Stephen Nairne thinks he’s only cried once since cofounding Raven Indigenous Capital Partners in 2018. It was during the Indigenous-led venture capital firm’s annual retreat for founders, when an elder of the Gwawaenuk First Nation, Chief Robert Joseph, told the group, “I’d never even heard of an Indigenous CEO, and now I’m sitting in a circle with 10 of them.”
“For me, that was the most powerful thing,” recalls Nairne, chief investment officer at Raven.
The Indigenous population is among the fastest growing in Canada and Indigenous businesses contribute $50-billion annually to the country’s GDP. Yet, Indigenous people are underrepresented amongst venture capitalists, along with women, members of the LGBTQ community and racialized individuals.
As part of the 2021 and 2024 budgets, the federal government is moving to remedy this by renewing the Venture Capital Catalyst Initiative (VCCI), which was introduced in 2017, to increase available funds to high-potential innovative firms. These firms invest in new companies to scale their business, taking a percentage of ownership in exchange, and then selling their shares for a profit.
In June, Minister of Small Business Rechie Valdez announced the latest round of VCCI funding, with $25-million dedicated to five inclusive VC firms representing marginalized groups – including Raven Capital.
Raven expects the funding to be deployed this fall and will divide the money amongst their most successful portfolio clients, based on their needs.
Raven Indigenous Capital Partners cofounder Stephen Nairne invests in companies in pre-seed stages and offers support through the growth process.
Indigenous entrepreneurship existed before Canada began, but colonial legacies have long created systemic barriers to socio-economic growth. Access to capital is especially difficult for businesses on reserves since they cannot leverage property as collateral – a legacy of the Indian Act, which prohibits Indigenous people from owning property on reservations.
These factors constituted what Raven general partner Althea Wishloff describes as an “economic and moral imperative” for the company’s founding. The VC firm invests exclusively in Indigenous and Native businesses in Canada and the U.S., with women founders making up over 60 per cent of their portfolio, according to Nairne.
Raven typically takes a seat on the business’ board of directors and has a say in how the money will be deployed. “We succeed together or we fail together,” says Nairne. “We take on the same level of risk as the founders and we tend to work together for five to seven years to build and scale businesses with cultural integrity.”
The firm often invests in companies in pre-seed stages – the initial ideation stage of a business – and offers support through the growth process.
Beyond commercial metrics of success, Raven considers impact and mission-focused benchmarks of companies, such as how many Indigenous people are employed and trained, as well as how communities can benefit from the business.
“One of our investments, for example, is a company called One Feather, which provides digital banking services to people who are living on reserves,” says Nairne. “We’re looking for those business models that will be commercially successful, but also have this impact narrative around advancing the well-being of Indigenous people.”
Raven has allocated the VCCI funding for their Opportunities Fund, which is made up of five or six of the most successful businesses from Raven’s Impact Fund 1, a portfolio of 11 businesses.
Salish Soils, a recycling and organic waste disposal company in Sechelt, B.C., is one such business. Founded in 2010, Salish Soils began receiving funding from Raven in 2023, with an initial investment of $2.5 million. For co-founder and CEO Aaron Joe, the support from Raven has been a game changer. “They share the same values as us, and believe in the model of sustainability, creating employment and enhancing the socio-economics in Indigenous communities,” says Joe.
With a seat on the board of Salish Soils, Raven will have a say in how the money will be managed. Joe says that Raven’s good governance on how to manage the capital has allowed Salish Soils to reach a level of business sophistication they might not have alone. While they are still deciding on how the VCCI funding will be managed, Joe says it will be put towards expanding their processing facility and potentially acquiring a smaller business that could operate under one umbrella.
The company, which operates on the Sechelt First Nation, is devoted to land restoration by recycling organic waste into value-added resources, such as top soil. “Our business is a force for good here on the Sunshine Coast,” says Joe.
“We see entrepreneurship as a pathway to self-determination, sovereignty and to reclamation,” says Nairne. “Because Indigenous people are not suddenly becoming entrepreneurs. They have always been entrepreneurs.”
One in a regular series of stories. To read more, visit our Indigenous Enterprises section. If you have suggestions for future stories, reach out to IE@globeandmail.com