Welcome to episode 268 of the Business Development Podcast.

Today we're joined by Lys Burkhandavi, trailblazing investor, changemaker and co founder of Canada's first black led venture capital fund, BKR Capital.

From Burundi to Montreal to the front lines of inclusive innovation, Lise has dedicated her career to breaking barriers, revolution, reshaping finance and empowering diverse founders to solve the world's toughest challenges.

Stick with us, you don't want to miss this episode.

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This is the Business of Development Podcast.

Based in Edmonton, Alberta, Canada and broadcasting to the world.

You'll get expert business development advice, tips and experiences and you'll hear interviews with business owners, CEOs and business development reps. You'll get actionable advice on how to.

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Let's do it.

Welcome to the Business Development Podcast.

And now your expert host, Kelly Kennedy.

Hello.

Welcome to episode 268 of the Business Development Podcast.

And today it is my absolute pleasure to bring you Lyse Burkhandavi.

She is a trailblazing finance specialist and the co founder and managing partner of BKR Capital, Canada's first institutionally backed blackled venture capital fund.

With a background in hedge funds and a drive to fuse financial success with societal impact, Lee has dedicated her career to reshaping the investment landscape.

Her extensive experience includes leading The Jacobs Foundation's EdTech Impact Investment Strategy and mentoring high potential startups and in emerging markets.

From funds of funds and venture capital to an interim CEO role at a tech startup, Lisa's expertise spans the entire investment spectrum making her a powerful advocate for transformative inclusive finance.

A CFA charter holder with a trilingual Bachelor of Business Administration from HEC Montreal and an MBA from the Shanghai Advanced Institute of Finance, Lisa's global perspective is matched only by her commitment to lasting change.

Fluent in French, English and Spanish with conversational Mandarin, she combines her multilingual skills and impact driven vision to foster innovative, diverse and inclusive investments.

Lee stands as a powerful force in finance dedicated to creating wealth that uplifts communities and champion sustainable poverty alleviation.

Lease, it's an honor to have you on the show.

Thank you so much Ken for having me.

It's an honor.

Fun to be here.

It's.

It's incredible.

You've had an incredible career And I can't wait to get into it.

But first off, you are our very first venture capitalist, and it is awesome.

I'm so excited for this because we have such a large listenership of founders, startups, tech startups, entrepreneurs, and this side of things is really challenging to navigate.

And we chatted about that kind of ahead of the show where it's like, unless you're in it, it's really hard to understand.

And so, you know, we've had the pleasure of having the Georgian angel network come on, who is also in your area, to come on and explain, you know, what is angel investing.

And that was awesome.

But it kind of left this, like, wide gap at the end because they talked about how angel investing, they're really trying to build a company up to get it to a stage where a VC will been right.

But that was it.

That was kind of the end of what we got to.

And so I'm really excited today to paint the other half of that picture and what that looks like.

And not to mention the work you're doing with BKR is groundbreaking.

And I'm very excited to chat about that.

But before we do, lease, how did you end up on this journey?

Were you always this entrepreneurial driven?

That's a very good question.

I think probably how I ended up in this journey.

And I guess, yes, maybe I've always.

I've always been very entrepreneurial driven.

I think that the best way of describing the way I take decisions is that I'm very purpose driven.

Let's say I'm very intentional in the choices that I make.

And very early on I realized that there was a big gap between what society was seeing in the black community through the media and what I was seeing in the black community through friends and family.

So what was portrayed publicly in terms of maybe the societal issues that CMC wasn't what I was seeing around me.

I was seeing driven, intelligent people who worked hard.

And I always wanted to understand how do.

How did we bridge that gap and how could we sort of like get out of this single story and single narrative that was going on around the black community?

So that was always something that was in the back of my head.

I grew up in Montreal.

I'm a Montrealer, and hence the Francophone accent.

And with that, I sort of grew up in a very French Canadian environment.

I decided to venture out when we have this school system in Quebec that's called CJEP after high school, that's very unique to Quebec.

So we did five years of high school and Then two years between university and high school, and I decided to go to an English cjap which was very, very different than what most people around me were doing.

And for me, I was not, let's go to this adventure.

Let's give myself the tools that I need to succeed in life.

And my English is very, very poor.

Very poor.

So I arrived there and for some very strange reason, which, with the placement test, I ended up in the most advanced classes in English.

So I was like, studying Shakespeare and I could not understand a single word that people were talking about.

So I had to write the books in French and in English to make sure I could understand.

But what was super interesting during those two years is that obviously I started with very limited abilities in English, and then I ended up pretty much knowing how to converse.

And, you know, like, I did well in all my classes.

So it just taught me that it was not scary to get into an environment that was completely unfamiliar and you can sometimes learn as you go.

So I did the same thing afterwards.

So I went to HSC in their first trilingual program, which was French, English and Spanish.

And we had like a third of our classes in Spanish.

And again, you know, I think I'm also very competitive inside, so I needed to have good grades.

So I. I wouldn't really make sure I understood what I had to understand.

And yeah, as part of our program, we had to spend some time in Latin America.

So I spent six months in Argentina.

Wow.

I could speak about economic development marketing in Spanish, but I did not know how to say, I want to cross the street or where is it?

Yeah, yeah, yeah, super interesting.

But, you know, again, being immersed in this environment and all my friends were from Latin America over there.

So I had, like, I made very good friends from Mexico, Peru, and obviously Argentina as well.

And that also sort of allowed me to grasp, you know, more in terms of vocabulary in Spanish.

So that was quite nice during one of our trips.

So that was around the time of when Mohammed Yunus won his Nobel Prize of Economics for microfinance.

And something I forgot to mention is that previous to that exchange, I went to Burns for the first time.

I. I was born in Burns, but I arrived in Montreal.

I was one.

I went to Burundi for the first time at around 18.

And I was shocked because, you know, Burundi is one of the poorest countries in the world, but I met some of the smartest people that I know up until today.

Right.

So it was really interesting to sort of see how the private sector was the business that were Working very well, were mainly foreign owned.

And like the rest, you know, everything that was no development focus was no centered around supporting the population.

But also it felt a little bit like keeping them in that same situation.

So I noticed that and it sort of shocked me and I felt like something needed to be done.

I did not know what.

But this also that in addition to the narrative that necessarily call what I was saying, also like steered something, I wanted to do something about it.

So going back to my time in Latin America, I think I was in the bookstore in probably, I think, and I saw this book.

The title was in English, how to Change the World.

And it was about social entrepreneurship.

And it was such incredible stories about people from different backgrounds in different places around the world who basically decided to solve really, really big problems using private sector.

So building businesses around it so that they would be sustainable.

And I fell in love with the whole concept because not only are you building something that's sustainable, but you're also creating role models for society.

Children sort of start looking at their parents, seeing what they're building and having this understanding that they can build that themselves too.

And I knew I wanted to have something to do with that world.

Later on I did an internship with Microsoft Finance in Burundi as part of my studies.

And what was interesting as well too, it was it was really cool to be able to do, you know, credit checks, but in a very different way.

You know, you had to go to churches, sort of learn about, you know, people because there was obviously at that time at least a strong credit bureau.

So how do you assess the character is basically being in the environment and hearing what people say about others.

Wow.

Which was super interesting.

Yeah.

Also very impactful because we're lending to groups of widows as well.

So you could also see the impact that had in their lives.

You know, when you lose your husband and burn the.

Often you lose everything else.

Like the property at that time at least was not necessarily attached to the woman.

So it was really hard.

So being able to provide a financial system where they could rebuild themselves and create some sort of economic autonomy was really, really meaningful.

So that was nice.

I loved it.

It was a big grassroots.

So I knew I wanted to still be around that level of entrepreneurship that was impactful, but not necessarily know how.

I sort of stepped back, continued my study and ended up in the hedge fund world.

So nothing to do at all with all of that.

Although I loved it, I think, you know, I guess a common trait in my life.

I just really love being surrounded by extremely smart people.

I love learning and it was such a dynamic environment.

I still speak to some of my previous colleagues up until today.

It was.

It was one of the best experiences in my life.

During that time.

I did my CFA charter holder as well and I became a CFA charter holder.

And then I also was part of this group of women bankers who were interested by this new concept.

New for us, I guess, but I think some people have been doing it for quite a long time.

But in 2008, JP Morgan came up with this report around impact Investing.

And I think that's really what created additional eyes on this asset class.

And we wanted to know what could we do to position Montreal with respect to that asset class.

So we're meeting on a regular basis, bringing speakers from all around the world.

I think it was mainly at the RBC offices at the time.

A really, really great experience.

Then I was just like, this is really nice because impact investing is investing in entrepreneurs, innovators with the dual purpose of having social impact and generate financial returns.

I just thought, this is wonderful.

It's really what I wanted to do.

Not necessarily being the one that will build the business, but supporting all of these innovators having impact at scale.

I thought about the big problems that are being solved in emerging markets and even combine my ambition of changing the narrative.

I was looking historically at some other populations that went through a bit that same reputational misconception as the black community and were able to change that, turn that around was me by creating strong countries that were at the table and then that basically sort of decreased at least 70, that misconception.

So I thought, you know what?

Why don't I try to support innovators on the African continent?

So I decided that this was my next mission.

I left my job that I really love to do an MBA in China because I wanted to better understand the China relationship.

It was a continent that I had no exposure to at all.

I wanted to learn the Chinese way of doing business, I wanted to create a network and I wanted to learn Mandarin.

So I spent two years there.

Wonderful experience, made great friends.

I think I earned a lot.

Like the thesis around my MBA was around impact investing.

I probably volunteered for every impact investment event on the Asian continent during those three years.

Wow.

Like, I really wanted to learn.

I was really passionate about what was happening and came back to Canada and worked for a little bit with Seron Asset Management, which is a funds of fund that is investing in funds in emerging markets.

And that was also quite nice.

It's a great team doing really impactful work.

Fast forward a few years later during my first mafia, I decided that I wanted to do something very, very different.

So me.

And it was also a good timing for my life partner.

So we both decided that we're moving to Vienna with Engineers Without Borders Canada.

Wow.

And that we're basically.

So I was supporting them creating their impact investment firm.

That activity.

They were just starting that and he was supporting them with angry businesses providing business consultant support for them so that they can grow and become a bit more sustainable.

I was with engine injuries of all borders per year was super interesting because I think I underestimated the amount of work that it takes to take care of a child in the first year and how fast changing without a support system.

My gosh.

We have a.

Just on.

On that note, we have a 10 month old right now and he is a handful.

So I can imagine.

Yeah.

Congratulations, by the way.

Thank you.

No, it was, it was quite something.

Especially because I think that right now with COVID everybody is used to serve like managing personal and professional situations all at once.

But you know, I was a team of one in Ghana and you know, I was on calls with baby sometimes crying.

So I had to.

Yeah.

And still listen and take care of him.

So I was doing that like four days a week at home.

Then I would put all my meetings in one day and my partner would come that day and work from home.

So.

But at some point we figured out a really good support system and worked well.

But yeah, it was.

It was super, super interesting.

Yeah.

And so I, I stayed with EWB for one year and then I transitioned as the temporary CEO for tech startup that was based in Vienna.

And that also was a really humbling experience.

You know, it was nice to have that operational side and you wanted to go back to the investment side at some point.

But you know, it was really humbling to hear investors on the other side of the table telling you what you would have told yourself in that same situation.

But you know, but sort of receiving that with everything that was happening in the back, that was quite humbling.

And.

And I really love that experience from that perspective.

I think I learned a lot with goods and bads.

The company's still going and the CEO is in charge of it now.

But it was an interesting experience for sure.

Then I went back on the investment side and I was in charge of the impact investment strategy out of Cote d'.

Ivoire.

So we're running a fund that was investing in edtech doing direct investments, doing also fund investments linked to education and Also, funding a venture builder was building companies in the education space, all for Diwal.

And that was fun because we were touching different types of instruments at the same time, really seeing the impact of the different type of company investees were creating.

And I came to this being always finance first.

You know, coming from the hedge fund world, I really wanted all our initiatives that we're financing to be sustainable and to be profit maximizing, because that's how I feel that you can eventually just get more and more doll.

Right.

So it was fun.

One of the challenges that I had and that surprised me while being on the African continent is that it was not just for me, but for a lot of different investment vehicles is that money from outside often wanted to invest in investors coming from outside the continent.

So that gap that I was trying to fill by funding success stories that were local, bridging the narrative was harder than I thought, even on the African continent.

And that's when I knew that I wanted eventually to own my own strategy.

Because I could see, again, tons of really wonderful innovators that just could not get the funding that they needed to create their.

To just grow their product.

But they were really good.

And you would see lots of funding being channeled towards initiatives that had very little understanding of local context and would basically fall for things that were predictable.

So all of that really sort of like it.

It basically pushed me to gain a bit of a timeline.

I gave myself a timeline to, you know, when I would start to do my own initiative.

Then I was about to welcome my second son.

So I just thought, you know what, let's have a proper ma.

Let's go home just for that.

So we went back to Canada and my second son was born in February 2020, a few weeks before the world stopped working.

Wow.

So it was supposed to be, you know, for a few months, and I'm being, you know, a lot longer.

I was, you know, home when the murder of George Floyd happened.

Yeah.

And although I didn't watch the video for a long time, like, I saw, like, all the hurt and pain that people, that's.

It's easy to forget what it is to be a minority when you do spend a couple of years in a place where it's no longer the case.

But there was so much pain during that time.

And I felt that I understood why I wanted to invest abroad.

But I just realized that sometimes you have to start in your own backyard.

You have to clean things up at home.

And I met with my business partner, Isaac, during that same period of time, who has done amazing things in Ontario, working with the black community.

And we just saw eye to eye in terms of what we wanted to build, Investing in incredible innovators and diversifying the face of success.

So we decided to create VTR Capital, which was initially called Black Innovation Capital.

Okay.

And we had our first launch in 2021.

We went to raise $10 million and we oversubscribed to 22.

Became becoming the first blackbed VC fund in Canada managing strong dollars.

Yeah.

Yeah.

So we made history.

Was a bit, you know, it was.

It was interesting from one side because, you know, it's.

It's supposed to be the news on the other side, but like, okay, but it's 2021.

This.

Yes.

It feels, you know, it feels quite late.

I was honestly.

That was exactly what was going through my mind when I wrote that down.

And I was just thinking how.

Yeah, you're right, it's 2020, you know.

Exactly.

So it happened in 2021.

That was quite late.

And.

And the reason why we keep on mentioning it is because sometimes it feels like there's no problems, you know, especially as we see a lot of initiatives or maybe people on TV or people talking on stage.

But from a capital.

From a capital perspective, it's still an issue.

You know, when we started BKR, 1% of venture capital dollars were going to black founders in North America.

In 2023 went down to 0.48.

So I think there's a lot of noise.

People feel like there's change, but there's less and less money.

Obviously there was a big crisis from a macroeconomic perspective, so money went down for everyone, but it was disproportionate when you're looking at the black population or even women as well.

So that's a bit of our story and how we got there.

We've invested in 13 companies to date.

We have a concentrated strategy.

We look at becoming partners for growth for all the companies we invest in.

And it's been a fun adventure.

The CEOs of our company are really special individuals.

They're driven and they're looking at changing the world in their own way.

And we feel privileged to be part of the their adventure.

The work you're doing is incredible.

I just want to, like, just start there.

You're incredible.

The work you're.

You and your team are doing is incredible.

Yeah, it's.

It's unreal.

It's unreal.

And, you know, I look back at your story and I've talked to actually other founders and other companies here in Canada who are.

Who have been investing in Ghana and I wanted to spend a little bit of time there because you spent a lot of time there.

What is going on in Ghana?

Because it sounds like some stuff is happening.

Yeah, I think all over West Africa.

I mean, there's a very interesting economy growth and I think also a beautiful lifestyle.

I think that some.

A lot of people sort of, you know, have this perception that being in North America is better.

But when you spend some time in Africa and you're sort of seeing, you know, changes in the infrastructure, also a lot more help at home because over there it's snow.

It's common to have, you know, to have basically people who will work in your house as well and so supporting you with certain things and just.

I think just a better quality of life generally.

What I love a lot about Vienna is that the music scene also was quite incredible and people were extremely.

I find people are happy.

Like, you would go to this shopping mall and good music would be playing and you would find a group of people dancing just randomly and you just.

I'm an extrovert, so I really capture positive energy.

This is the type of stuff that would make me smile.

Very warm culture in Ghana, in Cote d', Ivoire, Nigeria.

I think I've had really great experiences there.

And for Ghana, there was a lot of push around the year of return where they looked at making people come and discover the country.

Lots of touristic attraction.

And I spent some time in Cote d' Ivoire as well, and of the same thing where infrastructure has been built quite a bit, especially around the World cup too.

Sorry, the.

The Afcon African cup of Haitians for soccer.

So it's just such a nice environment, beautiful infrastructure.

The beach is not far, people are really nice, the food is good, so it's worth at least going for a visit.

It's not to sort of live.

No snow, right?

No snow.

As Canadians, we're just like, we just want to get away from the sn.

Oh my gosh.

Yeah, it's.

It's incredible.

Like I said, we've had.

We've had a couple people on the show talk about Ghana and specifically about initiatives that their companies are starting to do there.

And so it like, kind of piqued my interest.

Not to mention, we have a really large listenership from Africa of this show.

And actually one of the places is Ghana, another one is Nigeria.

We have a lot of listeners from Africa who listen to the business development podcast.

And I'm just thinking, man, things have got to be happening in Africa.

People are building business.

Yeah, the youth is incredible.

I think there's also, unfortunately, there is a big gap with respect to employment, lots of underemployment.

And I think we have a group of young people who are just very focused on changing their own destiny, solving problems.

So there's a lot of.

Lots of action going there from that perspective.

Yeah.

You know, you had mentioned.

You had mentioned that a lot of the women you were working with were widows.

Is that just like natural disease or is that something else?

So when I was doing this microfinancing initiatives in Burundi, it was targeted at widows.

So it's not that there was a particular issue around it.

It's just that this particular group wanted to support highly vulnerable people, and widows in Burundi are amongst the most vulnerable people.

But it was.

But, yeah, that was the goal of the initiative.

Oh, okay, okay, okay, I understand.

Yeah, I just.

I was worried that it was like, potentially war or something like that.

Yeah.

You know, one of the things that I really wanted to chat with you about today was specifically venture capital.

And what is it?

Where does it fit in, like, the grand scheme of companies?

And, you know, what should people consider?

What are venture capital firms looking for when they're looking to invest in companies?

And I know that's a lot.

I know I just hit you with a lot of questions, so feel free to just give us a full 101 on venture capital.

And like I said before this show, we've talked to angel investors, so we've gotten that far.

We understand that much.

But what we don't understand is the next part, which is venture capital.

And so would you mind taking us into that today?

Absolutely.

What pleasure.

I think to first start, it's really important to understand the role of venture capital, so why people invest in such a way.

When you're looking at, for example, the main clients of VC funds, it's not just the entrepreneurs, but it's also the investors and the institutional investors.

So they have a portfolio of assets that they're investing in.

So they will invest in the stock market, they will invest in bonds, like government bonds, for example, but they are looking at, usually because, for example, they're managing your pension, the amount of money that they're managing needs to keep growing.

So venture capital is an asset class that allows them to have exposure to outsized financial return so that it can help grow their pool of capital and also and just respect their obligation towards you.

And once you retire and you need all the money that you've saved for in that commerce of growth, with those savings.

So when they choose who to invest in, they have to have this confidence that they are investing in the teams that will choose the right type of businesses that will help them grow their asset.

So I'm starting with that just because sometimes I feel that people script see people with managing assets and saying, well you should just put money here, just put money there.

But there's really this obligation of performance.

We're taking risks, many a high level of risk, but we're doing it with this mindset of how do I get this type of financial returns?

And it's not just greed, it's about that's a purpose of the asset class for some of the investors.

And the goal in the market of venture capital, which is really cool, is that it also funds most of the innovation.

So most of the really innovative tools or products that you're using today has eventually been funded by a venture capitalist.

So uber doordash, you know, everything that's making our life a little bit easier in start received VC dollars at some point they took the risk to create something that was a bit different.

We also can see that, you know, although venture capital is extremely selective.

It said one of my advisors was telling me it's a no business, right?

So you have to say no to 98% of the startups that you're seeing and you're sort of investing that 1 or 2% startups because you're looking for those gens and for those opportunities you feel will outperform the market.

So if you're looking in the past there was a 20 year study in the US where they could see that only 0.05% of businesses have been funded by venture capital firms.

But if you looked at IPOs, about half of the businesses on the stock market were funded by venture capital firms.

Which showcases that the companies that are going fast, that are super innovative, that are hiring like building value usually have impact.

So that's also the super, the very important role like venture capital firms having the market driving innovation, driving growth.

So having said that, how like what, what do venture capital firms look for?

So we're looking to partner with individuals that have this growth in mind as well.

So often you know, you will see like we do see some people that you know, have a bit of a, they have good ideas, they want to have a business that will be successful.

But if we can't see them making a certain amount of money, so that the golden number is basically how what's the pathway towards $100 million annual revenue?

So you can Have a business that is really great and you're like, oh my gosh, I can definitely see this business making, you know, five to $7 million per year, which is a good business.

This is not a VC business because this is not where the VC would make outside financial return, but it's a good lifestyle business.

So this is also what people have to sort of like realize.

So going and choosing a venture capital firm to finance your business adds this level of stress where you have to grow, grow, grow and grow.

You cannot just say it's enough.

There is no ride it out.

Exactly, exactly.

And it's also depending on how you're looking at exits as well, because some, you know, some entrepreneurs and totally have the right to have that vision, want to, to stay owners of their company forever or even pass it down to their children if you.

It won't necessarily work like that with a VC firm where the whole goal is to sell the business at some point or make it public.

And usually CEOs of venture capital firms will end up owning very little in terms of ownership of the business, but very little of a lot of money, which, you know, usually is better than having 100% of a business that is worth a little.

So those are the considerations to keep in mind.

Wow.

Wow.

Okay.

Okay.

So typically you're looking for companies that you guys can ultimately see making about $100 million annually.

So that's a lot.

That's a big jump from, you know, a lot of these angel investor numbers.

How does that work exactly?

Do you look at, do you look at a company and you're like, yes, I think this company can do that.

Or is there potentially like a set revenue that you're looking for them to hit before you'd consider them?

Like, for instance, if you're looking for $100 million, obviously that's going to take investment, that's going to take some extra help, that's going to take some stuff.

What are you looking at in a company to make that determination that they could become a $100 million a year company?

So first and foremost, it's a long company.

Right.

So we have to sort of really look and try to read the future.

So we're looking at the company today and seeing what are the different indicators that support that growth.

We invest very early, so we invest at the PC and seed stage off.

And has happened that some companies don't have revenue yet.

So the most important indicator for us to start is the founder or the founding team.

So when they have a team, and sometimes it's really nice when they already have experience because entrepreneurship is extremely, extremely hard.

I think people saying that it's one of the hardest things in the world.

And sometimes you have people who have never done it before but have, you know, have big dreams.

But once they get in there, they realize how hard it is and they have to know what means not for us.

Right.

So having a second time founder is really interesting because they know, you know, they really know.

And they're like, I want some more.

You're like, okay, so you know what you're getting into.

Yes.

So that's one thing.

And even if you don't have the experience, knowing we have one of the founders in our portfolio, it was funny because you could sense that experience interacting with him because he comes from an entrepreneurial family.

So be seen, you know, whose parents go through the different cycles.

So again, they understand what they're getting into.

And second is also to have an understanding of how much they know about the business they're in.

What's their unfair advantage?

We do see, I guess, a subset of entrepreneurs who really want to solve a problem, but they're looking at a problem from outside.

They were outsiders.

They looked at it, they're like, okay, this needs to change.

Maybe they were a customer of the issue, but they haven't spent enough time being inside understanding what drives people.

Because imperfection doesn't mean that people are willing to pay for a solution.

There's very imperfect settings for different reasons.

And if you have a really in depth understanding and also an unfair advantage in terms of the distribution channel.

So if you know that, for example, in a certain space, people spend a lot of time doing certain things.

And while they're doing that activity, you can connect with them and sell them, you know, your product or your service.

Maybe that's information that others who are not in the space would never know.

But you know that it's understanding how much that founder understands the ecosystem they're in.

We love to see a bit of a team as well.

What is great, some of the founders in our company, in our portfolio are just able to attract talent.

It's funny because you see their teams looking at them and being like, I want to be part of this adventure.

And you know, and early on in this journey, you don't have all the money in the world, obviously, and it's going to be tough.

It's long hours, so you have to be able to inspire people around you to follow you and people who make a lot more money elsewhere.

But to see that vision, that mission Right.

So like seeing these leaders or these people who are transforming into leaders, having that gen that are able to find talent and get people to want to work with them is also important.

So that would be interest.

That's what we're looking at in terms of the founding team.

Then we're looking at the market as well.

So we have, you know, sometimes it has happened that for service seem like, wow, they're amazing, but we don't believe in what they're building.

You know, for example, we don't think that this is going to go far, but you know, this, if they were doing something else, for sure.

So it's like the size of the market we had, like, you know, where the market is going, how much competition exists as well.

Because sometimes if you're building a feature and you feel, and I know that a lot of people take offense in the question, you know, what if Google builds it or what if Microsoft builds it?

But I've seen founders spend a lot of time on like features, but then I've seen Microsoft roll out and I'm just like, you know, you have to have this ability to, to build something that, that is defensible.

Right?

So looking at the product, their ability to execute, and looking also at the evolution of the market as well, and the size of the market is important.

For founders that are really looking to secure VC funds, let's say they've been through seed, pre seed, all these things, they have angel investments and they're thinking, okay, like obviously the angels are telling them, hey, you guys need venture capital.

They're thinking it's, how can founders stand out to a VC fund?

What are some of the things that they can do internally before they even start looking for vc?

That's a very good question.

You know, most of the time, especially even if we're investing early, what we're looking to do is to support a founder that has done their homework.

Right.

I think that them already have a clear idea of their deep problem that they're trying to solve and just making sure that they are out there, that we understand who their stakeholders are, that they really have a clear idea of how to go about the first few months of their business.

Because sometimes it's interesting, but you, you get in front of people who are almost thinking out loud in front of you, you know, and, or are just, you know, you feel like they're almost, they're not necessarily structured and looking at winning in their space in an effective way.

As a venture capital firm, you want to be that fuel, right?

But you can't do it if there's, you can do it if there's no fire.

So they have to be that fire and they have to be extremely intentional about the different moves that they're making.

Understanding the market, creating the signals, being ready to pivot if ever that's needed.

But you can definitely tell when an entrepreneur is always thinking and it's grasping the information and it's adapting and you want to be part of that story.

So I think that the first thing that you should do before, that any entrepreneur should do before getting in front of a VC is really have an in depth understanding of the problem they're trying to solve.

Understand if this is an actual problem for the people that they're solving it for, if there's a real ability in willingness to pay and you know, and have an understanding of how they get that unfair advantage, why them, you know, versus somebody else to solve that issue.

And also they have to understand why they want VC dollars too.

Because, you know, like you said, you know, angels can push someone saying, hey, I want to invest, but I want you to start having conversations with vcs.

You might not necessarily be ready for that level of pressure.

Maybe you want more time to be able to figure things out before you actually get that external money pool starts, you know, asking you to move faster.

So just really being intentional and aligned with every step of the process.

Lease, what happens when VC finally steps in?

You know, take us to this.

Like that's like a moment that almost every founder of a tech startup is looking for.

They just have it in their head, like what happens when we finally get that help?

What actually happens?

Can you walk us through maybe some of the companies you've invested with and like what happened to them once VC stepped in?

The world changes slightly.

The sky becomes more blue, you know, it's sunny every day, the bird sings.

So the way we position ourselves, and this is true for us whenever we invest in a new portfolio, companies that be the part of our family, right?

So we want to be there to support them and become strategic partners for them.

But again as a support, you know, like we're not part of the company, we're investors so that they can use us the way that benefits them the most.

Before I talk to what happens after, I think that there's probably not enough time that is spent around the negotiations before an investment.

So, you know, we want the VC dollars, but you know, once due diligence has passed, which can be a bit painful depending on the length of the due diligence and who the venture capital firm is.

It can be long, lots of documentations to pull out.

You have to have a robust data rule.

And then there's the legal negotiation, negotiation around the valuation.

And as with any negotiation, you know, you and some use some and you really have to understand what's the value that you're looking to get on the other side of the table.

And you might not get the value that you wanted, for example, or there might be certain terms that you have accepted that you're not necessarily happy.

But same thing on the other side of the table where we also might have conceded things that we don't necessarily concede normally.

So that whole process has its ups and downs, right?

So you know, you're closing it, but you're closing it.

It's the end of a race.

That's also, that also can be a bit tiring.

Then you get the money in the bank and the work starts.

Know that a lot of VC funds in Canada are look at, you know, bringing a lot of value to their founders.

They will open their books of contacts for them.

So if you need support in many types of way, introductions to companies or even like in the fundraising process, commit to basically an investee.

You'll start, you know, talking to the other venture capital firms in your network and start selling that invest even if they're not in the room.

Right, because you want them to also be seen and receive additional funding.

You know, we at bkr, for example, have discounted, have negotiated discounted services for key items that we believe are important for startups.

And sometimes because we invest early that they don't have these items in place.

So for legal counsel, for example, having, you know, lawyers, and often that happens before we actually invest in the company.

But lawyers that understand the tech space or for, you know, accountants, you know, payroll, software, we have a head of talent that works with us on a fractional basis.

So, you know, often it's the first time you have to manage a team.

So understanding how you do performance reviews or how you hire better or how to deal with certain issues that we never had to deal with before.

It's really nice to have somebody else to be able to talk that you can talk to about these issues that can provide you tools, we become a bit of that basically party that they can call on when they need.

We're beginning on governance even early.

So we often ask for a board to be set up.

So that becomes when we have those quality board meetings and want our companies to just be set up for success so that they're used to having those conversations and to just make all their business in order to be able to present it so that as they grow it doesn't become a big shock as well.

And as much as, you know, sometimes you do have a bit of pushback at the beginning.

Most of the feedback about having a board has been super positive.

Right.

Because it's all about who you bring onto the board in terms of level of expertise.

And you also have to be, you have to have this level of trust too.

They've all been super grateful to be surrounded by people with that level of expertise and that level of support.

So that has been something that we've been quite happy to have been sort of pushing for most of our portfolio companies.

And yeah, it is a roller coaster because not only do you have to deliver from a business perspective because you know, we do ask for performance, you also have reporting that you basically have to produce on a regular basis.

But I think that usually entrepreneurs feel quite alone in their journey and having, you know, venture capital firms as partners is often something that really helps.

We see so many other businesses.

Yes.

You know, we've seen so many businesses.

So we both serve the event tips and most of us will answer the phone, you know, late in the evening on the weekend.

So we're there to re support because we have this vested interest.

It's not a loan where you know, you're getting your interest regardless or like you're asking for your money back regardless of how the company is doing.

We're all vested in the success of the company and because of the time it takes for due diligence and partnering, we're all destiny each other's well being to a certain extent as well.

Right.

So yeah, it's not just money.

It's like money and a pile of knowledge and a best friend at the same time.

Yes, that sounds pretty good.

Yes.

The best one that you have to be accountable to.

Yes.

Yeah, yeah, yeah.

You know, by the time VCs get involved, you were mentioning that like so many big companies, if you look back, VC was involved at some point.

Does it greatly increase the success rate of a business?

I know with like, with angel investing, I was kind of being told that like it's a very small percent, I think like, I think they mentioned like 5% or less.

I can't remember it's been a minute since I've had that interview, but it was very, very low.

It, it seemed like a hell of a gamble to be in the angel investment world by the time it hits VC level.

Is the success rate quite a bit higher?

It's probably higher than angel for sure, but it's still very low.

Especially like I'm talking about our stage pre cnc because it's high risk.

When we're thinking about entrepreneurship generally, businesses tend to fail quite heavily when we invest in companies.

The reason why we want so many of them to have this vision towards that $100 million pathway is because we at least want one or two of them together out of all the companies that we have invested in.

Right.

So we can't sort of come in and sort of say, oh well, no, you can't come in not being sure because life is uncertain.

So you have to basically have full faith at the beginning and then try to see how to make that happen.

But failure rate is high.

It's funny because on our end, because of our mission, we're a little bit less accepting.

We really want all of our, you know, I think some venture capital funds, you know, really understand the power law and just understand that, yeah, you will have the companies that will be fund returners, meaning that it will make all the money at your fund, that it will give you back the money of the size of the fund so that you can at least reimburse investors for that basics.

And then we have others that will also like give you all that interest and all that conflict that carry that, you know, will be your.

The extra.

But we want all of our companies to be funny traders.

So that's what we're working at.

It might not be super realistic, but this is the challenge that we have decided that we'll try to basically go after.

Yeah, no, I, I totally get it.

It's like any investment, it's like it doesn't matter at what level, there's always a level of risk and you definitely want to mitigate that wherever possible.

I guess in my mind I kind of thought, and I'm surprised by your answer actually, because I kind of thought that by the time it hit vc, it was a damn near certainty.

And it sounds like that is not the case.

But that's why you want so many.

That that's why the return requirement is so high, is because it is a hard job.

It is a hard job.

And when I was talking to earlier with investment from the institutions, when they want to have sure return, they will go on stock markets because you know, you know that with time it still goes, you know, in a certain direction.

They will go with money like, you know, government bonds, many market instruments, but when they go towards private equity, which is already a little bit less risky than we see.

And.

But they still, you know, require higher return than what they would or, you know, what is public investment.

VC is the riskiest asset class.

That's why we, that's why we want to make a lot of money to sort of compensate for all the losses.

Right.

And when we start seeing ec, there's different categories in bc, so we invest early stage C and qc.

So that's a lot riskier, for example, than those who are focused on fleets A and B.

Then you have those C and D, you know, and then E and up.

So depending on where you are in that chain, value chain, then that's, you know, level of risk is different.

But we're still at the early stage, so our level of risk is higher.

Yeah, yeah, no, that's fair.

That's fair.

You know, we're coming to the end, but I want you to take us into BKR Capital.

You know, what are you guys doing?

What type of investors are you looking for?

What's on the horizon?

Keeping in mind that when the episode will air.

Yes, a lot of time, it'll likely.

Be summer, fall, 2025.

So we're actually recording this at the moment in October of 2024, just to give our listeners a little idea.

So they could be like, frankly, 10 times further ahead than they are right now.

That's what I'm hoping for.

Lise, thank you.

So right now, at this moment, in October 2024, we are finalizing the deployment of our first fund.

And we also have.

We also have started raising for a second fund.

We're looking at raising for $2 million fund.

We have 13 portfolio companies.

We'll probably add one or two additional to fund one.

And we're looking for funds.

We have between 20 and 25 companies.

We stay sector agnostic, we partner where we can add value.

So it means that we still have to have a level of understanding of the space, looking at our own network and feeling that there are additional ways that we can add value.

I know.

In addition to the capital.

And our general thesis stays the same around diversity.

Amazing, Amazing.

And like, where are you funding?

Are you specifically funding companies in Canada, North America, the world?

Where are you looking?

So we're.

So for one, it's 90% Canada and 10% outside.

And outside includes the U.S. so the companies have to be at least registered in the US because that's a jurisdiction that we understand.

And then from the moment that they're based here in the US what we've seen often is that the entrepreneurs that we have are so driven that they're looking at expansion very fast.

So the coverage of our portfolio companies is quite wide.

So we have lots of activities in the Caribbean, obviously in the US on 20 plus countries in the African continent.

So it's quite like.

Yeah, wow.

Okay, okay.

And what types of companies are you looking for?

You did mention your industry agnostic.

However, I'm sure there's certain things that you're like, okay, I want to spend some more time in this.

What might those look like?

We love fintech.

Fintech is one area that we are seeing.

We were seeing a great deal of deal from around financial technology.

So this is something that we're quite excited about, especially with talking about AI as a way to support blockchain as well.

I think we're seeing a lot of companies that are trying to solve for the hiccups that exist when it comes to international transfer and remittances.

So we are really looking forward towards like the next generation of companies in that space.

Cyber security is a space that find is quite interesting especially around the issues that will start coming over, you know, the day.

For example.

Yes, it's quite scary to think about, you know, with again there's a lot of work also that's being done in trying to make sure that we can attentively videos or presents or voices in a way that is not applicable.

So that's something that interests us quite a bit.

The future of health care as well is a piece that we love.

We have invested in amazing companies in that space, you know, working for example in trying to support patients with dementia, which is something that will keep on growing unfortunately with our aging population.

So how do we support our communities as they age is important.

And just also how do you keep on better understanding how biology works so that you can provide treatment that works for everyone despite their differences.

So that's what we've been doing for Fund one and we'll look at additional initiatives in that space.

It's really interesting that our companies are working on subject that affects everyone but with that inclusive lens on top of it.

So it's really for everyone.

It doesn't leave anyone behind.

So we're looking at more of that.

We're quite excited as well.

We're sex agnostic, so lots of things excite us.

So we're quite excited as well about clean energy.

Yes, you know, this is something that is big for us.

We have invested in a company that is basically supporting the exchange of carbon offsets and wants and also just making it more accessible for individuals to offset their own carbon footprint.

So looking at to know how we can have even more of those case studies where, you know, everyday people can benefit or can just be better at their consumption from a perspective.

Amazing.

Amazing.

And if we have companies listening who are like, yes, that's me, do you have a way that they can reach out to you and introduce themselves?

Absolutely.

I'm on LinkedIn so Lizbeth and we can reach out on LinkedIn.

I'm also through our website as well.

So we have page where you can sign up and you know, if they have a company, it's really good that they give the link to their pitch deck.

Because of the volume of requests that we're receiving, we only get back to companies that actually provide additional information that we can assess or directly to my email, BEPR Capital CA More than happy.

To hear from Amazing.

And I will have all of this linked in the show notes and on the website.

If you find this and you want to find out more, it'll be there.

Lis, this has been absolutely incredible.

You are talking to a whole bunch of entrepreneurs.

You are an incredible, incredible entrepreneur yourself.

You launched an incredibly successful company in the worst time I feel like ever to launch a company.

2020, the middle of COVID and you've been, you've done incredible.

What's the best piece of advice that you can give to a new entrepreneur?

It's also cheesy, but I really believe that you have to follow your gut call.

Your Einstein can do the work.

This is straightforward, but I do believe that it's.

We're all made for something to do something specific and sometimes we know that this is the path we want to follow despite what anybody else wants to tell us.

So really, follow your gut, do the work and you'll get there.

Amazing.

Amazing.

Follow your gut.

I love it.

I love it.

This has been episode 268 of the Business development podcast.

We have been graced by Lise Burakandavi.

She's the managing partner of BKR Capital.

It was an honor to have you on Lise.

Thank you, Kelly.

It was such a pleasure being here.

Until next time.

This has been the business development podcast and we will catch you on the flip side.

This has been the business development podcast with Kelly Kennedy.

Kelly has 15 years in sales and business development experience within the Alberta oil and gas industry and founded his own business development firm in 2020.

His passion and his specialization is in customer relationship generation and business development.

The show is brought to you by Capital Business Development.

Your business development specialists.

For more, we invite you to the website at www.capitalbd.ca.

see you next time on the Business Development Podcast.

Fast.