Former Dragons' Den star Arlene Dickinson is raising a venture-capital fund to invest in consumer-packaged-goods startups backed by of one of biggest dragons in Corporate Canada: George Weston Ltd.
The giant food and retail conglomerate has agreed to kick in $5-million if Ms. Dickinson reaches her minimum target of $25-million, and to furnish an executive, Philip Shaw, former chief executive officer of Weston-owned Ace Bakery, to serve as a fund director. Ms. Dickinson is investing $1-million personally and said in an interview she was almost halfway toward her fundraising target.
"There's a need in the marketplace for this fund," which will focus on startups in the food and beverage, beauty, and health and wellness categories, she said.
"It was obvious to me there was an opportunity to help build some bench strength as it relates to what I already think is Canada's strength," she said. "We've got agriculture and health as a core competency … These are sectors that haven't had a lot of capital invested in them, so it made sense to me that this was a big opportunity."
The George Weston investment may seem to be a pittance for a public company with $2.6-billion in cash and short-term investments and capital-spending plans totalling $1.6-billion this year between its Loblaw Cos. Ltd. and Weston Foods subsidiaries. But it is the conglomerate's first venture-capital investment, a noteworthy milestone at a time when Corporate Canada faces continued calls to invest more in innovation.
While Canadian early-stage investors are typically drawn to oil and gas, mining and high tech, Ms. Dickinson's fund is at least the third recent venture-capital firm to focus on consumer goods, along with Vancouver's Campfire Capital and Toronto-based BrandProject.
"This came across our desk and it looked like an interesting opportunity," George Weston spokesman Geoff Wilson said. "It shows we are open to ideas about enabling growth in Canada and the Canadian consumer-packaged goods" space. He acknowledged, "This is a bit of a departure. We tend to invest in the companies we're operating. But we are looking to grow. This is not maybe the primary form of growth, but we'll see where this may take us."
Snagging an investment from the company controlled by Canada's billionaire Weston family is a coup for the 59-year-old Ms. Dickinson, who left Dragons' Den a year ago after eight seasons to build her District Ventures Accelerator in her hometown of Calgary.
The organization has since hosted at least a dozen young consumer-packaged-goods firms, helping them with a range of tasks from marketing to accounting to prepare them to pitch investors for capital.
Ms. Dickinson said she didn't have a "serious connection" into the Weston family empire before she reached out, but explained, "To me [George Weston] was the best possible investors that I could get … It was just one of those things that worked out well on both sides."
According to the offering memorandum, the fund, called District Ventures CPG-1 LP, will focus primarily on backing Canadian consumer-packaged-goods startups raising up to $4-million in growth capital.
The document trades heavily on its leader's name, stating: "Arlene Dickinson is one of Canada's most well-known and iconic entrepreneurs." It cites research showing "more than 60 per cent of Canadians recognize Ms. Dickinson and over 90 per cent of these associate her name with success."
Ms. Dickinson has a classic entrepreneurial success story. Nearly three decades ago, a Calgary judge refused to grant her custody of her four young children until she gained financial independence. She juggled various clerical jobs until securing a position in 1988 at the advertising division of Calgary-based Venture Communications. After a decade of working around the clock, she bought control from the firm's two partners in 1998.
The Dragons' Den gig turned Ms. Dickinson into a household name, and some of her investments through the business-pitch show have prospered, including candy makers Action Candy Co. (maker of Pür gum) and OMG Inc., and Southern Ontario café chain Balzac's Coffee Roasters.
Ms. Dickinson told The Globe and Mail two years ago that she had personally invested $2-million in Dragons' Den investments. She has also written two books, Persuasion and All In, and launched a website for entrepreneurs, called YouInc.com.
The document names Brandon Kou, former general manager of Steve Nash Enterprises, as its venture manager and Ron Duke, group chief financial officer of Ms. Dickinson's group of companies, as a director. Mr. Duke was former chief operating officer of Lavalife Corp., founded by Ms. Dickinson's onetime Dragons' Den colleague Bruce Croxon.