Last month, at the 2017 National Angel Capital Organization (NACO) World Angel Investment Summit in Montreal, Sophie Forest received the Canadian Angel of the Year award. A partner at Brightspark Ventures for the past fifteen years, Sophie’s investment experience, especially in VC investment in tech, goes back even further than that.
We got a chance to catch up with Sophie about what she considers good indicators of a company’s success, why she wound up investing in tech, and how Brightspark is changing the Canadian angel investment landscape.
“I’ve always been willing to take risks and willing to disrupt and do something different, that’s part of my nature. But I think the tech aspect is because I like to learn all the time, and I like to be on the edge and be challenged. And for me, tech is that: because it evolves all the time, it changes all the time. It’s always been interesting to be in a field where you can never know everything that’s going on at any point in time because it’s always changing. There’s always more to learn and new technology coming and disrupting what you’ve known until that point.”
Sophie began her studies in finance at Sherbrooke University and started out as a financial analyst at a large investment company.
“I was doing project evaluation for expansion, big industrial expansion projects, and then edging programs to make sure that we would protect ourselves financially. I didn’t stay there long, and while I was there I was working on my master’s degree part-time. And then a guy that worked there came to see me and said he was starting a venture capital firm, would I like to join as the analyst? It was the beginning of the nineties, and in those days, even if you studied finance in university, nobody ever talked about venture capital in Canada. Actually, the teachers didn’t even know what it was or what it entailed. So I had absolutely no idea, but had always been entrepreneurial and liked new challenges.”
It was the early days, when the Internet was first launched, and everyone was making up the rules as it evolved. Saying yes gave Sophie the opportunity to join a pioneer firm, one of the first private funds in Quebec to start investing in technology companies.
In 1996, she was approached by the Caisse de dépôt et placement du Québec, which was starting a group to do direct investment in tech companies. Sophie joined the Caisse, and stayed there for seven years.
“When I joined, the mandate was really to invest in private VC companies in Quebec. And then we grew really quickly to the rest of Canada, the US, Europe, and even beyond. The money we had to invest was way too large to only invest in Quebec. So we grew from a few hundred million dollars to several billion dollars. While I was there, we were investing in tech companies in North America and Europe.”
Fast forward to 2003, and Sophie decided to leave the Caisse to try something different again.
“I felt I had done my experience and my learning, and my entrepreneurial spirit couldn’t stay still too long. Mark [Skapinker] had started a private VC fund named Brightspark, and he approached me to join him as a partner in that fund. I joined Brightspark in 2003, and I’ve been there since then. It’s been 15 years.”
By the time she joined Brightspark, she had a better idea of what she wanted from an investment firm.
“It’s the VCs interested in small businesses that I think I prefer. Inefficiency drives me crazy. And also, I really need to create, act, change, and see the results. In a really big organization, it’s hard to do that unless you’re the CEO. It was going to meetings and seeing all the inefficiency and the politics. You have to spend a certain portion of you time on process. Which is fine, that’s what you need to do in a big organization where you organize a lot of people and a lot of people’s money. At BrightSpark we have a very high level of trust between the partners, for each other’s expertise and what we can each bring to the table. So the vast majority of our time is spent working with companies, selecting the best deals, helping our startup companies grow. There is very little process. That’s what I like and what I’m good at. And I think that’s because I’m self-driven.”
Having more time to spend working with companies and their founders is crucial, because for Sophie, one of the best indicators for selecting an idea or a startup to invest in is the people.
“It’s the people, 100 percent. When I invest in a company, it’s the people. And I would tell you that is really from experience. I’ve done it numerous times, and you can see where you’re successful and what the variable is that creates success in a startup. And it’s really the founding team. Sometimes it’s one person, sometimes it’s several. But it’s really the particular trait of an entrepreneur, of their resilience and extreme smarts.”
“Sometimes you’re wrong, but you can see a pattern that predicts whether someone will be successful. They’re usually not driven by money, they’re driven by creating something meaningful. It’s usually not about the most amazing technology. It’s about how you’re going to take that, bring it to market, and make it a success.”
In all her time as part of Montreal’s investment community, Sophie has seen some major changes. There’s more diversity in the companies she’s investing in, and the ecosystem has grown and matured.
“I think when I started we were in the infancy. We’ve been through a few cycles, so we have some people that have been successful, which is great. But we also have people that have lost, and have learnt from those failures. So there’s a lot more maturity in the industry. A lot more diversity also, which I think is great.”
“I see a lot more young women wanting to start tech companies and wanting to be involved in tech companies. When I was in my first ten to fifteen years of my career, I don’t think I invested in one company where the CEO was a woman. Not because I didn’t want to, but because there was none.”
“It’s also become a great place to start a company. We have more people deciding to start companies here. I think the government has gotten smarter about where they can help and how they can help. They’ve started trying to boost the industry instead of trying to replace the industry. In the beginning, since there was nothing, a lot of the government initiatives tried to do it themselves, which is usually not a good answer. You want to support the players in the ecosystem, help set up VC firms to work efficiently.”
And with regards to recently being named Canadian Angel of the Year, she is humble and articulate about Brightspark’s part in the award. As a VC firm, Brightspark has been working to change the angel investment landscape in Canada for the past three years.
“It was interesting because this prize was really originally created for the traditional definition of angels: somebody that invests their own money and then is involved in those companies. I can qualify in part for it because I’ve invested a lot of money in startups. But I think the prize was not necessarily meant to be attached to that. I think it was given partly because with BrightSpark I’ve been able to exponentially grow the angel investment.”
“We’ve been in venture capital for fifteen years, but for the past three years, what we’ve been doing is building a platform where every time we do a venture capital deal, we invite individual investors to join us. We’ve built a network with more than 2,000 investors that invest in startup companies in Canada through us. Which is very significant, because if you look at the membership of NACO, it’s not significantly larger than our own network.”
“We’re actually multiplying the number of private investors that can invest in the startup community. And that’s very exciting, because typically a lot of the money invested in startups in Canada has been institutional. It’s been government, or private VCs, or private institutions. The money coming from individuals has been very small. But with Brightspark’s new model, all of the money we’ve been investing in startups in the past three years has been private, through individuals.”
Having seen the increase in gender diversity in the tech sector since she first got involved, Sophie had this to say to young women interested in getting involved, either on the investment or entrepreneurial side:
“I would tell them go for it! The environment is a lot more favorable now, because there are a lot less obstacles than twenty years ago. In my own experience, having been equal partners with Mark for fifteen years, I think one of our biggest strengths have been our complementarity. It’s not unique to women to have such traits, traits can be gender neutral, but women sometimes look at problems and opportunities differently. And they bring something different to the table, so they should capitalize on that. I think every team should be diversified. Having different perspectives makes a team stronger.”