CIBC Innovation Banking Podcast

Morad Elhafed and the rest of the team at Battery Ventures in Boston believe that it's time to get back to fundamentals and build durable and scalable businesses. He is joined by Andrew Phillips, managing director in Boston of CIBC Innovation Banking. Morad and Andrew share their insights into the current investment landscape, how investors identify high-quality companies, and why Boston has become a hub of talent and investment.

Every dollar needs justification

In today’s investment landscape, investors and founders need to justify every dollar. Investors are looking for scalable and durable investments, and founders need to be able to prove that they are using funding wisely.

Innovation comes from everywhere

Traditionally, most tech innovation was coming out of Silicon Valley, but today, it's coming from around the world.

Looking for leaders in the market

Morad says he and his team search for leaders in their markets, whether they are small or niche. Leaders often have strong leadership and a clear path to profitability.

CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking.

In this episode, Krishna Srinivasan, the founding partner at LiveOak Venture Partners, and Jonathan Schupack, executive director and market lead for CIBC Innovation Banking in Texas, share their insights and experiences about the challenges and triumphs faced by startup entrepreneurs in the lone star state. Join us as we uncover the secrets of successful entrepreneurship. Drawing parallels between climbing mighty mountains and building ground breaking businesses, discover the resilience, innovation and collaborative spirit that define the Texan startup scene.

The power of cross-pollination

Krishna sees parallels between mountain climbing and entrepreneurship. Taking that first step, whether on a mountain or in a business, is crucial. The challenges faced by startup entrepreneurs to climb a virtual mountain require us to break down the journey into smaller, manageable steps, celebrating every little victory and constantly striving to improve. Reflecting on what works and what doesn't is key to not giving up before the peak. That's reflected in the startup community in Texas. It's a diverse economy and there is a supportive ecosystem. There's a combination of deep industry knowledge and technology talent that makes Texas a thriving hub for startups and innovation.

Sustainability is key

Krishna stresses the importance of building sustainable businesses, pointing out how excessive capital can mask underlying issues. He advises entrepreneurs to focus on product market fit before expanding into sales and marketing efforts, advocating for a sequential approach, the need for flexibility in adapting to changing market conditions and being prepared for shifting goalposts and fundraising efforts is critical for success

There is a need for native later-stage capital

Jonathan says that while there is a bit of a slowdown in VC funding, the Texas innovation economy remains resilient, with a diverse ecosystem and opportunities for growth. However, he notes a gap in native later stage capital, suggesting that while the state attracts attention, there's room for increased investment from within Texas.

CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking.

In a conversation with host Michael Hainsworth, Andrew Waitman, CEO of Assent, a data management platform that informs and guides ESG strategy, delves into the evolving landscape of ESG (Environmental, Social, and Governance), and the importance of responsible supply chain management. He underscores the growing scrutiny from stakeholders, investors, and the public, who now prioritize ESG and sustainability in their decision-making processes. Andrew warns that organizations failing to adapt will encounter repercussions both in terms of their reputation and financial standing.

Best practice is no incidents

When questioned about the significance of investing in ESG, Andrew draws a parallel with cybersecurity. In the realm of cybersecurity, organizations aim to prevent security breaches through investment in programs and systems. Similarly, in the context of ESG, proactive investment is imperative for uncovering and addressing issues early, and averting potential financial and reputational consequences down the road.

ESG reporting will be the new financial reporting

Andrew highlights the century-long evolution of strictly regulated financial reporting and foresees a similar trajectory for ESG reporting. In the near future, Andrew believes companies are likely to face similar mandates to disclose their sustainability practices.

Founders are responsible for setting their values

Andrew asserts that it falls upon founders to integrate ESG and sustainability into their organizations and disclose these values to stakeholders, employees, and the broader public. He underscores that this integration has become vital for attracting investment and fostering organizational growth.

CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking.

Bow River Capital is an employee-owned diversified investment platform that specializes in the lower middle market. John Raeder, the Vice Chairman and Head of Software Investments, launched the Maiden Fund in 2018, a Software Growth equity fund at Bow River, which was oversubscribed by $160 million dollars. John focuses on what he sees as a capital gap in the lower middle market, helping SaaS companies grow from $5 to $50 million by strategically investing to accelerate their growth. Clearly, his strategy is working, as five of Bow River’s seven SaaS companies are growing subscription revenues at 100%, and Bow River is one of the top ten funds in the US.

You can't fix bad industries

John stresses that while you can fix bad companies, you can't fix bad industries. This perspective drives the efforts of John and the Bow River Capital team in rigorously evaluating and scrutinizing industries before investment. He and his team are attracted to companies in human capital management, fintech and construction tech because these technologies help solve operational efficiencies and improve cost structure monitoring. By exercising caution during periods of prosperity, investors can minimize the effects of inevitable downturns.

Founders should lean on the expertise of their investors

John says that founders need to trust and rely on the expertise of their investors. The Bow River team has 80 years of operational experience and puts each company they plan to invest in through a rigorous diligence process. Once they’ve decided to invest, Bow River Capital focuses on building strong relationships with its founders. This approach ensures that, in times of adversity, established relationships serve as valuable resources, offering guidance and specialized knowledge.

You can’t brand your way to growth

John believes that branding alone cannot grow a company from $5 to $50 million. When investing, John and his team don’t invest in TV commercials or print ads. Instead, they allocate roughly 40% of the capital to sales and marketing acceleration and roughly the same to innovation and product-led growth.

CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking.

According to Marcos Torres, investing is more serious than getting married. The CFO of Huntress, a managed security platform developed by former NSA employees, says that investing just isn't about money. He looks for partners who he can work with long-term, because he knows it can be far more difficult to get someone out of a company than of a marriage. Join him and host Micheal Hainsworth as they delve into what Marcos has learned on his journey from private equity owned business operator turned CFO, raising equity before you need it, and the nonlinear growth of organizations.

You need more than just a plan B

Marcos stresses the significance of having not only plan A and B, but also plan D. Too many entrepreneurs seek cash only when they are in trouble, but Marcos advocates for "digging the well before you're thirsty." By seeking partners, building relationships, and raising equity in advance, you position yourself to find the right investors and partners for your business.

Find the intersection of pain points

Marcos knows that every customer's pain points will be unique to their business. Companies may belong to the same category, but that doesn't mean the issues they need to address are identical. That’s why he encourages entrepreneurs to find the intersection of the pain points across the category they are targeting. Huntress focuses on small to medium businesses that live under the ‘cyber security poverty line,’ and by finding commonalities in their security pain points, has built a product that can scale and build a robust customer base.

People are the most expensive part of software

When tackling a problem, Marcos and his team prioritize technology. They first identify the problem and how technology can solve it, then consider the people involved. People are the costliest aspect of technology, so optimizing the process before identifying the required team members helps create a scalable business.

CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking.

Malcolm Locke, CFO of UK-based B2B software service company Egress, sits down to discuss Brexit, expanding to North America and why the UK is still attracting investments. He’s joined by CIBC Innovation Banking’s Managing Director for UK & Europe, Sean Duffy, who adds his valuable expertise to the conversation. In a post Brexit and high-inflation environment, how can UK based firms grow and expand? Listen to this episode to find out.

Access to talent is critical

Malcolm says that Brexit has impacted software companies' access to talent. The European job market has traditionally been critical for talent acquisition, so UK based companies are re-evaluating their strategies. And while they can’t easily recruit from Europe, they also can’t easily send their trained employees to these markets either. That’s why many UK based companies are turning their attention across the pond to the North American market.

It's about efficiency, not growth

The era of ‘free money’ is over, and so is the mentality of growth at all costs. Malcolm and Sean say that investors are looking for efficiency. They will invest in companies that are using their capital wisely and making their cash impactful.

There is still an active funding market

Despite the current market conditions, especially those in the UK, there is still funding to be had. As Sean says, money can’t just sit around. Companies need to have high parameters and show investors they aren’t cash burners.

CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking.

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Maria Pacella has over two decades of experience investing in emerging growth technologies, and thinks that the best venture capitalists have a range of experiences gained through working in different roles. As an investor, Maria looks for three things: people, product and pent-up demand. She would prefer to invest in a strong team and founder with a smaller market than one with a large market and weak team, and brings this people-first approach to everything she does. In this episode, join host Michael Hainsworth as he and Maria dive into the Canadian investment landscape, what the current economic climate means for venture capital, and why now is the best time to start a business.

It's all about the people.

Maria's journey to venture capital was anything but straightforward, but she embraced the learning opportunities along the way. She emphasizes that your career is shaped more by what you gain from the journey, rather than formal education alone. Additionally, she advocates for corporate cultures that prioritize diversity of thought in decision-making, believing that such cultures flourish.

People, product, and pent-up demand.

A mentor once shared valuable advice with Pacella - a good investment comprises three essential elements: people, product, and pent-up demand. Taking this guidance to heart, she seeks out products backed by exceptional teams with smart capital allocation strategies. She also looks for products that offer tangible value propositions and address pressing problems. Especially in the current challenging climate, entrepreneurs and products that meet these criteria are more likely to attract investment and achieve success.

Now is the best time to start a business.

In today's economic climate, the era of "free money" has come to an end. Entrepreneurs now face greater challenges in securing capital, while investors have become more discerning with their investments. Pacella believes that this situation calls for businesses to be capital efficient and deeply focused on their mission and value proposition. Companies that can thrive amidst these conditions are well-positioned for future growth and success.

CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking.

Angela Tran didn’t set out to be a venture capitalist; she wanted to be an engineer. However, she's leveraged the skills she learned as an engineer to help build Version One Ventures with partner Boris Wertz, a venture capital firm that has invested in some of today's biggest start-ups. Angela uses her background to approach problems from a unique perspective to find and invest in companies in their very earliest stages. She looks for founders who are driven by problems they themselves have experienced- and who will stop at nothing to solve them.

Open to Opportunities

Angela's journey toward her current role involved embracing every opportunity that came her way. She never turned down meetings, believing that each encounter could lead to valuable connections. Angela emphasizes the significance of the people she has met along the way and the pivotal role they have had in shaping her career.

Know Your Mission

Angela and Boris share a strong inclination toward mission-driven founders who strive to address immediate problems. d She observes that many founders tend to focus on macro trends and problems that lack the imperative for change. In the absence of reliable metrics during early-stage investments, Angela and Boris instead concentrate on assessing the potential impact a company can have on the world. They focus on “who” and “why now” principles.

Think outside the box

When she first met Boris, Angela created a dataset to try to uncover what startups would be successful. While it didn’t work- Boris appreciated her out-of-the-box thinking.. When approached by entrepreneurs, Angela is drawn to individuals who exhibit that same determined drive to solve problems in innovative and captivating ways.

CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at

cibc.com/innovationbanking

In the business world, it’s never been more important for companies to build a brand that’s trustworthy, credible and authentic. Considering realness is the basis for her business model, StoryTap co-founder Bernadette Butler lives and breathes by this maxim. StoryTap turns consumers into evangelists—not by using fancy, high-quality video content, but through videos that consumers submit themselves. Offered now in nine countries, the patented video platform is revolutionizing the online customer journey, bridging the gap between the in-person experience and the online experience. In this episode, Bernadette explains why she believes the secret to StoryTap’s success is applying authenticity to the business model every step of the way.

Harnessing authenticity

One of the major truisms that StoryTap is tapping into (no pun intended) is the fact that consumers today are craving authenticity above all else. Any company can manufacture a highly edited video that conveys a picture-perfect brand identity, but consumers want to truly understand how a product can add value to their life. As Bernadette noted, people want to see real people, telling real stories, and StoryTap’s success is living proof of this.

Learn to love failure

As someone who has been through the experience of launching her own startup, Bernadette is skeptical of any founder who says they found success right out of the gate. A true over-achiever, she initially railed against the notion of failure, but as she gained experience, it became clear that failure was simply an unavoidable part of the process. Now, Bernadette says she loves failing because it serves as the key to unlocking the next level of business growth.

Find the right co-pilot

Since failure is an inevitable aspect of almost any business venture, it’s important to have the right people in your corner. When it comes to weathering the storms of startup life, Bernadette is grateful to have her co-founder Sean Braacx by her side. With an entirely different skill set from Bernadette, Sean brings a new perspective to the table, which can accelerate the brainstorming process.

CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at 

cibc.com/innovationbanking.

Since it spun out from the wildly popular online media company TechCrunch in 2015, Crunchbase has been blazing its own trail. The company recently raised $50 million in a Series D round, and it comes at a difficult time for raising funds—not just for B2B software as a service, but for the industry as a whole. Nobody knows that better than Crunchbase’s CEO, Jager McConnell. In this episode, Michael and Jager explore how he managed to raise the funds, how he managed the uncertainty, and how his experience at Salesforce helped him drive Crunchbase to the level of success it's seen so far. Michael and Jager discuss the company’s latest funding round, the importance of giving back to the community, and some of the toughest lessons he’s learned while building an enterprise product.

Set realistic business goals

It’s been a difficult time for growth equity rounds. However, according to Jager, the decimation of multiples is a good thing for the ecosystem. When valuations are hyper inflated, the gap between a company’s current revenue and where it’s valued forces them to pursue aggressive growth at all costs. That’s why Jager believes it’s better for the entire ecosystem to set realistic valuations and achievable goals, rather than chasing unsustainable levels of growth.

Focus on efficiency and measured growth

Jager compares the times we find ourselves in now to the dot-com crash of the early 2000s. Looking back, it was the companies that focused on rebuilding with efficiency and measured growth that came out on top, and he believes the same will be true of today. Ultimately, the great reset will enable us all to build back stronger and take advantage of new, more interesting opportunities in the future.

Give back to the community

During his time at Salesforce, Jager learned about the value of giving back to the community. With its Pledge 1% program and regular charitable giving practices, Crunchbase is taking a similar approach. As someone who considers himself a social-driven individual, Jager has made it part of his mission as CEO to lead by example and champion charitable causes, inclusion and diversity.

CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking.