Kelowna's reputation for tech is attracting angel investors as well as entrepreneurs - InfoNews

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Kelowna's reputation for tech is attracting angel investors as well as entrepreneurs

Valhalla Private Capital's Grant Lawrence
November 20, 2019 - 6:00 AM

Kelowna is regularly touted as one of the best places to start a new business in Canada.

There are entrepreneurial courses at Okanagan College and UBCO. Accelerate Kelowna and the Innovation Centre focus on the tech sector and there is a plethora of new business starting in all sectors.

Kelowna is the centre of a B.C. Interior tech world put on the map in 2007 when Disney bought locally created Club Penguin for $350 million.

While that turned into a huge success, it started on a small scale, just like most new ventures where someone has a great idea that could change the world.

But it takes more than an idea. It also means knowing where to get the money to fund your fledgling business.

“Friends and family would be the early stage of investment for many start-ups,” Grant Lawrence, Kelowna chapter president of Valhalla Private Capital, told iNFOnews.ca. “After that, the next step is the angels. They come into play before the banks or venture capitalists.”

The angels he’s referring to are angel investors. Valhalla is one of about 40 angel investment firms in Canada. It includes Kelowna as one of its four branches (the others are Edmonton, Calgary and Vancouver) because of its booming entrepreneurial environment.

It claims to be one of the most active and effective in the country.

Banks and venture capital companies are not keen to take on the high risk that comes with start-ups, Lawrence said. They tend to look at businesses that are a little more established and have less risk than those still at the friends and family funding stage.

The angel term is about 150 years old, stemming from the days when patrons of the arts were referred to as angels.

In the modern world, potential investors have to meet government regulations, based on income and assets, to become angels. Some of the rules for "eligible” investors include having a minimum income of $75,000 a year with assets of $400,000 (there are a number of other criteria, depending on whether, for example, spousal assets are included) while “accredited” investors need higher incomes and assets.

Valhalla also looks for investors who want to give something back to the community. About 75 per cent are former clients (founders).

While always on the lookout for new angels to join the organization, Lawrence is also bombarded with “founders” – the fledgling businesses who need investment to move to the next level.

He gets about five calls a week and is the first screen the founders have to get through in order to qualify to make their pitches to angels. Pitch nights are held once a month so some 2,000 prospective founders are whittled down to the 75 who actually get their 10 minutes to pitch to the investors, usually only four but sometimes five per night.

There are also two weekend Founder Bootcamps each year that educate entrepreneurs on funding sources and options and how best to make their pitches and other training sessions offered by Valhalla.

It works a bit like the hit TV serie, Dragons Den but, Lawrence stressed, the founders who make the cut are screened on the quality of their business ideas, not on their entertainment value.

Still, it doesn’t hurt for a start-up to find their best salesperson to make the presentation since the inventor isn’t always the best communicator.

And, while a lot of what Lawrence deals with are tech companies, it’s not limited to that field.

In a recent session in the Lower Mainland, one pitch came from a woman marketing the fermented kombucha drink who had already sold a million units but needed investment to expand. Another was marketing technology that helps cities keep track of usage of its parking spots.

For more information go to the Valhalla website here or contact Lawrence at 250-766-5250


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