Boris Wertz is the real deal. His original company Just Books (eventually Abebooks) sold to Amazon. That was back in 2008 and since then he has tacked on six more exits in the successful transition to angel investor. I had a chance to sit down with him at his Yaletown office and talk a little bit about what he looks for in investments, what it is like on the other side of the desk and his perception of the Vancouver start-up community.
1. You achieved a good deal of success as an entrepreneur. What made you want to make that transition to Angel Investment?
A few things really. By the time AbeBooks was acquired, I had already made a few angel investments so I had a little experience. Secondly, I was at that stage of my career where I thought I had value to add when it came to scaling start-ups. I had my doubts when I started however. I didn’t really know if I was going to be any good at it. I gave myself a two year time frame to try it and was fortunate enough to have some success, improve at it and make a full time career out of it.
2. Team selection seems to be a huge part of what you do. Can you tell me a little about the criteria?
The biggest thing is finding someone that is truly passionate about what they are trying to solve. It has to be seen as a long term commitment and as something to commit five to 10 years to, regardless of capital. The second thing that is really important is a very clear product vision. A deep understanding of where they are today and the direction and vision for the future is vital in scaling. Just because someone gets traction, does not mean they can carry it through to a larger platform. Finally, thoughtfulness is very important and it manifests through pride in the attention to detail.
3. How do you compare the balance between approaching you with traction or measurables versus the passion of the founding team?
One of the first lessons you learn as you transition to an investor is to value the team over traction. The goal of a VC is fairly long term and ambitious so a team becomes much more important in that process than traction. However, when people approach me and I look at my favorite teams they generally have both. If you are going to raise capital, you are going to get a much better valuation if you have proof on concept.
4. If I could over-simplify, there are three areas of an entrepreneurial community: creativity and idea generation, the applications of those ideas and the capital to support them. Of those three areas, where do you see Vancouver needing to develop?
We have a tremendous amount of technical and design talent with a pretty solid ecosystem. What I would like to see are more great entrepreneurs; visionary people with ambitious scaling agendas. Another thing I would like to see is more consistent Angel activity. We don’t have a really strong network of early stage angels with high levels of expertise. The third thing is once companies scale, we don’t have an abundance of really senior marketing and sales guys to take those teams of 50 to 100 and build them to a thousand. Usually, at later stages you have resources from major players like Microsoft or Google. Hootsuite is starting to bring in some of these guys but we aren’t there yet.
5. Version One is a relatively new VC company with $19 million in seed funding ($4 million over the ask). Was having to go back to that role of raising capital a reconnecting experience with the entrepreneurial process?
Yeah, it was good to go through that process. I see Version One as a sort of second start-up, I had bootstrapped initial investments, had traction and raised money, similar to that of a normal start up. It was healthy to be in that position again.
6. Tell me something about Version One that isn’t on your website or that people may not understand about Version One
Version One’s profile is more diverse than I think people understand. Our portfolio is around 50 per cent US and 50 per cent across Canada, with a good portion of Canadian investments outside the Pacific Northwest. That portfolio is also a 50 per cent split between consumer and enterprise tech, which is more of a focus on the enterprise sector than in past. Finally, I would say about one-third of our profile is Series A and about two-thirds in Seed Capital.
If you want to connect with Version One Ventures, make sure to check out the website with all the latest, including recent investments, blogs and updates. Stay connected by following Boris @bwertz and Version One @VersionOneVC to stay up to date on local VC happenings.
Written and researched by Daniel Eberhard, business contributer at Vancity Buzz. Follow Daniel on Twitter @danno_go. Check out the full version of this interview on Daniel’s personal website Urban Sherpa.