and help their businesses to grow. That's when I became a venture capitalist.
What's in your portfolio today?
About 80 per cent of my portfolio is in my private investments and the rest in individual stocks. My focus is on food and health in both my public and private portfolios. I know diversification is important, but it's not just one area of food or health. I am trying to diversify in those two sectors. I'm betting that the world needs more food, I'm betting that the world has to care about its health more and making the connection with food and health. I'm 100-per-cent invested in Canada. It's a philosophy. I'm bullish on our market, our country and the sector. These are things I feel strongly about and can support personally.
What are some of your most successful private investments to date?
There are three that have done very well; Balzac's Coffee Roasters, OMG's Candy and the Greenlid compostable compost bin. These are all companies that came on [Dragons' Den] that I invested in and have gone on to do very well individually. I remain an investor in those three companies. The other investments are in companies we're looking at through the fund and some I've invested in personally.
What has been your best investment move to date?
My own efforts as an entrepreneur. It has taken a lot of capital. People might think that's a philosophy versus an investment. It's an investment. You have to determine that you're going to put money behind yourself as an entrepreneur. It has allowed me to do these other investments.
What about your worst move?
Nothing major. A couple of smaller companies that I invested in didn't pan out. There have been some smaller deals where I made a bet in the wrong way, but that's part of learning in investing. I have learned a lot about due diligence since. I've also learned that ideas are important, but not as important as the entrepreneur and team around them. The ethical side of it is also very important to me. It's a soft thing, but for me, it's become an important aspect. I want to invest in people I respect.
This interview has been edited and condensed. For this series, a high-net-worth investor has investable assets of more than $750,000.