After it was reported a few weeks ago that Extreme Venture Partners could be shuttering operations, Toronto-based venture capital fund iGan Partners reached out to BetaKit to explain that Toronto entrepreneurs need not worry.
Founded in 2010, iGan Partners typically makes post-seed and series A investments of between one and five million dollars. They may not be dedicated to seed-stage companies, and they may not get all the attention of other firms like Rho Canada Ventures, iNovia Capital and Real Ventures, but iGan is a dedicated Canadian firm.
Lucky for startups located in the Greater Toronto Area, iGan’s unofficial motto seems to be investing in the Toronto ecosystem. “We’re pretty positive about this entire region overall and how things are coming up in the Toronto area, and we think this is going to be the next big tech hub globally,” said iGan associate Kuljeev Singh.
Sam Ifergan, who possesses more than 15 years experience as an entrepreneur, started the firm three years ago. Ifergan joined partners Geoff Matus, Michael Stein, Adrian Meyer and Michael Aron, with each partner pooling their own capital.
The firm doesn’t run by a traditional VC model, something Singh believes is “broken”. This is where a fund usually lasts about three to five years with a specific amount of investments that must be done.
“With our model we don’t have that pressure,” said Singh. “We’re investing all year round, we don’t have a three-year window that we’re supposed to invest in, and we only look for companies where we can add significant strategic value as well as companies that we think will do exceptionally well without the pressure of LPs.”
Singh said the firm prefers to act as the lead investor for a deal, investing between 20 to 30 percent of the total round while bringing in other affiliated angels, VC firms or high net-worth individuals in their network. iGan does the due diligence, and the network of investors, who otherwise may be too busy to engage in deal flow, can trust the firm.
Furthermore, added Singh, the firm takes a serious approach to active involvements in the companies that it invests money in. Members of iGan have even come in as interim CFO or CEO for portfolio companies.
Largely though, its an effort to be there for the entrepreneurs rather than solely provide money. “Typically with this model we’ve taken a very deep operational role in the companies,” Singh told BetaKit. “Companies look for a lot more than just writing a cheque, and thus far the model has worked pretty well.”
It’s technical expertise, operational expertise and having the right people to surround the companies with. “Those things add a lot to what the companies look for today,” said Singh.
Thus far iGan has invested in six companies and the firm focuses on business-to-business enterprise software companies and other Internet startups, medical devices and healthcare IT companies.
Some of the portfolio companies include Flipgive, is a highly innovative digital marketing platform that connects merchants to consumers, through community fundraisers; Quandl is a revolutionary search engine that makes numerical data easy to find and easy to use; and MoneyKey, an online based cash advance service that provides simplified and convenient online short-term, small dollar loans.
In the future iGan wants to ramp up their activity, ideally investing in four to eight companies a year. They’re even currently toying with the idea of raising a fund, but Singh said the topic remains an ongoing discussion with nothing yet decided.
Nevertheless, iGan’s president Ifergan made it clear in a recent blog post that the firm is betting on its home town for high-potential investments. He said a combination of government support, university programs devoted to entrepreneurship, an influx of immigrants into the area and reasonable valuations has made the city a shining beacon for investment opportunities.
“Toronto has a great ecosystem for building young companies,” wrote Ifergan. “The local initiatives have gotten attention from investors and entrepreneurs globally and with a bit of further help, the start up culture can become entrenched in Toronto with the supporting ecosystem to build world class companies.”
