Toronto-based Northleaf Capital Partners has added noted Canadian tech entrepreneur and investor Michael Hyatt as senior advisor to the firm’s venture capital (VC) and growth equity program.
In the newly created role, Hyatt will help the Northleaf private equity (PE) and VC teams source and evaluate investment opportunities.
Hyatt’s relationship with Northleaf dates back over a decade to BlueCat.
In an exclusive interview with BetaKit, Hyatt said that he plans to bring “an operator’s lens” to Northleaf’s investments, adding that he was thrilled to join the firm given their “alignment … on people and returns.”
Hyatt’s relationship with Northleaf dates back over a decade. The firm has backed Hyatt’s past ventures like BlueCat Networks (which sold for $400 million USD), invested alongside him in companies like Bolt Logistics, and sought his advice on a number of different deals.
“Michael has been great on some recent deals that we did, playing this sort of informal advisor role, and it just felt like it was the right time to formalize this relationship,” Northleaf managing director and venture partner Ian Carew told BetaKit.
Northleaf is a global private markets investment firm that manages over $19 billion USD in PE, VC, private credit, and infrastructure commitments from public, corporate and multi-employer pension plans, endowments, foundations, financial institutions, and family offices. The firm typically focuses on mid-market companies and assets.
“I believe that Northleaf has probably one of the most trusted investor brands in the country,” said Hyatt. “They have stellar returns, incredibly strong investment teams, and they’re very well thought of by both entrepreneurs and the other venture capitalists who they’ve invested in over the past decades.”
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Hyatt has built a reputation as both a successful tech entrepreneur and a Canadian tech investor. In 2001, Hyatt co-founded Toronto-based BlueCat, which allows companies to centralize and automate DNS services, and was later acquired by American private equity giant Madison Dearborn Partners in 2017.
Since then, Hyatt has been an active angel investor, backing a list of companies that range from talent intelligence startup Ideal, which was acquired by Ceridian last year, to Series B-stage fulfillment and logistics startup Bolt, and seed-stage proptech firm Enso Connect.
“When they went out to look for someone to be a senior advisor in venture, I was pretty thrilled to do it, because I know the kind of ethos of the firm and the people, but I also know about their exceptional returns to investors,” said Hyatt.
Hyatt added that he is “not trying to bring a venture capitalist lens to the program.”
After spending “the past decade in the trenches as an operator,” Hyatt said he thinks more from an operator’s perspective than an investor’s perspective. According to Hyatt, “great companies take great people, great timing, a bit of luck, capital, and a lot of focus.”
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“Michael was a perfect fit with his operating and entrepreneurial background that provides a very different lens on deals than we would have from our own internal perspective,” said Carew.
Carew added that Northleaf has found it “very helpful” to have Hyatt come in, ask questions, and round out the firm’s diligence process.
Hyatt hopes to help Northleaf build “long, meaningful, sustainable relationships with entrepreneurs.”
Northleaf first launched its dedicated Canadian VC program in 2008, with the launch of the Ontario government-sponsored Ontario Venture Capital Fund. Today, Carew said the firm oversees about $800 million USD in dedicated venture capital. According to Carew, Northleaf focuses approximately three-quarters of its investments on other funds, and allocates a quarter towards direct investing.
To date, Northleaf has invested in funds from Inovia Capital, StandUp Ventures, Georgian Partners, Garage Capital, Information Venture Partners, Golden Ventures, and Version One Ventures, through its $300 million USD VCCI-backed Venture Catalyst Fund II.
Northleaf has also completed approximately 30 direct venture capital investments. The firm has backed Canadian tech companies like Bolt, BenchSci, Ecobee, Freshbooks, Shopify, Verafin, Wattpad, and Zymeworks.
Amid an increasingly competitive VC landscape, Carew claims that part of what differentiates Northleaf from other players in the space is its “broad toolkit” and flexibility.
“Depending on the specific deal situation, we can leverage a number of our programs,” said Carew. “I think part of our success historically has been having that flexibility both in terms of capital, size of deal, as well as the way we sort of are able to intersect these deals and get on the cap table.”
One of the ways Northleaf does so is through its dedicated secondary funds. “That’s been an interesting, I think, differentiator in terms of how we’ve been able to build our track record,” said Carew.
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Northleaf typically looks to serve as a syndicate partner and co-invest. However, Carew said the firm does aim to get in “a bit earlier” than other VCs through both its flexible cheque sizes and the relationships it has built over the years.
Hyatt joins Northleaf during what he describes as “a really exciting time to be investing.”
Carew added that there is “incredible depth in the [Canadian tech] ecosystem today versus five to 10 years ago.”
In this environment, Hyatt sees opportunities for Northleaf’s VC and growth equity program in three key areas: direct investments, secondary buyouts, and co-investing alongside other big VCs.
Feature image courtesy Michael Hyatt