The National Angel Capital Organization (NACO) has found its new leader after former CEO, Yuri Navarro, announced he was stepping down in December. Claudio Rojas, who has played the role of founder, managing director, board member, and advisor to a number of prominent Canadian organizations, will now take on the title of NACO’s CEO.
BetaKit spoke with Rojas on Friday in an exclusive interview to talk about bringing a founder-centric approach to NACO, the state of angel investing in Canada, and his plans to support a tech ecosystem he says is struggling to evolve from startup to scale-up.
Making magic for entrepreneurs
Rojas stated that he plans to continue to scale an organization that has become the only national industry associations for angel investors in Canada. Founded in 2002, NACO already represents more than 40 networks, comprising 3,000 angels investors.
“There’s a tremendous amount of support from all levels of government, corporate, VC’s, [and] angels. Everyone wants to see some magic happen for Canadian entrepreneurs.”
– Claudio Rojas
When BetaKit first reported that Navarro was stepping down from his role after close to seven years with NACO, he said that he felt the scale of the organization had become a management challenge rather than a growth challenge. He hoped to see someone come in that could have more of a focus on that building process.
“Right now the innovation ecosystem is at an inflection point, there’s a tremendous amount of support from all levels of government, corporate, VC’s, [and] angels,” Rojas said. “Everyone wants to see some magic happen for Canadian entrepreneurs. So I think it’s just really scaling that up, it’s accelerating the pace of growth of our ecosystem.”
When Navarro announced he was leaving, he also expressed to BetaKit that the next step for NACO was to better leverage its existing datasets to support its policy network, and expand its network across Canada, Latin America, and Europe.
Rojas said those initiatives are still all in the works, but pointed to two of his own initiatives that he hopes to emphasize, including the organization’s regional inclusion.
“What I find inspiring with NACO is that they’re a national organization that has relationships all across the country. They really are regionally inclusive so I’d like to continue that work,” he stated, pointing to a recent economic mission he went on with NACO to the Yukon, helping facilitate talks around advancing their ecosystem.
The new CEO expressed that he would like to see NACO have a truly national footprint with offices across the country, helping to accelerate the pace of collaboration between all its regional centres.
Rojas’ second area of focus is to use the organization’s national resources to further develop its women in entrepreneurship strategy. In May of last year, NACO worked with the newly re-launched Female Funders program to develop an education plan for women who participated in the Female Funders Angel Academy program.
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“Canada is producing amazing female founders, and we have amazing programs focused on female founders,” he stated. “But if you look at the largest companies in the world, that’s where when they’re significantly underrepresented and I think that there’s an opportunity for Canada to produce a wave of unicorn founders that happen to be women.”
Under Rojas’ leadership, the group is looking beyond Canada, into markets like Latin America and Europe, hoping to create a global network, as well as connections for angel investors and their portfolios. Rojas noted that a number of international angel investors and networks have reached out to NACO looking to replicate its model.
He sees NACO as uniquely situated to create this type of national and global network and use its model of educating the ecosystem about the opportunities of angel investing, to build an international network.
Founder-centric angel investing
When asked how this opportunity for him to lead the national angel organization came about, Rojas pointed to his long-standing relationship with NACO, from speaking at NACO World Angel Investment Summit in Montreal, in 2017, as well as speaking at NACO’s conference in Toronto last year. He also noted that many of NACO’s board members are also advisors to the Canadian Dream Summit, which Rojas founded in 2017.
“I’ve always thought very well of where NACO fits within the ecosystem and I love what Yuri has been able to develop, so it was a natural fit,” said Rojas. “And when Yuri [was] announcing he was moving on, the opportunity was mentioned to me. It just seemed like…it fits very well with my passions around helping Canada to transform into the world’s leading innovation economy, which is [an] ambitious statement, but NACO is ideally situated to help bring that to reality.”
“If you look at the largest companies in the world, many of them are run by founders.”
Prior to joining NACO, Rojas spent ten years as the managing director of Hurt Capital. Hurt is a founder-centric investment and venture capital platform, leveraging research and theory around equity ownership structures to help empower founder-run companies.
Rojas told BetaKit that he sees NACO and angel investors playing a role in empowering those founders, helping entrepreneurs reduce the friction of raising capital by being able to unlock it at early stages. This he argued, gives entrepreneurs greater access to resources early on, that can then help those companies scale.
“If you look at the largest companies in the world, many of them are run by founders. And that’s not an accident. There’s something very special when you have someone that has lived and breathed the company from the beginning, and brings with them a vision that’s more than just economic,” he stated.
He pointed to many of Canada’s best known success stories as being founder-led, from BlackBerry to Canada tech-darling Shopify, which made history earlier this year after hitting the $1 billion revenue mark faster than any other Canadian SaaS company, as well as Lightspeed, which recently IPO’d on the TSX.
“These were all founder-controlled companies and the magic of founder-controlled companies is that when a founder is able to minimize the level of dilution in the early stages of capital (when the frictions of raising Capital are low), the founders are in a better position to maintain control over the vision of the company,” he stated.
The implications that founder-centric companies have for the greater Canadian tech ecosystem is that those types of companies tend to stay loyal to their hometowns, Rojas noted. This, he argued, has been, and can be, a great asset to local communities to help build successful tech ecosystems.
Angel investing in Canada
When it comes to companies raising money, venture capital investments are more often seen as the most prominent way to source capital. But Canada is also home to a number of angel investors and their networks. However, angel investing is not well understood, Rojas argued.
“There’s a huge pay-it-forward sentiment within the angel community.”
Earlier this year, prominent Atlantic Canada angel network, First Angel Network Association (FAN), shut down after a 14-year stint. FAN had been strongly criticized in the past for some of its practices, with some arguing that it was taking advantage of Atlantic Canada entrepreneurs.
When asked about his thoughts on the broader Canadian angel ecosystem, Rojas demurred, he said he prefers to focus on NACO, calling it the only national organization that has helped the broader Canadian angel ecosystem, and early-stage ecosystems advance. He called the organization likely one of the most robust and sophisticated angel networks in the world.
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As Rojas pointed out, angel investors are typically entrepreneurs themselves, meaning they are often well-connected, with a higher tolerance for risk, and are therefore more likely to support early-stage companies.
“Angel investors are individuals that have achieved really great things in their career, quite often they are former entrepreneurs and they want to give back to the community,” Rojas stated. “They’re very much like VCs, but really focused on something that’s more than just economic return. There’s a huge pay-it-forward sentiment within the angel community and what angels bring to the table is essentially both capital and the mentorship to help companies scale and get through the difficult challenges of building a company.”
Image courtesy NACO