HIGHLINE investors Rho Canada Ventures (RCV) have deep connectivity across North America and a strong investment track record; RCV was also a previous investor in both Extreme Startups and GrowLab, so they have a solid understanding of our portfolio companies, traction, and vision.
Founded in 2006, Rho Canada Ventures is run by a team that has over 80 years’ combined experience, and focuses primarily on Series A deals. The firm currently invests out of the $100 million Rho Canada Ventures II fund (raised in 2012), and focuses on early stage Canadian companies in the fields of new media, mobile and wireless infrastructure, apps, semiconductors and materials, software, hardware, and energy technology. RCV raised their initial $100 million fund in 2006, which was used to invest in startups like Beyond The Rack, Chango, Fixmo, NetShelter and Accedian Networks.
We recently connected with Rho Canada Ventures’ General Partner, Roger Chabra, and Partner, Jeffrey Grammer to chat HIGHLINE, investments they’re excited about in 2015, and advice for founders.
Q&A With Roger Chabra & Jeffrey Grammer
What excites you most about HIGHLINE?
HIGHLINE consistently provides great opportunities for us at Rho to get exposed to entrepreneurs at the nascent stages of a company’s lifecycle. We value being able to build relationships with founders and start the conversation about whether we are a fit for working together as early as possible. Along with being an investor in the program itself, Rho has also invested in HIGHLINE alumni, including ShopLocket (acquired by PCH International).
We continue to actively look at and work with other companies from the program and we find that companies that are part of HIGHLINE are very well prepared. They are well groomed and milestone-driven, which makes follow-up conversations on the path to potentially working together much easier for everyone.
What impact do you foresee HIGHLINE having on the Canadian and global ecosystem?
Accelerators like HIGHLINE are fantastic platforms for encouraging founders to evolve their products into successful, scalable companies. If we don’t have smart entrepreneurs with big ideas they can develop upon, the entire ecosystem falls apart. All of the players in the ecosystem — whether they are VCs like us, or lawyers, bankers, recruiters, audit firms, SR&ED consultants, or advisors — wouldn’t exist without founders and their ideas. We try hard to never lose sight of that fact, so the potential impact HIGHLINE can have on our community is massive.
HIGHLINE provides a wealth of resources for founders to develop chemistry with each other and to develop product/market fit – both of which are key foundations for ultimately building a large, growing and profitable business… and these thriving businesses are what make the Canadian economy and the global economy work!
What are some of Rho’s current investments that have you excited, or investments you’re looking forward to exploring in 2015?
In 2014, Rho was very active, having completed 15 financings and 5 M&A transactions. We expect to be as busy, and hopefully, even busier, in 2015.
We work hard to maintain a truly diverse portfolio at Rho, one that covers a broad spectrum of opportunities in both technology and media. We are sticking to some of our current themes, but also evolving and expanding to include a number of others.
Our team intends to continue looking for opportunities in spaces like digital health (recent investments by our firm include Figure 1), big data (e.g. Resson Aerospace), cybersecurity (e.g. Shadow Networks), e-commerce marketplaces (e.g. Keaton Row) and omnichannel platforms that span the mobile, online and physical worlds (e.g. AisleLabs). We have always maintained a strong interest in B2B enterprise software and services (e.g. Plotly, Auvik Systems). In that area today, generally we are particularly interested in “mobile first” companies that are easily and instantly adoptable by end users/consumers.
Newer themes for us also include Industrial Internet (e.g. SmartSkin Technologies) and the Internet of Things (IOT), particularly infrastructure-related and enabling technologies in that field.
What advice do you find yourself consistently giving founders?
Entrepreneurs are pretty sophisticated theses days, and that is a really great thing. They know a lot about building companies and about raising venture, and everything that goes along with it. In general, we find that founders are super prepared and knowledgeable when we meet them.
One of the key areas we have discussions about is around differentiation. This is particularly important at the earliest stages of a company when access to capital can be very difficult. For VCs to get excited about an idea, there has to be sufficient differentiation relative to a product’s competitors. In other words, your product must have features and measurable ROI that customers cannot get from your competitor’s product (or from building their own solution).
As you think about defining your product, be sure it is different, and different in a big enough way to matter. If your product is too derivative or “me too” you will find it very hard to raise money and get customers to adopt. Once founders have a differentiated product and are building up traction, we often spend a lot of time thinking through and discussing the milestones needed to raise additional rounds or get the attention of potential acquirers or larger business partners. On this front, my advice is to talk often and early to a lot of folks on the VC side and with larger companies about what specifically it will take to get their attention.
One other area we spend a lot of time on with founders is pitch preparation, especially when trying to attract other VCs. We advise that founders always do their homework on the firm and individual you are meeting beforehand. And, tailor your pitch based on this information. You wouldn’t walk into a customer meeting without having done your homework and tailoring your pitch to that individual customer.
Smart investors look at pitch meetings as a proxy for how the founders will act in front of customers, partners and when recruiting potential employees. Information is easily available these days, and information is power. Always try to use it to your advantage.
About Roger Chabra, General Partner at Rho Canada Ventures
Roger Chabra has over 15 years’ experience in the startup and VC space, and has been with Rho Canada Ventures for over five years. As an investor with RCV, Roger has made investments in successful startups like Chango, Frank & Oak, AisleLabs, Eightfold Logic, Figure 1, and ShopLocket (acquired by PCH International). He invests in high potential companies in sectors he understands and has experience in. “My personal style is to help entrepreneurs where I can be valuable and stay out of areas or situations where I cannot,” he explains.
As a former startup CEO (at Mobilessence) with additional experience in tech-focused roles at Rogers Wireless and Sapphire Technologies (Randstad), Roger has a strong understanding of both the business and technical aspects of companies ranging from startups to large corporations.
Based in Montreal, Roger believes Canadian entrepreneurs are among the most talented in the world and is passionate about helping Canadian tech companies grow to become global leaders. Roger holds an MBA from the Richard Ivey School of Business at the University of Western Ontario and a BA in Psychology from the University of Western Ontario.
About Jeffrey Grammer, Partner at Rho Canada Ventures
Jeff Grammer is a partner of Rho Canada Ventures, and based in Boston. With over 30 years of operational and venture experience, Jeff seeks entrepreneurs who see market opportunities and possess the business acumen to nurture young companies to become industry leaders. He joined Rho Canada in 2006 and focuses primarily on investments in new media, information technology (hardware and software) and communication companies – mostly at the seed and early stages of development.
Prior to Rho Canada Ventures, Jeff worked operationally at Intel, Chips and Technologies, N*Able Technologies (he was founder and CEO), and Ember Corporation (where he was CEO and President). His VC experience also includes Sigma Partners where he was Entrepreneur-in-Residence, and Techfarm Ventures, a tech incubator he co-founded in 1994 and later ran as Managing Director while overseeing East Coast investments.
Jeff’s interests extend to working with young, first-time entrepreneurs to help them build world-class management teams. He also volunteers much of his free time to coaching his children in youth sports. Jeff has both a B.A. and M.A. in international economics from Boston University.