Real Ventures: Partner Janet Bannister

Can you tell me a bit about yourself?

My name is Janet Bannister and I am a Partner with Real Ventures. Real Ventures is an early-stage venture capital firm that invests in Canadian-based early stage technology companies.

How did you get involved with Real Ventures? Why did you choose to go into early-stage ventures?

Real Ventures actually found me when they were looking for a partner for the Toronto/Waterloo area! Venture capital was not something that I ever considered going into or that I actively pursued. It just sort of happened — they were looking for a partner who had entrepreneurial experience, spent time in Silicon Valley, and understood the ecosystem there.

And so, they were looking for someone who had similar values and ways of thinking. So that’s how it happened — quite frankly, I got a cold call from one of founding partners of Real Ventures.

How does one typically get into venture capital?

The best background to get into venture capital is to have entrepreneurial and operating experience. This way, you can relate to the entrepreneurs, give relevant feedback, have empathy and understanding for what they're going through, help them through the challenges that they face, and add value and give good perspective.

What do you do at Real Ventures?

There’s two main buckets that account for the majority of my time. One is working with portfolio companies. The other is meeting potential investments, understanding their business, and deciding whether or not you should make an investment in that company.

To be successful in both buckets, you need empathy. You need the ability to relate to people, understand them, and communicate well. The second skill is just having good strategic thinking skills. As I said, it’s so important to have an operating background, so that you can relate to what your entrepreneurs are going through and understand the potential pitfalls that they might encounter.

If you weren’t interested in VC before, how did Real Ventures pitch themselves to you?

They just told me a little bit about the role and what venture capital was all about! I think the thing that interested me is that, two and a half years ago, that stage of my life was different than it is now. I was most interested in working in an advisory or consulting type of role rather than an operating role.

After having a little bit of operating success, I learned that I actually get far more excited about helping other people be successful. I enjoy meeting people, providing them with feedback or advice or guidance or contacts, or anything else that helps them be successful. That is the greatest reward for me.

So that was one reason why I joined Real. The other part was working with entrepreneurs. In the past, I’d done consulting with McKinsey as well as with my own consulting firm, and most of that consulting was with larger companies. But I realized I particularly enjoyed giving that guidance to entrepreneurs who are nimble, fast-moving, pursuing their dreams, and putting it all on the line.

And so when I realized that venture capital enabled me to combine both that mentoring, advising, and consulting type of work along with interacting with entrepreneurs everyday, I thought “oh, this is going to be fantastic. I would love to do this.”

You mentioned earlier that where you are now is very different from where you were two years ago. How do you think you’ve grown since joining Real Ventures?

I really love my work. I've never been happier in my career. I feel so lucky to get to do the work that I do. I've definitely learned a lot in the past two and a half years of being a venture capitalist.

I would put the experience into buckets. One is just the operational part of being an investor, going through things like term sheets, legal documents, discussing the pros and cons of doing an equity round versus a convertible. Or explaining what a convertible is, what a safe is, how it all works and assessing the landscape, what's a seed, what's a Series A. So there's that technical stuff which I've learned.

What is it like to oversee 14 startups?

I think the bigger thing is that you learn so much from the companies you oversee. Right now, I oversee 14 different companies. I’m a board member for 8 companies, but I’m the Real Ventures point person for 14. As a whole, Real Ventures has 65 active portfolio companies.

So you really learn from all of those portfolio companies. You get to assess what all the different obstacles and common challenges are. And this learning is different from a operating role! Because when you’re working in one company, you learn how to get things done, you’re in depth, you're 100% focused on that company, and it's a great experience.

How is the learning different from a solo operating role to a venture capitalist role?

When you work in venture capital or private equity, you have a purview over dozens of companies. Your learning is at a higher level and more broad. And so here, you learn through pattern recognition.

One of the things that is certainly loud and clear that people might not recognize if they’re in one company, is that it’s a tough road for every single company. There's no straight line success — it’s always challenging. Every company goes through challenges, every CEO has self-doubt.

And I think a lot of people see successful startup companies from the outside and think, “oh it was just a straight line.” They assume that someone just did a thing and were successful, and when they try to copy that success, they struggling, things aren't working very well, their customers aren't buying, and then they get frustrated.

But the reality is, everybody struggles. Everybody faces challenges in starting and running and scaling a business. It’s just a matter of understanding and working with our CEOs to understand “hey you know what, it's okay, you're gonna get through this.” And we give them strategies, tactics, or ideas that have been helpful for founders in the past.

What is a typical day like?

Mondays are our partner investment meetings, so we spend half the day meeting potential new investments, reviewing existing companies, things like that.

But on a typical week, a third of my time is spent with our existing portfolio companies.

Another third is spent looking at potential investments, which includes speaking at panels, going to accelerators such as DMZ or Creative Destruction Lab, and generally just meeting people in the community.

And then the last third of my time is spent working on Real Ventures. Real Ventures in itself is a firm, so I work with my other partners and other people at the firm, and we think about “OK, how are we going to build Real Ventures?” Because through all of this, we're building Real Ventures too, so we’re thinking about our strategy going forward, where do we want to focus our investing time, how can we help other people in the firm with what they're doing, etc.

What do you look for when you’re deciding which companies to invest in? Is it a strong founder duo, a good story, strong financials, etc? Or is there a certain x-factor that you can detect?

I don’t know if there’s a x-factor, but at a high level there’s two things we look at.

One is the vision and the strategy. What is this business doing? What's the vision of the founder? And then from there, there’s a whole bunch of other factors. But the fundamental question is: do we think this can be a huge successful business? So that means looking at the competitive dynamics, the go-to-market plan, and those type of business elements.

Then the second question is: do we believe this is a team that can execute? That involves looking at the team and seeing who they are going to hire. For team, we have to ask ourselves: is this the right team? Is the CEO someone who can lead the company to success? Recognizing as I said before, this person will probably have to learn and grow. And if it’s their first time as a founder, then they need to surround themselves with more experienced hires. But again, the fundamental question is: do they have the drive to hustle and build this company to be very successful?

There’s a stereotype that venture capitalists are cutthroat. Has that been true in your own experience?

You know, that’s what I thought before, and that was part of my hesitation to get into the industry. But in my experience, I’ve found that it's the opposite. I mean, occasionally they can be that, but at the end of the day, the best companies are competitive with venture capital. So in order to be successful as a venture capitalist, you need to be somebody who entrepreneurs want to work with.

And entrepreneurs talk. Everyone talks to each other. And everyone has a reputation.

If you’re a venture capitalist who treats entrepreneurs badly, you're quickly going to be in a position where entrepreneurs don't want to work with you. And you're not going to be successful. So I think people recognize that they need to treat their entrepreneurs well.

What would you say your reputation is?

That's a good question. I think I have a good reputation. Maybe I should let Stephanie [my assistant] answer that this one, but I think I have a good reputation. I think I have the reputation of being approachable. People know that I'm looking out for the best interests of my entrepreneurs and I actively want to add value and help my portfolio companies.

I’ve heard you say that Toronto isn't the next Silicon Valley of Canada — you think Toronto is its own entity. Can you speak more about that? What are the differences between the Toronto tech community and the San Francisco tech community?

Yes, absolutely. There’s a whole bunch of differences between Toronto and Silicon Valley.

In the Valley, there's a whole culture of entrepreneurialism. When I first moved to the Valley, one of the things that struck me was whenever someone was like leaving their job or getting back in the workforce, the first question people would ask was "oh are you starting your own thing?" Or "are you going to join a startup?"

At the time, I just thought this was so odd. Because I came from Toronto and nobody ever asked "oh you're starting your own business?” It was always “are you going to go into marketing? Finance? Strategy?”

How has the Canadian tech landscape changed?

There’s been a cultural shift in Canada as a whole. Now, starting a business or joining a startup has become a more "acceptable" career path for people.

One great thing about Canada — whether it's Montreal, Toronto, Vancouver, or any of those ecosystems — is that all the entrepreneurs, startups, and venture capitalists are really working hard together. It's almost like we know we’re the underdog, so we need to work together. We need to work as a group and make Canada whole.

So in many ways, it feels like we’re all on Team Canada and we want to help each other be successful. Whereas in the Valley, there’s more of a feeling that everybody is out for themselves. In Toronto, it’s a bit more "hey we want to work together and make Canada a great place to build businesses."

One the biggest benefits of the Valley is their networks effect. Do you think Canada has that?

If you look at the data there's absolutely a positive cyclical effect that helps build ecosystems, so that the strong tech ecosystems get even stronger.

And again, if you look at Canada on a worldwide basis — Toronto, Waterloo, Vancouver — it’s obviously not as big a system as Silicon Valley or London England, but it is growing quickly. There's a lot of great momentum here.

Let’s rewind to the beginning of your story. Before Kijiji, eBay, or McKinsey, you were in the Honors Business Administration program at Ivey. What was that experience like for you? What skills did you learn in Ivey?

The best part was the friends that I made. I loved going to Ivey. Sometimes in life, it's hard to quantify or identify “oh what did I specifically learn from each experience.” But you know what, I made great friends at Ivey who have have remained great friends. And that to me is a huge thing.

And yes, I did learn a lot from the courses. I learned a lot about accounting and management 101, and all that good stuff. But my personal philosophy is that the soft skills are more important than the hard skills. I still remember my 48 hour reports, working as a team, and making great friends who are still friends today.

The last time you visited Ivey, it was at our annual Leadership Forum. To continue that conversation, what does leadership mean to you? How can you discern if someone is a leader?

First of all, I think leadership is a learned trait. I don't think it’s something you're born with. And so there's all sorts of different types of leaders. Some leaders are quiet and introverted, others are loud and gregarious, some are very “big picture,” and other people are detail-oriented and focused on execution.

I think the key thing for leaders is to understand. To really understand themselves and self reflect and say “OK, here are the areas that I'm good at” and “here are the areas where I'm not so good at” and then surround themselves with people who compliment them.

In general, a big problem I’ve encountered is that some people will say “oh I'm strong here, but I'm weak there, therefore I need to focus all my energy on my weaknesses.” However if you do that then you'll just end up mediocre in everything! Obviously, don’t let your weak area become a deficit. But it's a much better strategy to really focus on making one area super good.

At McKinsey, we used to call it being spiky. Meaning that hey, you gotta be really good in something. And yes, you can't have a liability in the other area. But the main idea is to double down where you're strong and be known for that strength, and then make sure that you compensate for the weaknesses in another way, whether that’s hiring more people or surrounding yourself with complementary skills. But never just say “oh I’m naturally strong at this skill, therefore I'm not going to work on it” and go and work on your weaknesses instead.

It’s like, hey, if you’re naturally an endurance runner then great, go be an endurance runner. Don't try to work on your speed. And if you're naturally super fast then that's great, go and be a sprinter! But don't be an endurance runner, unless you are passionate about being the other thing. Do compensate for your weaker areas so they don’t become deficits, but spend your time being spiky at something.

What advice do you have for young people graduating university today?

Whatever you chose to do following graduation, make sure you are following your passion and your heart. Your career will be a big part of your life, so it is important to pursue the things you are good at and the things you want to explore. There will be times where you might face obstacles in jobs, but find the elements that you like about it, focus on those things, and learn from each experience.