Happy 20th Members and Alumni!

So after 20 years it feels like the appropriate time to send out a “wow, it's been 20 years” letter to all current and past investors we could find. I wanted to take a moment to remember where we came from and talk about where we see ourselves going, and at the very least say hello and thank you for being part of our family and community.

The number of startups you have supported has been staggering. More than $74m of capital to more than 300 companies. The development of XX funds and special purpose vehicles totaling an additional XXX under management. At our height, geographic coverage in six cities at one time, with chapters in Red Deer and Medicine Hat at one point in our history, and (just before COVID) more than 150 investors, 14 partners and employees creating a “cradle to exit” experience for more than 1,200 companies a year in 29 countries.

You were part of it, and many of you still are. This year the numbers are down for sure. We are seeing a massive shift away from “the event” being the center of gravity for Valhalla and the members. We are seeing deal flow numbers are still extremely high, but in terms of our actual investments by numbers of investments, we haven’t seen this low in a decade. We are on track to sign 12-14 deals this year, compared to upwards of 20 deals in 2020. So far we have funded SprayWerx, Mach32, Asset Market, Aryton Energy and three more have been funded - and we will send you out announcements on Delphi  and the contracts they’ve signed as well as the next round on deals you have seen in the last six months.

Do You Remember That Deal?

We’ve had some challenges with our presenters for sure. We are still the only group that invested in an Axe Murderer, I hope… We lost money on sure things like Baby Gourmet, while Innovative Trauma Care and Genesis Technical Systems hold on after so many years. Our first funded deal was called WaytoGolf and the investor is now an MLA in the Alberta government. We saw Synondon as our first ever deal and it went on to be publicly traded.

But there were a lot of “purple shirts”. When Terry Booth got his first exit and wore the new purple shirt it became a tradition in Calgary that spread to other chapters. You Vancouver types probably haven’t caught this one yet, but to be fair, you probably already have enough purple in the closet. I think that will change with Beatdapp, the first investment of the Vancouver chapter, and showing the value of Valhalla “showing deals first.” 

But we miss some by showing them early. Clio only received $20,000 back in 2008 and fellow Edmonton company Jobber pulled out of the forum after passing deal screening, claiming they raised the money in the week between screening and presenting. Further, one of our family offices in Calgary has the distinction of going into two deals that no else did - and then get two exits.

Where are They Now?

Our members and staff have gone on to start companies like IrisCX, Parvus, or funds like Sprout VC, Weave VC, and ecosystem events like Startup TNT. Some of them have taken jobs in the ecosystem such as Accelerate Fund, Google, and Neo Financial. The first ever deal manager is now the head of M&A for Deloitte in Edmonton, and Evelyn has just left us after three amazing years in Saskatchewan to follow her passion in Impact and Social investing.

We would love to hear from you now! Send us a quick email that tells us where you are and what your favourite VentureAlberta/VA Angels/Valhalla PC memory or deal has been. Contact Emmet at emcgonagle@valhallaprivatecap.com and let us know if we can repost it, put it on our website or just cherish it internally. 

Enough About Yesterday, Tell Me About Tomorrow

So there is no point telling you all 2022/23 has been rosy, and I admit to wondering whether two decades of Valhalla Private Capital would ever be possible. But we truly love this space and we have been told multiple times how much value we add in the Western Canada ecosystem, not to mention the 29 countries working for the World Bank, IDB or a National government. We need to up the game in fund management and reporting and that definitely has come home to roost in our largest fund OKR Financial. We have some amazing results in the VA Angels Fund I, but it needs to be reported. We are expecting our capital back in VA Asean Fund, and UnoRondo still has three companies that are growing. This needs to be managed and reported. We are looking at two hires that will report on our investments full-time. Within our VIP group, a number of investors had Valhalla act as an LP in Harvest Ventures, where we have seen 40% of our capital returned in one deal in just under two years.

So here is what you’ll see in the third quarter: we’re working out whether we do more frequent deal events but less forums. More socials, but quarterly regional gatherings. 

The event isn’t a thing:

Pre Covid, the second week of the month was sacred, and everyone would be at the Terminal Club, BDO at the Landmark Campus, The Ranchmen's Club or the Glenora to network, meet, talk about the industry and do deals. There are so many events, so many people working from home, and frankly, the Dragons Den format seems to be a struggling one, so we will meet less regularly but more quality. Watch this space…

We keep taking phone call after phone call:

I personally have never had the capacity to keep up with inbound requests from the ecosystem who want to meet you all! I continue to look at ways to be better at managing that traffic, but we continue to meet fascinating founders, companies, international guests and co investors that we will continue to make available to you. And it will be people and opportunities you won't see anywhere else.

We have rights to a private bank:

I’m supposed to call it International Financial Services. Our joint venture with Axiom FS means that our members can have bank accounts in other countries, easier and more cost effective wire services, and trust accounts to do “one off” transactions with. Details to follow…

Access to Valley VCs who want us to be an LP:

In the fall we will show you funds you will be able to invest in that you won't see anywhere else. Instead of just our VIP group, we will make this available to everybody. Currently we are making a determination on the Top five opportunities. It’s a difficult task.

Proprietary Deal Flow remains the secret sauce:

We have four associations that want us to create investor readiness/Basecamp offerings for them. That is how you saw Beatdapp, Dyne, Wyvern, Callia Flowers before any other investor. We will keep doing this.

Shifting our Human Resources:

We won't have chapter presidents anymore because, well, see point one. We will provide our members the back office as if they are running a corporate fund office. Less BD (we don’t need more), more quality assurance. This is called learning tough lessons

We throw great parties:

Yep, we think this is important... and quite frankly I enjoy them.

Knowledge leaders and Base Camp:

I was thinking about the tone of this letter.. professional or informal. You can tell which one I chose, but Valhalla Private Capital has done well because we have deep domain knowledge on the cradle through the exit. Important guest speakers, access to research, courses on how to be better angels, and less event advertising on socials/more knowledge is part of the shift

Network Expansion where Canada is the Destination:

We visited 29 companies, got rave reviews, engaged new investors; all while running an Angel group, Funds/SPVs/ and an M&A shop, conducting Basecamps and acting as a GP in multiple Funds. We tried to boil the ocean. Now, we see the benefit of everyone coming to our region where some of the most interesting cities and destinations in the world (according to The Economist anyway) are our backyard. Valhalla membership will be global and we are planning to get to 500 members across our network.

Important International Connections come to Canada:

We’ll bring the world and our network to you. We have some amazing members (especially in Vancouver) who just make our network even more amazing.

Lesson learned from Founders - The Lead up is fantastic, the follow up sucks:

Since 2003, through the Josh Lerner Harvard study we participated in during 2011, all the way to last month we heard “ We love your  process and support to get to the forum, the follow up from members and staff is horrible.” We believe that less focus on events, eliminating pay to pitch and curating opportunities for our companies is a better way to go.

We would love your feedback on this new direction, and see if there’s anything else we should explore. We hope as a member you’re excited, and as an alumni you might want to come back. COVID’s not a thing right now, come hang out with us.

Finally, I’m going to do this monthly. If you're interested in getting this letter please click on the link and we’ll add you as the new Valhalla takes off. We’d love to see you back and part of this.

Thanks for being a friend along the road. It's been my honour to have been part of the journey for twenty years.

rst