Eyesafe 2020
Features Money

Invest in Us: What We Offer and What We Need to Do

Industry West caught up with some Saskatchewan investment pros to ask what makes our province stand out in the pack, and what we need to do more of to attract more dollars. Here’s what they had to say.

Evelyn Cerda, Valhalla

Evelyn Cerda, Valhalla

Evelyn Cerda, President, Valhalla Angels Saskatchewan

Q: What makes Saskatchewan attractive to investors?

A: “Saskatchewan is home to many innovative entrepreneurs and we have a strong, diversified economy that has protected us in the past from some hard economic periods. Some of our key sectors like agri-food, energy, finance and health are currently experiencing transformative changes through technology due to their relevance in tackling the world’s top concerns. Saskatchewan is also making its mark in the tech space through companies like Skip the Dishes, Vendasta, Mentor, Intragrain Technologies and Coconut Software. Thanks to these and other trailblazing companies, investors are now looking at Saskatchewan for more promising startup companies.”

Q: What does Saskatchewan offer investors that makes us stand out?

A: “We have incredible talent. Saskatchewan is home to some of the most hard-working founders and employees you’ll ever meet, and people across Canada recognize that. Another advantage we have is our tight community. This makes it easier for investors to quickly connect with other investors, mentors, advisors and even early clients when looking into potential companies. People are accessible and happy to help.”

Q: What does the province’s entrepreneurial community need to do to attract more investment?

A: “We need to get better at thinking big, telling our story and getting our entrepreneurs ready to compete in the major leagues. Even though we are getting better at embracing and sharing our success stories, we still have more work to do in this area. For founders, they need to remember that nobody is going to come knock on their door to learn about what they are doing, and so they need to get their stories out there to reach people outside of Saskatchewan. For us who work and support entrepreneurs, we need to make sure that startup companies have a good understanding of how to get to the next level and how to push for big, bold visions that can translate into great companies. Another way to attract more investment is through policy. With the new Saskatchewan Technology Startup Incentive (STSI) program, we have managed to incentivize additional investment into technology companies. We would like to see this expand into other sectors, and maybe some innovative mechanisms or financial tools to incentivize outside investors.”

Eric Clark, PFM Capital Inc.

Eric Clark, PFM Capital Inc.

Eric Clark, Partner & Chief Operating Officer, PFM Capital Inc.

Q:    What makes Saskatchewan attractive to investors?

 A: “Saskatchewan is a great place to start a business. The people of this province really support their own, so it is a great place to build a base of support from which to export your product or service throughout the rest of Canada or the world. We have an abundance of businesspeople who have had success in a variety of industries that constantly give back and support the next generation of entrepreneurs. Combining that with organizations like Co.Labs, Cultivator, WESK, and the Chambers of Commerce through the Province really creates an atmosphere where businesses can thrive.”

Q: What does Saskatchewan offer investors that makes us stand out?

 A: “Saskatchewan has a very robust and diverse economy. We have energy, agriculture, mining, and all of the supporting industries that go along with them. In addition, there are new sectors that are being developed all the time, like the tech sector here, where investors can place their capital. On top of all that, the quality of entrepreneurs in this province is second to none. They are well-educated, coachable and hardworking.”

Q: What does the province’s entrepreneurial community need to do to attract more investment?

A: “Let’s be honest, Saskatchewan is a long way to go from Canada’s major financial centres—Toronto, Montreal or Vancouver, and a relatively small market compared to those zones. We need to be prepared in this Province to support our own entrepreneurs. As the capital providers that are here and placing capital constantly, we need to build the network into other capital providers throughout Canada so that we can bring in that additional investment when it is needed. That is something that we do, and another way that we help our local entrepreneurs.”

Laurie Dmytryshyn, PIC Investment Group

Laurie Dmytryshyn, PIC Investment Group

Laurie Dmytryshyn, Chief of Equity Investment, PIC Investment Group

Q: What makes Saskatchewan attractive to investors?

“Saskatchewan has an abundance of natural resources such as mining, agriculture, and oil and gas and Saskatchewan is an export driven economy. We are entrepreneurial and have been the home to many successful innovations and entrepreneurs such as Murad Al-Katib of AGT Food & Ingredients that have helped grow industries from the ground up. Investors are starting to see that Saskatchewan is becoming very important to the rest of the world.

In addition, Saskatchewan’s technology sector is starting to flourish, thanks in part to efforts by Innovation Saskatchewan and Jordan Dutchak and team for building Saskatchewan’s first incubator program—Co.Labs.  This program has generated significant excitement in our growing tech sector and has brought entrepreneurs and investors together from inside and outside the province.  Conexus has also entered the space and has built their own incubator in Regina—Cultivator and has started two new Venture Capital Funds. Saskatchewan tech companies such as Katherine Regnier’s Coconut Software are achieving success and are putting Saskatchewan on the map.”

Q: What does Saskatchewan offer investors that makes us stand out?

A: “Saskatchewan offers investors access to business incentives such as the Saskatchewan Technology Start-Up Incentive (STSI) non-refundable tax credit.  This program is highly effective to attract investors by helping to de-risk early stage investing and create new businesses and jobs in our Saskatchewan economy. There are many other government support programs available to entrepreneurs that are invaluable such as IRAP, SR& ED, Women Entrepreneurs of Saskatchewan and Western Diversification’s BSP. The assistance provided from these programs have helped many of our entrepreneurs grow and stand out.

Saskatchewan also offers a highly educated workforce that produces high quality goods and services. Investors from outside of the province often comment on how down to earth, helpful and friendly people are in Saskatchewan. Winters in Saskatchewan are tough, but it has helped make Saskatchewan people stand out due to our helpful and friendly attitude and our strong work ethic. Investors are attracted to this when they come to Saskatchewan as investors invest in people first!”

Q: What does the province’s entrepreneurial community need to do to attract more investment?

“Most of the Saskatchewan companies we see at PIC tend to be earlier stage than out-of-province companies. For attracting more investment, there appears to be a need for enhanced collaboration between early stage entrepreneurs and the investor community. Entrepreneurs should form relationships with potential investors prior to seeking investment. For example, one of our most recent investment opportunities we are looking at is a Saskatchewan company that we have turned down multiple times. They kept us on their investor list and would send us weekly performance metrics. As we watched their metrics grow, we started getting interested and knocked on their door instead of the other way around.

We have the key ingredients here to attract more investment and we have seen significant growth over the past few years. I am excited to see what Saskatchewan will look like in five years as our companies achieve successful exits and momentum continues to build!”

Sean O'Connor, Conexus Credit Union

Sean O’Connor, Conexus Credit Union

Sean O’Connor, Venture Capital Fund Manager, Conexus Credit Union

Q: What makes Saskatchewan attractive to investors?

A: “We’re a province that has consistently punched above its weight in the tech space, especially when factoring in how challenging it has been for our startups to attract capital. Skip The Dishes, Solido, GasBuddy, iQmetrix, Vendasta, 7shifts and Coconut Software were not by accident. These are world class companies that were founded by Saskatchewan entrepreneurs. We have an unproven theory that believes our short generational gap from farming creates a unique entrepreneur that has a roll-up-your-sleeves, fix-it-with duct tape mentality, which makes them extraordinary product builders. With our founders starting to get real access to capital, we believe we’re going to see a wide array of globally successful tech companies emerge from the province.”

Q: What does Saskatchewan offer investors that makes us stand out?

A “First and foremost, our founders are exceptional. Their ability to build is extraordinary, and their Saskatchewan roots create a dynamic that’s built on transparency, humility and respect. In the past few years, the ecosystem has started to catch up to the quality of our founders, offering investors a 45% tax credit through the STSI program, and surrounding these companies with critical support from places like Cultivator and Co.Labs. Moreover, the smallness and inclusiveness of our ecosystem allows our startups to find employees, customers, and mentors quickly to help them scale their business.”

Q: What does the province’s entrepreneurial community need to do to attract more investment?

“The COVID-19 pandemic has not been friendly to the Saskatchewan startup ecosystem. In 2019, our province saw $114M of venture capital deployed, mostly to our growing tech companies. This was a significant milestone as we raised more in 2019 than the previous 5 years combined. However, through the first 6 months of 2020 we’ve only seen $8M deployed in Saskatchewan as a result of COVID. Apart from a few notable investors, our province’s angel investors have largely scaled back their activity due to the uncertainty caused by COVID. Couple that with how outside venture capitalists have been unable to visit our ecosystem, and our seed stage companies can quickly run out of options for potential investors. In the short term, we need to find new and creative ways to get early stage investors ready to invest in our provinces early stage companies. In the long term however, we just need our brightest tech companies to stay on their trajectories. The ecosystem will truly take off when we start to see the big exits in the future from 7shifts, Coconut Software, Vendasta, Andgo and SalonScale. Ottawa’s ecosystem isn’t where it is today without the success of Shopify. Waterloo isn’t where it is today without Blackberry/RIM. For an ecosystem to truly hit their stride, we need our top performing tech companies to keep hitting their next milestones and showing that we have some of the best founders in the world.”

Trevor Phenix, Broad Street Bulls

Trevor Phenix, Broad Street Bulls

Trevor Phenix, Partner, Broad Street Bulls

Q: What makes Saskatchewan attractive to investors?

A: “The province is very rapidly growing its pool of next generation entrepreneurs and early stage companies, but we are still early in that evolution. Our ecosystem is in the process of building an understanding of what will make companies successful. With that, founders are learning how to grow, shape, and pivot their startups, as well as when it’s time to start over.

Because fewer options for raising capital exist here than in more developed ecosystems, investors play an outsized role in facilitating that evolution. It’s a close-knit community, so the reputation, experience, and relationships of an investor can be built relatively quickly. We see this as an opportunity for both structured funds and the individual angels to impact the development of the ecosystem and rapidly become valuable early-stage partners. Investors can be choosy and opportunistic with how and when they invest, having a stronger influence on terms of investment and benefiting from more significant growth.”

Q: What does Saskatchewan offer investors that makes us stand out?

A: “This province is built on a foundation of hard-working entrepreneurs from traditional business sectors. These individuals are now channeling that ingenuity and work ethic into new, tech-focused start-ups with great potential for scale. In recent years, these entrepreneurs have come together to form a stronger community than ever before. This is in large part thanks to the province’s incubators, mentors, angel investors, and structured funds who have emerged as ecosystem leaders and trailblazers. This close-knit community provides an advantage to those investors within in.

Furthermore, the Saskatchewan Technology Startup Incentive (STSI) is one of the best investment incentive programs in the country. The 45 per cent tax credit gives start-ups the opportunity to more easily raise capital from local investors, which benefits the entire ecosystem.”

Q: What does the province’s entrepreneurial community need to do to attract more investment?

A: “Our entrepreneurial and business community needs to support and celebrate both the successes and failures within the ecosystem. This needs to happen from many channels, not just startup founders and funders. It’s important that experienced entrepreneurs from more traditional business become the cheerleaders for individuals and groups with innovative ideas. Industry and business leaders who would typically be skeptical of, or even an obstacle to, new ideas should seek to support startup founders by offering mentorship, making connections, and providing funding.

Government needs to continue supporting the tech sector, with STSI being a key feature of that support. This and any other measures which help an entrepreneur de-risk the leap of faith that it takes to found a start-up will facilitate new, innovative ideas in the province. Increased education for the next generation of entrepreneurs and tech founders will also create sustainable interest in Saskatchewan tech and startups.”