We wanted to talk about the importance of local venture capital and what it means for Saskatchewan. We reached out to Grant Kook, president, CEO and founder at Westcap Mgt. Ltd. to see what he had to say on the subject.
Industry West: Why is local venture capital important for the Saskatchewan economy?
Grant Kook: “Local venture capital is one of the key factors to a fully functional local capital ecosystem. A mature local capital ecosystem covers the full breadth of a company’s capital and entrepreneurial support needs from initial business mentorship and start-up, through to growth, expansion and succession planning. If there are missing pieces in this ecosystem, these gaps will prevent a successful and fully functional economy. Without venture capital that is local to address capital risk through the various stages of a business, there would be a gap and the economy and jobs would suffer.
The creation of a strong venture capital community in Saskatchewan is essential for both wealth and job creation—the economic impact is substantial. Local venture capital pools, like ours, can help to ensure Saskatchewan companies remain locally owned and based here in the province, which positively impacts our economy and job creation. As an example, one of Westcap’s funds under management, Golden Opportunities Fund, employs a broad-based investment strategy providing valuable and patient risk capital for all stages of a company’s life cycle. This includes early stage companies that are looking to prove out new technologies, growth companies that are looking to expand their product offering or export markets, and mature companies that are succession planning and seeking transition of ownership to the next generation. If any of these companies are forced to relocate to seek capital outside of Saskatchewan, not only are local jobs affected but very often the local culture of the business will change as well. Plus, these companies do business with other local companies, they supply and purchase products from other companies, and employ Saskatchewan people. This is the power of many coming together to invest local and impact local.
An investment by a local fund manager means an understanding of our economic cycles as a commodity-based province, and the true value of the culture of Saskatchewan businesses and people. Local capital sources also attract other investors to our province with our funds acting as the lead and local point of contact for due diligence and oversight.”
Industry West: How has venture capital in Saskatchewan changed over the years?
Grant Kook: “Looking back to when Westcap was first founded over 30 years ago, the landscape of Saskatchewan’s local venture capital sector has certainly changed. There has been a mindset shift to now wanting to support companies here at home. Today, Saskatchewan has moved away from an economy where there was little capital for small to medium-sized businesses, to one of the fastest growing innovation ecosystems in Canada with out-of-province investors not only noticing what is happening in Saskatchewan but stopping and saying ‘we better take a look at what is happening so we can be a part of it’.”
Industry West: Where do you see the opportunities for venture capital investment in Saskatchewan today and in the future?
Grant Kook: “Local venture capital is more important today than ever, and it will be important for local fund managers to stay focused on Saskatchewan companies, jobs and the value of economic activity. We need to continue to support local companies—not only through the current pandemic, but to grow, expand and create new jobs after the pandemic—to play a vital role in our economic recovery. Our mandate of patient capital, alongside years of strategic oversight, supports companies through down cycles and the unprecedented times that we are in now—that will be important now and into the future. At Westcap, we look forward to continuing to partner with Saskatchewan companies in the years ahead to ensure they remain locally owned and headquartered in Saskatchewan positively impacting local jobs and our communities.”
Industry West: For companies looking for venture capital, what value can they expect and how do they get started?
Grant Kook: “From a high-level qualitative view, we at Westcap provide valuable patient capital to companies at various stages including early stage, growth and succession so they can execute on their business strategies and remain local. To these companies, we bring much more than capital. Westcap also provides strategic value through hands-on support, guidance and governance best practices often through our involvement at the Board level.
We manage money, but we invest in people. When strong leaders and their teams can focus their expertise on the operational side of the business which they know best, Westcap can add value from a strategic and risk management viewpoint. We become their in-house advisor for mergers, acquisitions and capital markets, augmenting their deep operational expertise. This in turn enables us to bring a different level of strategic expertise to the companies we invest in, which they likely don’t currently have. It is through this partnership and added value that in turn creates a better outcome.”