With many of the biggest tech giants getting their start on college campuses, it seems logical that universities would be a good place to look for the next Facebook.
Last Wednesday Front Row Ventures officially launched as the first venture capital fund in Canada designed to invest specifically in student startups. The new VC announced that they have partnered with Real Ventures to invest $600,000 in student startups in the next four years.
Front Row Ventures was started back in May of 2016, and is also the first student-run venture capital fund in Canada. MTLinTECH had the chance to sit down with two of Front Row’s co-founders since their launch.
“I was at Notman House with Volume7, and Eléonore [Jarry Ferron], our third co-founder, was working there at the same time,” Raphael Christian-Roy, one of the co-founders of Front Row Ventures told MTLinTECH. “We started building building Front Row and developing a model, talking with a lot of VCs. We tried to find the right model for a student VC in Canada. We looked at how we could have the most impact on student startups. And we looked at the models of other student-run VCs in the US and tried to adapt it to Montreal.”
“We treated the whole thing like a startup. We fundraised like a startup,” said Nicolas Synott, another co-founder of Front Row Ventures.
After winnowing down the different business models, whether to partner with angels or venture capital firms or a combination of the two, Front Row decided to partner with one VC: Real Ventures.
“When Nick [Synnott] joined us in September, from then until Christmas we fundraised and decided to build a partnership with just one VC, Real Ventures, that would invest in us to invest in student startups,” said Christian-Roy. “We talked to a lot of people who thought it was crazy or risky or not worth the time. It just made sense for [Real Ventures] because they understand the US market, they understand the models in the US. Our argument was that we were really a product of Montreal. In Montreal you have the biggest ratio of post-secondary students in North America, you have all the things happening with AI, our startup ecosystem is growing and booming. And all of this together made a good opportunity for them.”
In order to be considered for investment at Front Row, a startup must have at least one co-founder who has been a full-time student within the past six months.
We have so many universities, we have so many students, we have a lot of untapped potential. We are on the campuses working with them all day so we are in the best position to find these untapped students.
“There’s some flexibility with that, but that’s the baseline,” said Synnott. “It’s meant to be people who are studying and have a university focus and are developing a startup at the same time. That could be someone doing their bachelor’s degree up to a PhD student, or someone who came back to school. The importance is that you’re a student and you’re trying to use what you’re learning to answer and tackle a big problem at the same time.”
The Front Row team is made up of students as investors as well. The team currently numbers 20 including the three co-founders, and is organized into clusters by school affiliation. Each cluster has one partner who has a vote on the investment committee. Altogether there are five partners, the four cluster partners, and one community partner responsible for cultivating and building the student community across Montreal.
“Outside of the original three of us, we had to recruit people from all the other universities and campuses. Recruiting from your own university is already hard. So it was really about getting help from the community. We tried to attract people who already had a sense of startups or investments. We asked people we knew to reach out to the talented students they know. And we also did some cold emails to profs to speak in their classes. We reached out to committees and also did a soft launch here at Notman House in January. I think students understood the importance of what we were trying to do and were attracted to the idea. For our first year it was really good, we got around 80 applications for 17 positions.”
Once they had recruited their team, the winter was spent helping the new recruits become student investors. They participated in workshops and met people from the industry. For many of them this time was largely spent introducing them to the local VC community. During the summer, the student investors went on several deep dives into different sectors of the industry, like artificial intelligence.
“I think what will make Front Row Ventures successful is the alignment. We align with what actors in the ecosystem are already doing. If you think about entrepreneurship programs in all the universities, our interests align because they have an interest in their startups receiving funding. And they are in a position to send us interesting students to consider. Everyone is contributing to the success of the other. It’s the same with profs: they have interest in exposing venture capital to their business classes as real life examples of people who are doing things. We’re going to help more talented people focus on startups instead of going to big firms. You’re brilliant enough to build a startup, so do it. You can bring a lot of value to your community and to the world by starting your own business.”
“We could have created another accelerator or incubator,” said Christian-Roy. “But our focus is on venture investment. That way we can have partnerships with everyone in Montreal. It was really important for us to develop relationships with all the incubators and people in the community because the goal is to all work together to create something for students.”
Now that the team is ready and the funding is in place, the next big step is for the newly minted VC to make its first investment.