Member Profile – Doug Konkin
With a BSc in Engineering Physics and an MSc in Computer Science, Doug is well qualified when it comes to assessing high tech companies seeking angel investment. He is equally well qualified in understanding the challenges of a start-up because he’s been part of one himself – several times. As he tells it, ‘I sacrificed my PhD to start-up number four’, HyperCore Technologies, which was subsequently acquired by PMC-Sierra. Along the way, with both the successes and failures during his start-up career, Doug has learned a lot and that wisdom is invaluable to the start-ups he now mentors. He began investing independently in 2010 when a company he wanted to see succeed needed to solve a cash flow issue. The cash flow issue was solved and the company is still in business. Doug continues to play a very active role in the angel community and his final remarks in this interview may really explain why.
You have been a part of SCN for five years, and now as President, what do you see as the most important role of SCN?
Providing capital to startup companies is important, but the most important role is to contribute to strengthening and growing the startup eco-system: investing, mentoring, publicizing the start-up world; educating investors and entrepreneurs; lobbying the public and private sectors to support this dynamic sector of the economy; informing the general public of the value of startups. We are doing well at a number of these tasks, but more work is needed. We also need to promote SCN more in order to attract more members. More investors (members) make SCN more attractive to startups, which leads to more and better investment opportunities – a virtuous cycle. There are lots of investors that don’t know about SCN or appreciate our value – particularly the support of other members when investing.
SCN has recently gone through a strategic planning exercise. Should we expect any changes?
Our direction isn’t changing much; the planning exercise clarified and validated our objectives, and we are adding metrics so that we can track progress on those objectives. One realization that came out of strategic planning is that SCN exists for both investors and entrepreneurs, which might not be an obvious conclusion regarding an investment network.
Some of our objectives are to:
- Grow the membership. With that comes increased investment capacity; broader range of investor experience and expertise; and expansion across the province.
- Increase the deal flow. This goes hand-in-hand with the previous objective, because investors bring their own networks, which includes entrepreneurs.
- Increase participation by professional service providers. Professional services are vital to the startup ecosystem.
We are looking at several initiatives to achieve our objectives, and we’ll cover that at the AGM in the Spring.
Every leader has some areas they want to focus on during their tenure, what are yours?
My focus is growing the membership and expanding our reach to other centres in the province – of the actions we can take, I think this will have the greatest impact. There are potential investors throughout the province, and SCN can provide them with more and better investment opportunities than they are likely to be able to find themselves.
You have been both an entrepreneur and an investor. How has the role of investor been influenced by your experience as part of a successful business?
Well, certainly it has made me more empathetic! Start-ups have all the problems of small business, but unlike other small businesses their plan is to Change The World! – and that creates an entire truckload of other problems, not the least of which is that people who haven’t been in a startups are likely to think that your startup is simply another small business.
Having done startups, I know how hard it can be. And, how lonely it can be, particularly in a place like Saskatchewan where there aren’t a lot of startup founders to talk with that understand the kinds of challenges you face.
My experience is mostly with high tech start-ups, and people (like me!) don’t go into engineering or computer science because they want to deal with HR and accounting issues. They not only don’t have the answers – often they don’t know the questions! This is one example of why the mentorship angel investors provide is as important, if not more important, than the investment they make. And it’s the reason that coach-ability is one of the key criteria I have when deciding whether or not to invest.
You are going to read about Kijenga and their growth as a start-up in another article. This is a company that worked very hard to show a group of potential investors their value and what the opportunity for investment and mentoring would bring to both sides. I liked their business model and their willingness to learn. Knowing other angels whose judgement I respect had similar impressions made the opportunity appealing.
Having both perspectives, give us your impression of the best and ‘not so best’ aspects of Angel investing in Saskatchewan?
The Best – Altruism and the sense of community. It’s not just ‘what’s in it for me?’ It’s ‘How can we maximize success?’ It’s very Saskatchewan – very practical.
The Not so Best – This is not a startup friendly province. We have an immature startup ecosystem. We are all but invisible to the business community and the public sector. The participants – entrepreneurs, investors and service providers – are learning as they go, and don’t know how to find the entrepreneur/investor/advisor partners they need. SCN is working hard to be a good ‘matchmaker’: bringing these parties together so each has the opportunity to achieve their goals.
As an investor do you have a personal strategy for building your investment portfolio?
With one chance in ten of success with any single startup investment, diversification is critical. I like high tech, but I consider the market potential, the people behind the idea and my general comfort level with the investment. I like having investments with other members – due diligence is shared, as is the risk. So do I have goals? Yes. Do I have a strategy? Yes. But both are pretty fluid.
Final words…angel investing is about taking risks, engaging with people, advising others based on your experience, and sometimes winning financially. It is engaging and personally rewarding; and it is certainly addicting!