John Risley, President, Clearwater Seafoods Ltd., at his retail store in Bedford, Nova Scotia, June 1, 2012.Paul Darrow/The Globe and Mail
Entrepreneur John Risley laid out a challenge to the Canadian private markets community Monday, urging those at the industry's annual conference to find ways to get more capital to Canadian startups.
Mr. Risley, in a very forthright keynote speech at the 2014 Private Capital Markets Association conference in Toronto, called on Canadian lenders and investors to ensure that more Canadian companies can access the private funding they need to stay in this country, rather than having to look to U.S. investors. In his experience with companies ranging from seafood to biofuel to cable, he said, most funding in private markets still originates outside the country.
He argued that Canadian lenders won't take as much risk, and said that, too often, equity investors are generalists with not enough sector-specific expertise.
It's a business that requires investors to "trust their guts," Mr. Risley said, and too few people in this country will do that. Instead, they insist on business plans and return on investment estimates that he called bogus (actually, he used another word starting with "b," one that shares the same meaning.)
Mr. Risley also urged private investors to be more willing to mentor the companies in which they invest, and to spend more time helping chief executives solve problems – something he called a key part of being an investor. In the U.S., he said, that is more common.
Attendees at the conference reported a much more upbeat tone this year than in the past, sparked by a sense that private capital markets are getting more attention, and that this year they are working with regulators who are more engaged in the work of encouraging and improving private markets.
The event also saw the presentation of the 2014 deals of the year awards for private capital markets. The full list of winners can be found here.