Photo: Jordan Levy, general partner at Softbank Capital NY, toured the Communitech Hub with Startup Grind Toronto.
When you want answers you go straight to the source. But it’s even better when the source comes to you.
Jordan Levy, venture capitalist and general partner at Softbank Capital NY, came to Waterloo Region last Friday with some hard-hitting answers – and some questions of his own – about U.S. and Canadian investors.
Levy met with five companies and toured the Communitech Hub, before holding a fireside chat put on by Startup Grind Toronto.
During the chat, he asked why wealthy Canadians aren’t investing like their counterparts in the U.S. He also questioned the lack of competition among Canadian investors for the good deals.
Levy also pointed out that Israel, mainly Tel Aviv, attracts the third largest amount of venture capital investment in the tech sector, yet has the same population as Kitchener-Waterloo and Toronto combined. He asked why Toronto and Waterloo Region aren’t competing at the same level.
In a one-on-one interview with Communitech, Levy expanded on his thoughts.
Q – What brought you to Waterloo Region today?
A – Startup Grind invited me to tour to see how exciting the activity is in Kitchener.
Q – You built your portfolio on mobile and software, but with the changes in the industry, what is the next big thing that you plan to invest in?
A – We like marketplaces. I think it’s a big opportunity; it’s disruptive and it has great potential. I like the IoT world and we’re spending a lot of time in it. We’re also spending a lot of time in healthcare – not healthcare companies – but disrupting the healthcare industry.
Q – How do you know your gut is right about a company? And have you ever been wrong about a company because you didn’t listen to your gut?
A – Never.
No, of course we’re wrong – a lot – probably more than we’re right.
But you use your experience. I’ve been doing this a long time, and you’ve got to use your knowledge base. You build an investment hypothesis, if you will, about certain sectors. But ultimately, when it comes down to it, the people that you’re investing in are the most important aspect of the investment. And if you like them, you invest in them.
Q – What attributes make up that likability that you look for in entrepreneurs?
A – Intellect, passion, leadership, knowledge and flexibility.
Q – You’ve been talking about community building in Buffalo. Why is it so important to you?
A – In my non-business life – which is what I do in New York – is building a tech community in Buffalo, and creating that mindset that you can actually start a business, grow it, and succeed by doing it in Buffalo, which is the same thing that you want to do here in Kitchener. Frankly, that’s the same thing that they want to do in Toronto; creating a change in attitude about what is possible, and that’s what I’m spending my time trying to do.
Q – How have you found the progress thus far?
A – So far, we’re having more success than I had actually thought when we embarked on this endeavour. We had a confluence of activities that happened all at once. We were fortunate that they all came together at the same time, and as a result, it actually changed a lot of peoples’ attitudes.
The first thing that you need to change is the psychology of people for what is possible, then you’ve got to go try and make it possible.
Q – What advice do you have for Canadian startups seeking to connect with U.S.-based venture capitalists?
A – The first thing you’ve got to do is to get them here, and that has proven to be more elusive than we would have thought it to be. I live in Buffalo and this is my second trip in 10 years to look at deals in Toronto, let alone Kitchener.
So you have you change peoples’ mindsets about what’s here and how great things are. I think that has to be a community and not just an individual.
For an individual, it’s easy. You’ve got to get on an airplane and you’ve got to go and visit. But as a community, you’ve got to work together to change the mindset of obstinate, arrogant American VCs, who all believe that there is plenty to do there, so we don’t come here.
Q – Now that you’re here, how does it line up with your previous perception?
A – I have seen much better companies than I had expected to. I am very impressed with the passion of a lot of people that are interested in building a startup and tech community. I am very impressed with the entrepreneurs that I have met; I think there is a lot of talent, a lot of passion and a lot of opportunities here, and it’s a shame that it has not been given proper focus.
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This is Part 1 of a three-part series of Startup Grind events in Waterloo Region. Startup Grind Toronto has partnered with Communitech and UW's Velocity program to create a longterm presence in community.
Part 2 features Jim Scheinman from Maven Ventures on Oct. 9. Register here.
