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<br/> The Canadian VC

TORONTO | Back in 2011, there weren't any Canadian-focused venture capitalists. Yet, the CEO of OMERS Ventures, the venture arm of the giant pension fund, committed himself to Canada—about 90% of his 29 investments are domestic—and it's been a massive success. He helped take the wildly successful e-commerce company Shopify public in 2015. Three of his other investments have been sold, and 25 remain active. By 2020, he'll have invested $1 billion in Canada—and Ruffolo says there's more to come.

Why Canada?

Canada has the talent, entrepreneurial spirit and culture to build the "rocket ship"—they just needed a little jet fuel to take them into space. However, when we first raised $200 million, I wasn't sure whether there was enough capacity for all of that capital to be absorbed in this country. Now we're on track to raise $1 billion. There is an incredible abundance of companies to invest in.

How is investing in Canada different than the U.S.?

We look coast-to-coast, but more than 80% of the deal flow is focused around Vancouver, Ottawa, Kitchener-Waterloo and Montreal. In Canadian venture investing, proximity is an issue—companies are so early-stage that you have to be an active investor. And success is more about the entrepreneur. In the U.S., VCs invest based on investment themes. You can't do that in Canada, because the number of companies available in a theme is far less.

How do you choose companies to invest in?

We only invest in ones that we think can become public companies, so they must have a big enough addressable market. The single thread that runs across our most successful companies is that we picked the best entrepreneur and founding team, and that's had the highest correlation to success so far.

What makes a good entrepreneur?

First, there has to be something gnawing at them that they'll go to the ends of the Earth to solve that problem. Then they have to be doing something that addresses a real problem in a potentially large market.

It takes a long time to get from start-up to IPO. Are you always adding new funding?

We ensure there's enough reserve capital to fund every single round to take them to their IPO. That's something that has not existed in this country. We then have to address access to talent—we spend the most time trying to find individuals who can scale up those companies.

What sector offers the best opportunities?

We've focused on information and communications technology, as opposed to life sciences or clean tech. And the opportunities within ICT are in enterprise software. ICT is much more homogeneous, making it easier to find and invest in and scale up these companies.

What's your favourite holding?

It's like choosing children! What I would say is that the ones that are hopefully going to follow Shopify are Hootsuite and Wattpad. That's a phenomenal company.