Feb. 28, 2025
Thoughts on the Canadian venture ecosystem - Meryeme Lahmami (Pender Ventures)
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I spoke with Miriam from Pender Ventures about her journey from building a healthcare tech startup to venture capital. We covered the tough lessons learned as an entrepreneur, especially in deep tech, and her transition to investing. Miriam shared her framework for evaluating founders and companies, highlighting the team's importance. We also analyzed the Canadian healthcare VC landscape, discussed its differences from the US, and explored future opportunities, particularly in AI.
- 0:00) Intro: Welcomed Miriam and asked about her background in consulting and healthcare tech R&D.
- (1:44) Startup Experience: Miriam shared building a wearable tech company for remote patient monitoring and the challenges of deep tech and market timing.
- (3:41) Key Entrepreneurial Lesson: She stressed that building the right team was the hardest part.
- (5:00) Startup Idea & Roles: We discussed how her company idea originated from identifying sensor limitations and the roles she and her co-founder played.
- (9:22) Shift to VC: Miriam talked about exploring buying a business before a chance led her into venture capital.
- (12:55) Journey to Pender Ventures: She covered her path through different funds to her current role investing in B2B software and healthcare IT.
- (14:27) Diligence Differences: Miriam contrasted the process of evaluating small businesses vs. startups, noting the latter are more organized.
- (17:13) Different Goals: We discussed how the expected returns differ greatly between buying a small business and VC investing.
- (18:35) Founder vs. Product: I asked Miriam whether the team or the product is more critical for investment success.
- (19:12) Team is Paramount: Miriam strongly believes the founding team is the most important factor.
- (21:29) External Factors: We discussed the potential impact of US tariffs and a "buy American" sentiment on Canadian startups.
- (27:11) Innate or Learned?: I asked Miriam if she thinks entrepreneurship is something you're born with or can learn.
- (30:43) Red Flags: Miriam shared some warning signs she looks for in founders, like delegation issues.
- (31:33) Charm vs. Substance: We discussed the role of storytelling in fundraising and the need for it to be backed by facts.
- (36:07) Intuition & Structure: I asked about balancing gut feeling and structured analysis in investment decisions.
- (36:43) Conviction Level: We talked about the reality that 100% certainty is impossible in early-stage VC.
- (43:48) Boosting Canadian VC: Miriam offered ideas on how Canada could increase early-stage healthcare funding and discussed why the gap exists with the US.
- (51:04) Future Opportunities: Miriam shared what kind of healthcare startup she'd build today, highlighting AI.
- (52:23) AI in Mental Health: We touched on the surprising acceptance of AI chatbots for counseling.
- (54:58) Wrap Up: I thanked Miriam and mentioned a potential future chat.
Meryeme Lahmami: https://www.linkedin.com/in/meryeme-lahmami/ Pender Ventures: https://www.penderventures.com/ Rishad Usmani: https://www.linkedin.com/in/rishadusmani/ HealthTech Investors: https://www.healthtechinvestors.com/
Hi, I'm Miriam. Thanks so much for joining me today. If you could give our audience a bit of a background and we can get into it then.
Yeah, thank you for for having me today.
I guess, just before we get started, I just want to sort of lay it out out there just to disclaimer that those are going to be my views and not necessarily Kendra Ventures views.
And this is not advice for investment either. So, I guess a little bit of background about myself.
I actually was born and raised in Morocco, spent a better half of my life there and then moved to Quebec to for school. So I came in in early 2010s for my MBA and then stayed there after moved to Montreal for career options and and then stayed here in Canada since then.
So, definitely kind of my second home. I studied business administration and finance and then as I graduated went to do some consulting and biomaterials, spent some time across a couple r&d firms, and then landed in an r&d company that was working on sort of technical textile and wearables.
That was sort of the big trend, you know, integrating sensors into either watches or clothing or other form of wearables that we wear.
And that's how I really got exposed to sort of the Montreal or generally speak in the Canadian venture capital and entrepreneurship word.
I caught the bug there. So I jumped and tried to build a company in the wearable space but really with an angle towards remote patient monitoring. It wasn't cold then, RPM at that point to a sort of three CPT codes.
There was really no structure around it.
Yeah, so what we were doing is a platform. We had a few sensors. The idea was to really use radio frequency to capture vital signs at a distance without having contact with the skin.
And so applications were obviously autonomous or semi autonomous elderly people at home, maybe patients and so everyone who's kind of bothered by having to charge their devices.
So we had few applications. It was definitely more of a deep tech space because we really had to build sort of the sensor from scratch.
And at that time, you know, not a lot of, I would say not a lot of VC investors generally speaking like, but also so few deep tech investors in particular so we did that for a few years we built, you know, an MVP we had few
partnerships and and an ongoing project with tier one OEMs. We kind of tried the healthcare route where we wanted to do more RPM.
But there was really no revenue model. And so I think my biggest learning there was entrepreneurship. There's a, you know, there's the product there's a problem there's a product market but there's timing as well.
And sometimes if you're too early too late, I think that is a big factor.
So the ability to kind of hang around and wait for the right time or the revenue model is enabled and the market is ready and the consumer is ready is definitely something that sometimes could be overlooked and then vice versa if you're too late into a market, then you may capture a little bit of the market but not necessarily win the market so
Do you have a technical background, Maria? Do you have a technical background?
No, I don't. I don't have a technical background by education. I'm a self taught programmer. I was always very tech curious.
I actually did math and then I was going, obviously, next natural logical step was computer science and I changed my mind and I was like now I want to do business.
And so that's how I kind of switched very, very last minute.
But I still always stayed super tech curious. I taught myself how to design taught myself how to program.
I mean, now it's probably irrelevant if you can do a lot of that with AI. That's cool. But yeah, but I don't have a particularly technical background for my company. I did have a technical founder, obviously.
But I would say that I do understand tech quite well.
So how did you come up with this idea? Or did you come up with the idea with your co-founder? And how did you, you know, what was your role in the startup and what was your co-founders role?
Yeah, so when I was at the R&D lab, I was, I looked at a lot of companies that we were kind of working with and supporting. We were sort of service providers for them.
And there, most of the companies were using optical sensors. So as I was sort of working with these founders, entrepreneurs and CEOs, a lot of the issues were just data accuracy.
Like the Fitbit was essentially a random number generator that's bringing in. Like it was really, there was no data that you could trust.
And then, and then with AI and with the more data you got, then they start kind of denoising the signal and they start getting more better and better.
And so, and so when I was looking at it at that time, a lot of it was, oh, optical sensors is not, you know, not accurate, very prone to noise, very prone to, you know, sort of skin color and skin tone and tattoos and the light conditions outside.
And so I think you could think about it in two ways. There's the software AI ML at that point, probably ML route that you can actually get the more data you get, you can prove on the accuracy, or you can look at it from the more difficult point of view,
which is, oh, hardware, how can we actually work with better sensors and what would that be?
So, I was back and forth looking at these, I think, internally and with myself and came across this, I think it was an event came across my co-founder who was more of a PhD in RF signals and was also kind of exploring the same space that I would say from the technical side of it.
And that's how we came together. We incubated the company in a, in a sort of an accelerator incubator in Montreal and the roles were tech and sort of business, but early days when you're building something in deep tech, I think, you're, you know, as a co-founder, your role is really to,
A, make sure that we are getting, that you are that product market fit. Where does this, you know, what are we solving here, what are we solving it for, what are the different paths to market, which one to prioritize, what are the low hanging foods?
Because for this kind of solutions, you can go, you can go really different routes, consumer health, you can even do regular, like we had a lot of interest, for example, from aviation, they were like, oh, we would love to know when people feel thirsty or when people feel
hungry or if you can collect some of that data, we had, for example, automotive, like if you can do it in the steering wheel, and you can kind of get that data, you know, sort of health data without having to wear anything in the car.
So there was, there were so many applications and it's really hard, it's really hard not to chase all of them at the same time, because everyone was like, yeah, super interesting, would love to work with you guys.
So there's definitely keeping that discipline of like, what is actual opportunity, and what is sort of non recruiting engineering work that you want to do to generate cash flow to fund sort of the bigger grand division so yeah, and then building the team is definitely,
obviously, another very, very sticky critical point in any, for any entrepreneur out there. I made so many mistakes, I think, to me the hardest, if anyone's asked what was the hardest thing to navigate, I think it's like team building finding the right people, having the right people in the right seat is definitely the,
it's definitely the hardest, and people can make or break a company, obviously so.
That was, there was a lot of learning, just gonna, as a first time founder. Yeah, so that was a little bit of the background on the company.
And then after we, I actually was looking to buy business, I was like, oh, maybe startups and tech startups are, are hyped up and you get capital intensive.
From a personal finance perspective, like, were you looking to get a loan from the bank or did you have capital saved, or do you have an exit from your startup.
How are you looking to fund these acquisitions at that point.
Yeah, well, it was deaf. I had a partner who I would say definitely was more advanced in his career, both age and career.
And then we were going to leverage that to actually get a debt and finance it by debt. So that that would have been sort of my portion of it.
So we came together and we started looking for businesses and there is, as you know, we talk a lot about the next generation, there's a lot of businesses that will go bankrupt or to have to disappear because there's nobody else to continue and take over.
Their leadership.
So we spent a lot of time actually talking to all of these entrepreneurs and we're not this is not startups. This is really businesses of all kinds.
We came down to sort of this palette business to actually put transportation for pharmaceuticals and, and it was, it was interesting, but you know, I think to learning there.
The first thing is, there's a whole generation of businesses that need to have folks to take over their leadership. But at the same time, a lot of them are about to disappear.
They're just not sort of current with the times. So there's there were a lot of businesses that you can just not see kind of continue and with everything that with the tech and and all the investments in the last few years.
And the second one is that if you're going to buy a small business, it coming from like tech and due diligence and like being really down into the details and all that it was really hard to wrap your head around about like this one person business, you know,
had all accounts all over the place and you're not sure where the contracts are. And so you had to take a leap. If you really wanted to do that. And most of these companies are not necessarily well organized.
They would say and well run.
So it wasn't, it was maybe a six month process. I really looked at few companies did some diligence on one, and then didn't get there at the end of the.
I actually backed out but the, the person that I was working with, sort of looking through the, I do know that he ended up buying that business.
It was about the same time, but I backed out because I just didn't have the conviction that sort of that would have scaled nicely and and I wasn't sure what kind of tech we can add to it because my vision my personal one was by business add tech to it.
And so I was like, I'm not going to charge it, you know, not necessarily buy and run it as is and maybe generate a couple million the year with your, I don't know, 30% gross margin and pay a couple employees like that was not sort of what I was looking for.
I was talking about all this in a conference came across an old friend of mine and they mentioned they, they had a healthcare fund 25 million they were looking for for folks to kind of help them out with setting up the fund and and so that's how I joined.
You know, I had a little bit of the, I had the entrepreneurship background at least for a few years. I understood healthcare.
So, and yeah, so I was like, Oh, this is interesting. I went into it thinking that was that would be the perfect way to get exposed to so many other companies, and then maybe get back to building to, you know, joining one of them.
But then it's, I, I don't know, did I get comfortable or I'm not sure I just never translated into the next step in my operating, you know, experience and I stayed there for a couple years and moved to BTC capital which is a crown Corp here in Canada and in one of their direct funds.
And then more recently at pender ventures where we invest in B2B software and healthcare IT in North America. Right now, investing out of our second fund, a hundred million dollar fund, mostly do sort of companies that are over that one million one point five million in revenue.
And yeah, so that's a bit of background.
Talk to me about your diligence process when looking at businesses to buy more from a sounds like almost a P perspective.
When you were looking with your partner. And then and how does that diligence process differ from your current diligence process looking at healthcare startups.
Yeah, I'm very different I would say, you know, startups are sort of set up. Most of the time they've already had investors before they have, it's not a one person shop, they have a legal counsel they're much more organized, I would say just from tracking rather like they have teams to do a lot of things buying a small business
like it is quite a different journey. You have to, I think you have to have the understanding of what you're looking for.
You probably have to do a lot of heavy lifting actually putting together that data room the equivalent of a day room in the startup board.
I do remember spending a ton of time at the company's offices actually putting together that information, because they just, it was scattered. I don't think the plan was to sell the business necessarily.
So, there was really no structure to it you just had to, and get comfortable around that worries tech companies are sort of more established businesses and obviously, you know, I'm comparing with, again, a one man shop.
It's a small business it was doing like a million a year, it was paying him good, you know, the good business for him and his very small team but that I am pretty sure that other, you know, other businesses are much more sort of mature in the way they run.
In terms of tech startups, it's quite, it's almost like I can't really compare both of them right startups are are usually sort of, especially today there. There's a ton of accelerators there's ton of incubators there's a lot of mentors a lot of programs like CDL and others.
And to really help you out with the first thing to do a lot of support from government via different, via different organizations so you just have much more maturity in how to set up the business at the beginning.
You can get a lot of advice from all kind of peers. So it makes it really easier for us to kind of come in and companies are usually running the process they have structured data rooms.
The startups I would say you have to, and it's also quite different in terms of the outcome you're expecting from that transaction, right.
So if I compare with the small business, the expectation was to, again, run a small business pay yourself salary that's comfortable, and then potentially grow it compounding very small, you know, I don't know what the number would be but stop 20% growth year over year and get it better and optimize it.
So you have to believe this is going to be sort of a bigger, you know, a big return for the fund you have to believe that the market opportunities huge that this that this team can execute and that this product can really should have when or be one of the winners in the market.
These elements are quite different because you're not expecting the same outcome. You're not expecting that 10 X or you don't want to see that you're not looking for that when you're looking at small businesses versus a startup where you're like well, I do, I do have investors and, and that I, you know, as a as a come as a venture fund, your
goal is to raise money investing companies return the money and that's really the cycle of it and you have to think about it from that perspective.
Would you invest in bad founder and I get bad is very subjective here with an amazing product building and a growing or in the right market.
It's very interesting question. Yeah. It's either that amazing founder in the market you think is destined to fail.
And their current product is, is, you know, quote unquote garbage.
Yeah.
This is an interesting question I think.
Personally, I think team in team is actually number one thing. And I learned that as an operator but also as an investor in across the last seven or eight years.
I actually did have that conviction many times before where you're like looking amazing, you know, super strong products like the opportunity is sort of really big and you're like super excited about that and then you look at the team and you're like I'm not sure this is the right team that will
bring that will execute on this opportunity.
And I think that's pretty well. And so many times you're like, I'll do the deal I'm pretty sure we can coach them and work with the CEO and help them out and.
And so you kind of you lead yourself to believe that you can really change the leadership or you can change and help help coaching them and supporting them in their journey to learn.
And that happens. And pretty much from my super humble experience is that it never works out. Like it does just never work out you can't really.
You're not, you're not running as an investor you're not running the business, you're not really operating it so you can coach and help and support but really the team is the one that's going to make it happen.
So, so it's, it's to me it's actually very obvious today from some mistakes that I've made in in the past.
The team is actually number one. And, and, and maybe sometimes I may be wrong and you can sort of argue that there is the case where it worked but, but I definitely think that you have to, if there is a great CEO strong team strong founders strong management team,
they'll find a way they'll find a way that they'll pivot they'll they'll they'll navigate through all of that to find an opportunity and execute on it and win versus you can have a super strong product if you don't have the right people in the right seats.
I think it's bound to.
It would it would eventually fail so.
So, the last past five weeks, a lot has changed. I'm talking about our, quote unquote, cousins, South of the border, specifically in terms of tariffs.
So the cost of doing business with the states will will go up as a result. It sounds like across the board, even for digital services. How do you predict these tears will impact Canadian venture venture and healthcare startups.
Do you know, do you predict a rise in as a result, maybe kind of born out of patriotism or a little bit of a pride of your own country or do you see, you know, most change in where funds and starts or domiciled and move down south as a market kind of remains in the US,
especially the M&A market and the IPO market to an extent.
Yeah, I think there are a few parts to this question. It's definitely current one that we're following every day because we I would say we're definitely kept on our toes and companies are also kind of really closely monitoring this.
Maybe to unpack it, definitely on the economic side, if you're right now, at least if you're selling a device or a physical product.
If as an entrepreneur, if the entrepreneurs or the teams are not having already done the math on how that would impact their economics and they should, that's probably something that, you know, if it's delayed not delayed, ended up being completely wiped out doesn't matter like you just have to really
understand how that will affect your, your economics and your budgets and sort of.
So, on that's the immediate, I would say impact.
The other one which is sort of adjacent is maybe the buy US by American sort of sentiment that I think companies may not necessarily be factoring into their thinking.
You know, if no one asks, you don't have to say you're American like it or a Canadian or whatever so.
But it is something that, you know, especially if you're selling to government municipalities and maybe not for profit, maybe not.
Yeah, not for profits for sure because I think their funding is being cut being cut but if you're selling it to government or organizations, then I think that's something that entrepreneurs should definitely consider.
And whether that would increase you mean the domestic sort of demand. I think that's what I think that's what people are talking about. I think, you know, I've been to a couple conferences in the last months and I was surprised at one of them was actually in healthcare
and I was surprised to hear that, you know, to me, every single company that was selling the device I was like hey what are you doing to mitigate the risk like what's going on how are you thinking about it, it's good to see what entrepreneurs were were sort of doing.
And a lot of the answers I got I was actually surprised to hear which were in the lines of, you know, this is, we don't really see it as a as a threat. I think it's great because then, you know, our hospitals will actually could potentially that this could be sort of a turning point in our
healthcare system procuring our devices. I think you'd be awesome. And definitely it would be about time. And, you know, I think there are a lot of great initiatives there to really help sort of change the procurement for a lot of our hospitals
here in Canada and if this is sort of that, you know, incentive or that would help them get over it then then that would be great for Canadians, because at the end of the day we're getting that care at the entrepreneurs and and so on so forth.
However, it's still a very it's still a small market so it's part of your strategy it's part of your market opportunity your target market. It's not the whole target market so I think as an entrepreneur you still have to think about what comes next.
These things take time. I don't think the procurement will change in a matter of weeks. And so even if it actually ends up being materialized, it ends up materializing it will take time before we get there.
So, I think it's a little bit naive to think that in my opinion I think as an entrepreneur, you got to think about all the risks and where they can come from and how to mitigate them.
So, I, you know, there's some positive there, but I think we still have to be sort of cautiously optimistic about what's going on in the US and how that would affect the business and maybe that is not necessarily looking into the US maybe it's other opportunities UK Australia some sort of similar
countries with similar health care systems or that could be interesting to probe and look into while sort of the US stabilizes that could be another opportunity, but sort of putting all your eggs in one basket is probably not the best strategy as we know if you're an entrepreneur.
Do you think entrepreneurship is innate, or can it be learned and personally for you. Do you think you were born an entrepreneur or did you learn it as as you grew.
Yeah.
I think it's a bit of both. It's a good question if it's innate or you learn it I think you definitely I think the appetite for risk is definitely something that probably not necessarily something you learn.
I think you have some of it, but you can learn as well. I think that there has to be sort of a stumps sort of curiosity desire willingness to take the risk and kind of ability to figure things out.
And like kind of going from something and trying to build trying to go from nothing and go from nothing trying to build something. But, but I do think there's a lot of other aspects of entrepreneurship that you just have to learn.
I think that's enough in it of itself to be a good entrepreneur. I think there are some ingredients that can make you sort of be more prone to leave in your comfortable job and starting the company or or or completely changing careers or whatever like entrepreneurship
is not always just about starting a company can be manifested through different ways but but you also have to really work hard to learn a lot of other aspects that maybe are not necessarily something that that are innate.
My, you know, both my parents when I think when I reflect on this, both my parents are actually were entrepreneurs in their own different ways and my dad just tried when I was growing up he was always on new things working on he had his, he had his job, but he was also on the side,
just doing so many different things I can't even count them. And my mom is also both of them supercuse both of them definitely has that entrepreneurship and I'm even looking at my siblings and, you know, I'd say two out of four kind of went into entrepreneurship so
but so definitely and definitely some experiences when I you know growing up kind of going with my father to all of his different projects that were ongoing you're like, you know, you're curious about them you want to help.
So so many times I actually spends instead of spending the summer on those surfing playing on the beach because I grew up in a coastal city. I spent them working for my father because like I was like curious about what he was building and I wanted to help and support
and so definitely this sparks curiosity I think and there are some some parts of it there are a lot of, I think there are some small things I definitely learned from him.
And from my mom growing up.
Probably the grit the never always keep trying things are not going to work out all the time but that's okay just move on to the next one and try again.
Yeah.
It's it's very good it's probably a good question to reflect on one more but.
Yeah, that's that's sort of my perspective.
Talk to me about some examples when you're talking to founders and what are some red flags you're looking for.
There is a recent book by alias Rubin of venture mindset where he states charm is one of the biggest predictors of founder success.
And inherently I want to refute that because I want to say it's a substance that matters not not if you're charming or not.
But when I think of successful founders, most of them are charming in their own right.
So how do you so what are some things you look for like great or has they always been an entrepreneur or charm. And how do you screen for those things and if you could give us some examples where you know you're like okay this is a big red flag and you know this is a no, because of what's happening right in front of me right now.
Yeah.
It's interesting you're talking about charm because storytelling.
You know, whether you want to consider that part of charm or charm part of storytelling but kind of definitely something, you know people will gravitate around entrepreneurs that are really strong storytellers.
Whether that is for fundraising, or for signing that first client. And so I always try to actually, every time I'm like, I want to take a step back and actually think about, because it's easy to get excited, you know, by a story and by an opportunity and, or if you want to call it the charm and you're like
this is really great. He or she is a strong founder and I really want to invest. I always try to back check it check it with with facts.
I always want to be like, oh, I just want to take time to like I just want to reflect on it like I try to keep myself in check, actually, not necessarily completely buying into that, not not believe in but just always kind of making sure that I'm not totally sort of buying the story and like completely
and letting that lead my investment decisions, if you want to put it that way.
Red flags, I think there could be few. I don't think Charmin or storytelling is a red flag, I think it's a great quality and I think a lot of us should actually get better at it.
You know, we talked a lot about women entrepreneurs women who's, you know, getting more investments I think part of it is maybe the storytelling because women don't tend to be sort of embellishing stories and, and, and, and they're sort of more factual like they will tell things as they are not necessarily as
and so I think that is actually detrimental to women founders and, and even maybe investors in a lot of ways, or just women in the professional world if we want to make it more general.
On, on, on red flag, it's really interesting, I think, I think sort of maybe how much I think that the team building again coming back to it, how much time have you put into that delegate delegating.
You know, you're literally red flags but you're like what is this, what is the capacity of the CEO to actually scale because you cannot scale a business by doing all of it all alone or with your co founder.
You have to be able to hire.
The choice of the hires is always very something that I would look at. So your management team, what do they look like, who are they with their backgrounds, you actually strive to get surrounded by people that are smarter than you that are better than you to elevate you and the company or you want to be the
the CEO, as a CEO, you want to be the smartest person in the room and so you're going for folks that not. So, I think that is actually a red flag if you're not, if you're not able to, you know, and open to hire people that are smarter than you then to me that's
a little bit of yellow flag. Okay, why is it, is it because you actually couldn't find anybody or is because you really always want to be the smartest person in the room so I think that's the main one to me if I have to qualify sort of a red flag or a yellow one.
But there could be other things I think, you know, going through the diligence, it's a collection, it's a collective of thoughts and and and across different aspects of the business so it's really hard to like.
At the end of the day, all of these elements should come together to inform that decision.
Yeah.
I wonder what would be in what qualities would they possess. And usually the people will list their weaknesses because they want someone who, who, you know, completes their weaknesses instead of asking them directly. Let's go deeper into the, into the intuition versus structure framework.
So much do you rely on intuition when making an investment decision, or is it more and this is more common in PE where you have a scoring sheet, and if you know the startup scores over 90 you invest.
Do you, do you have to reach full conviction before you invest I was speaking with parrots from amplitude. And you know he said something very interesting from what I remember he said he only needs 50% conviction.
Because if you have full conviction, you're missing something and it's impossible to have full conviction in an early stage investing.
Do you agree with that statement and how much do you rely on intuition versus structure.
Yeah, you can't.
You can't have 100% full conviction and it really depends what you mean by conviction again, I think it's very relative.
And you can say I have 100% full conviction on investing in this company because I am convict, you know, I'm convinced this is like this is scoring 100% against your own sort of framework.
That's what you need, I think on, like you need full conviction against your own framework like if you're going into business and you're like, I don't know like, I don't like the family like as you mentioned earlier, I'm not sure this is the right video but I'm
still going to do the deal.
I think that's, you probably have to pause there and be like, okay, am I actually convinced maybe there's not.
Now, if you're talking about having 100% conviction this is going to be a winner.
You will never know like nine out of 10 companies fail like we're doing early stage investing so many things can go wrong.
We're talking about tariffs like, like the market can go wrong the product may not work.
The team likes there's so many areas of risk that it's impossible to have a bullet proof.
And you cannot say with certainty that this is actually going to be a winning company and you can, you cannot back it with facts that's for sure.
So there's always you're going in you are in a your risk taken, you know, in your investment decisions are taking a lot of risk and a lot of bets really.
And so you're going into that investment and you're like, well, I, I have the conviction I need, but obviously a lot of things can go wrong and those are all the risks and maybe some others that I'm probably missing.
So that's how I would frame it. So I don't know exactly what the context of that conversation was but I would assume it was alluded to the second sort of case that I talked about intuition is definitely important.
I think it's more than intuition. It's also a little bit of pattern recognition in VC investing. It's super early stage. Again, not a lot. A lot of things are still work in progress.
And the company you're going to invest in today will probably not be anything like the company that will become five years from now.
Like it's, you know, these companies are going to change a lot between the time you invest and the time you exit or so.
But with that being, so that's why I do think pattern recognition, it is a numbers game in a sense where if you look at enough deals and you do, you look at you kind of work with a ton of entrepreneurs, you work on a lot of deals, you start picking on some patterns or
some things. And so I think that is that pattern recognition kind of feeds into your gut feeds into that instinct versus sort of the diligence, especially in early stage.
There are many things that you can't really fully 100% diligence, because this is you are investing in the future, which you can't predict.
So there's, there's definitely combination of both.
Now there are things that you can clear, you know, in, if you're doing precedency, it's probably almost all team and instinct.
In a way, and so that's why repeat entrepreneurs will always have an easier time to fundraise, for example, because we tend to believe that someone who succeeded in the past can actually succeed in the future.
I don't know how much data back that I honestly don't know.
I don't know if you do but in entrepreneurship, I am a big believer that the past does not predict the future.
So a lot of the times you kind of hire someone from for the team, for example, in a C level position, and you're like this person was in the exact same position in a in a company that was operating the same space.
And they did a great, great job. They success, they successfully led a team or whatever hit all the mice, no seed of the mice don't you get you bring them on the team.
It doesn't work. I think there's a huge element of culture.
You know, the time in as I said is different. There are some elements that are not necessarily factors and can can still
that I think that can change the outcome. So I don't think I'm not sure that, you know, I think repeat entrepreneurs will come into it, you know, knowing a little bit more than first time founders, but you can't claim that they would know it all.
So, yeah, so I think if you do it precede and seed a lot of instincts, obviously, you just have to buy into the vision, you probably have to be visionary yourself in terms of like, what is that market going to look like and, and so kind of try to reconcile that with what the
products with the, with the company is building and, and hopefully that's a match. If you're doing sort of more, if you want to name it series a series be used, you have a little bit more data, you have some clients you have some some, it's early stage still, and I think
there, the biggest question is, can it scale. And if it can stay at what pace. And so that's, and I think that's when it becomes a little bit more, you know, about team about ability to hire the right people about ability to take the right decisions, in terms of product to really
sort of time it all out for a successful outcome.
And the ability to scale is something I find first time founders often undermark for and, you know, a good distribution strategy is as could be a defensibility.
The data 10 years ago did not back what you're saying but now it does there's a study from Harvard in 2002 I want to say, which is what everyone quotes, which said repeat founders are 40% more likely to succeed.
And so the studies mostly out of Europe and Germany that have countered that evidence. And now, at least the academic world, kind of from what I understand, says there's no difference in repeat and first time founders.
If you woke up as the prime minister of Canada tomorrow.
How would you increase early stage healthcare VC funding in Canada. As is based on, you know, the report you put out that it's only 5% of VC money in Canada goes to early stage for healthcare, which is 30% in the US and early stage I'm assuming we're defining by, you know, we can pick
up the sub 5 million or sub 10 million. How would you change that framework in Canada and why do you think that discrepancy exists between Canada and US.
Yeah, I guess on the data point itself.
I mean I wouldn't want to wake up as a prime minister but on the data point itself.
I think the 5% that we're alluding to because pitchbook actually look, that's why I think we said young companies.
They define early stage as companies that are less than five years old.
That's quite interesting.
That's not how I would define it.
Yes, that's not how, but that's how pitchbook defines it and I think we alluded to that but that's how they define it which we thought actually I thought quite interesting because that means we are willing.
It's like companies that are five years old or less.
You know they, especially in healthcare takes time and so five years is not a lot of time like if you're starting company in healthcare, you're probably barely getting somewhere.
So, I think it's, it's just I think the risk, the appetite for risk.
We look, we don't look at biotech so biotech is excluded from there. I do think we have a pretty strong ecosystem going on on the biotech side but we have some ecosystem we have some investors we have good track record few exits that were definitely over a billion in the last, actually just the last year I think that three or four.
So there is a little bit of that maturity there on the digital health and sort of the healthcare it space and bit of the sort of med device non surgical ones.
I think that that is actually very, very new ecosystem in Canada.
Like, I'm, I'm just reflecting on the last eight years like we do we're not a lot of companies building in that space. So it's very, very immature.
And so it will take time to build companies that are successful that will kind of help build out that ecosystem and, and that will support. It's really a chicken and egg problem.
Because you need companies building and you need strong ones and you need, you know, founder, sorry founders you need investors, and you need that flywheel.
There are, I think the early stage investing generally speaking is definitely underserved in Canada and I think that is probably a little bit of the culture there, you know, uptight for risk, maybe the profile of the investors in funds that require a certain return and so that really trickles down,
because at the end of the day, everyone is sort of trying to, you know, if there is sort of a, if there is resistance to take risk from like sort of the LP base, then there is resistance to like, take risk from the JP base that so it does trickle down but I think we're,
we've seen it mature in a big way in the last few years. And mind you, in Canada, we do have a lot of our, a lot of grants, we have shreds so every dollar kind of lasts a bit longer, but at the same time companies don't tend to raise as much as their counterparts.
So, and these grants and all that are kind of comes with strength attached and reporting and so, and tweaking things in a certain way so whether that is, whether that that can be actually a revised and refused to be more optimized.
And not, I don't know, all this money that goes into grants, can we actually structure it as more forgivable loans or equity or something in between. And so, you know, if there is, if the company doesn't go anywhere, you would have attributed it as a, as a grant anyways.
But if there's an upside, then you are part of the upside, and you can actually, and that may be will. And I always thought, this is something that I always reflect on and I'm always like why grads versus some other instrument that government can actually be part of the upside,
and then on the downside, it would have been written off in any case because it was all grant money so.
But I don't have the answer to that. I'm not privy to. But it's something that would be curious to hear more about and learn more about on a personal level.
But yeah, I think, I think that sort of COVID definitely, I think it's definitely a tough times tougher times, I think we had COVID we had the highs in 2021 and obviously we're hitting a little bit of the load right now in terms.
And the US is similar, like when you look at the data, it contract the contraction in the US is I think the same or kind of 20% less or something as in Canada.
The difference is their ecosystem is huge so 20% less is obviously notable but not completely.
It's not going to destroy the ecosystem or is our ecosystem is so small so 20% not only notable you're like, this is like have a huge impact on the ecosystem has a huge impact on on on the activity within that one so we'll have to, you know, I do think the hardest
job is to build a company. And we just, you know, I think my question is, you know, and the one that actually like that that I think about the most and I talk a lot about as well is the pipeline of entrepreneurs how many come like the
the opportunity cost today which is high compared to a few years ago, like years ago you can do, you know, kind of it.
You can have a job, you can still build something in between. It wasn't super expensive to, you know, the cost of living was not as expensive as it is today.
A lot of, unfortunately, we don't see as many people taking the route of entrepreneurship for all kind of reasons. And I do worry about the future, if we don't have enough folks building out there and starting new companies.
If you had to build a startup today. What startup would you build and maybe through the lens of what's healthcare startups and what vertical building what product would have the easiest time raising funds.
I think AI is definitely, I don't think we touched so much on that but it's definitely one that is a good, I think that that's a good keyword or to fundraise often like we've seen so many companies raise on the thesis that they're
building something with that. I think the, this whole agentic AI is quite interesting like not having necessarily, I was in Nashville at Vive last week and I was really impressed by all the work that's being done there.
And some of it was quite bold, like, in a sense where you'll have an AI mental health therapist, and it's not going to be human in the loop it's not going to be tech enabled it's going to be the AI and so, and it was quite real like you see these demos you're like wow like this is quite
interesting then you read about all these youth that have AI friends or have AI boyfriends or girlfriends and you're like, wow, like, I thought that was, I thought that was actually mind blowing.
And I don't know if that's a good thing.
No, I'm not saying it's a good thing but I thought it was because I think it was like the study like 18% of youth has like AI friends or or something date some AI like there's been a few studies people prefer AI chatbots for mental health counseling, as opposed to human
counselors, because they find them more empathetic. And they don't they don't perceive them as biases and they don't judge because they're not human so they cannot judge. Whereas they worry humans will judge them if they kind of, you know, say I lied or I cheated or I did this.
I don't know the way. Yeah, yeah, and then I don't doesn't. But I don't know. I'm not. I don't know that's, I think too much technology. It's funny because what's best for our mental health is to move away from technology right and sleep better exercise more spend more time outside with family cook our food
and not, you know, tell our worries to headspace or calm. But yeah, sorry, I interrupted you there. No, no, no, it's actually a good point it's just that it's mind blowing to me that there is this level of acceptability to such technology so
I think, you know, a genetic AI, I think anything that's scribe and all that probably in my opinion has been done and one in a way I think you can still see some opportunities and very specialized scribe stuff but I think I think anything that's sort of all the gen AI the
genetic AI is definitely opening up a whole lot of doors for all kind of things and all type of industries. So, yeah, that's what I would. And today, we were talking about cost of, you know, opportunity of the cost of opportunity went up for entrepreneurs.
And hopefully it's kind of the cost of building a company has is coming down with sort of what we've seen with deep seek and all that and so now, you know, maybe with these two elements in mind you can, you can sort of see, you know, maybe an inflexing in in in folks taking
initiative and going out and building companies, because now they can build them for less cheap for much cheaper and don't necessarily have to wait a lot of money to get to the same milestone.
Yeah, that's well said. Thanks so much for joining us today, Maryam. And we'll have to do a part two soon.
Yeah, thank you Rasha. I just appreciate it.
