“We think that growth equity in Canada is a massively underserved market,” says Cam Pollard, Founder and Managing Partner of Venn Growth Partners.
Unlike some in their space, this growth equity firm is not afraid to take a hands-on approach with distinctive founder led companies who inspire confidence, both north and south of the border.
Canadian Growth Equity Opportunities
“We are focused exclusively on providing true direct to balance sheet growth equity to support working capital, whether that be talent, innovation, R&D, new brick and mortar locations, digital strategy or inventory depending on industry,” explains Pollard. He sees a healthy amount of Canadian buyout capital, but a lack of growth equity.
“If you are a really fast growing company, whether it’s a digitally native brand, brick and mortar, or omni channel, it’s not clear who you go to for a value-added $10-50M growth equity injection,” he notes.
Growth Equity Partnerships
Venn is not looking to acquire and dismantle, but rather to form meaningful partnerships with companies that pair true growth opportunities with the right lineup of talent in place.
Venn’s website states their preference for working with ‘distinct founder CEOs’ and explicitly explains that they see themselves as hands-on relationship builders that are ‘sector specialists’ and ‘operators at heart’.1
“With our real operational bias, we love the space that we’re in for growth in terms of being able to do a lot of hand holding to help these companies,” continues Pollard. “We’re not looking to replace the role of the CEO, but we are actively involved on a daily basis in recruiting, strategy, capital allocation, brand positioning and being thought partners to founding CEOs. It’s a lot more work but, as long as there’s a real focus and a proven history of solid unit economics, we think there’s just so much opportunity in growth equity.”
Industry Disruption and Opportunity
Pollard notes the vast amount of disruption that has accelerated in the past year with omni-channel brands reinventing large industries.
“I think that’s a real theme that we’re seeing,” he says. “Many businesses that relied exclusively on brick and mortar have really had a hard time. On the other hand, people that have been innovating in their omni channel strategy, with their digital offering as well as their brick and mortar, we’re seeing a ton of opportunity in that space.”
Preferred Industries for Growth Equity Partnerships
Venn steers toward partners in consumer and education spaces as well as health care services, all of which present ample opportunity for market realignment.
One such partnership was formed with California Cowboy, which Pollard describes as ‘a direct to consumer, sort of après surf, après snowboard lifestyle brand.’
“They’re growing like crazy,” he explains, “even with their retail brick and mortar stores closed, they’ve had a rapid expansion of everything online.”
Growth Equity in Education and Consumer Goods
Higher Ground Education is another Venn partner utilizing a modern paradigm.
“We just led a $40M US financing into this company, which is the largest network of Montessori schools internationally and, again, really disrupting the early childhood education space with an omnichannel strategy.”
A current deal, being distributed to investors this week through a special purpose vehicle (SPV), finds Venn entering the ‘pet hard goods’ space. Pollard is excited for this growing category, observing that many consumer goods companies are using new focus on functionality, aesthetics and building a real community around a brand to breathe new life into previously established categories. He cites Yeti, who has upset the ‘commodity-like’ perception of coolers.
“Covid has been fascinating in that it’s actually accelerated a lot of categories,” says Pollard. “People that are thinking about channel strategy and are lucky enough to occupy in-demand spaces are really succeeding. We seek out truly ‘customer centric’ businesses, whether that be students, patients or traditional consumers.”
Analyzing Growth Capital Opportunities and Partnerships
Venn’s website touts their love of connecting the dots between consumer trends, business, economics, politics, and history, and of doing so collaboratively. As such, the group is careful to evaluate partnerships and opportunities individually.
“We’re trying not to make big macro plays,” Pollard explains. “I’m not the person to be making a big statement on the state of the larger economy. At the same time, we’re very cognisant of where we are in a cycle and we’re very much focussed on making investments that have a lot of downside protection in terms of not overly cyclical industries.”
Pollard believes that Venn’s partnerships fit the bill.
“That’s why we love education,” he explains, “it’s steady, it’s constant. It’s why we love the pet space, it’s growing exceptionally and it’s grown historically through recessions.”
Collaborations and Partnerships
As the company website points out, the group’s hands-on approach necessitates a strong amount of trust.
‘When we find leaders that share our passion, mindset, and approach, we have found partners’.1
