Real Ventures is making its second major leadership change in the last two years with co-founder John Stokes taking over as managing partner from Janet Bannister, BetaKit has learned.
Stokes will assume the position effective today, with the change to be announced later this afternoon at Real Ventures’ AGM. Stokes co-founded Real Ventures in 2010, leading the firm’s investments in companies like Unsplash, Transit App, Dcbel, and Wrk. At Real Ventures, Stokes oversaw the development of the FounderFuel accelerator program and establishment of Real Ventures’ presence in Toronto.
The leadership change comes as Real Ventures has faced difficulty closing a new fund.
According to Real Ventures, Bannister has decided to transition to a part-time partner role “over the coming months.” Bannister told BetaKit that she remains “committed to Real Ventures’ success,” noting that she will work with the firm’s board and limited partners (LPs) to determine how this shift unfolds. Bannister added that she has no plans to leave Real Ventures “any time soon.”
The leadership change comes as the Montréal-based seed-stage venture firm has faced difficulty closing a new fund.
In an interview with BetaKit, Stokes acknowledged that Real Ventures has faced challenges raising its next fund, noting that broader economic factors have played a role. According to Stokes, some prospective LPs have had a few concerns about Real Ventures: its slew of personnel changes in recent years, and the cash-generation performance of its past funds.
After working to secure capital for its next fund since 2019, Stokes confirmed that Real Ventures paused fundraising earlier this spring for the reasons mentioned above. The newly-named managing partner noted that Real Ventures is not actively fundraising, but plans to reinitiate fundraising efforts when they think the timing is right.
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With some of its portfolio companies, such as Clearco, Mejuri, and RenoRun, facing market headwinds, Real Ventures’ overall fund performance has not been as strong as hoped. However, Stokes highlighted the firm’s $89 million 2014 fund, calling it “a major outlier performer in terms of value created,” generating close to 5x multiples on the firm’s original investments. However, that fund has not delivered as many exits as some its LPs would like, Stokes added.
Despite this, Stokes says he isn’t worried about Real Ventures’ fund performance. “We do feel confident the time will show the quality of the overall portfolio,” said Stokes.
Real Ventures last closed a fund in 2017, when it raised $181 million across two funds, including a $150 million pan-Canadian seed fund and $31 million to back early-stage startups in Québec. The firm has finished making new investments out of both funds, and according to Stokes, their performance so far is on-par with expectations, but because these funds are much younger, there are more limited expectations on them right now cash generation-wise.
“The fact that we have not yet closed a fund gave me the opportunity to reflect on how I would like to have impact over the next 10 to 15 years.”
– Janet Bannister
Real Ventures is a key player in Québec, where it has helped to build out the province’s early-stage tech ecosystem. Founded in 2007, Real Ventures has raised five funds in its lifetime, with $320 million raised across its four active funds—having fully exited its 2007 fund—that oversee more than 60 portfolio companies. The firm has made early-stage investments in startups like Paper, Mejuri, Sonder, Vention, League, BenchSci, Xanadu, Tenstorrent, and RenoRun.
Sources with knowledge of the firm have indicated to BetaKit that the performance of Real Ventures’ past funds, as well as Bannister being based outside of Québec, has been looked upon unfavourably by some of the firm’s LPs, many of whom are from the province.
When asked by BetaKit if that was the case, Bannister had this to say: “I enjoyed the fundraising process and interacting with potential LPs. The fact that we have not yet closed a fund gave me the opportunity to reflect on how I would like to have impact over the next 10 to 15 years.”
Multiple individuals from the Canadian tech ecosystem had also previously speculated to BetaKit about an extended summer holiday that Bannister took this summer, and whether that was related to Real Ventures’ struggles.
Stokes pushed away those ideas, and noted that the holiday was part of a standard eight-week program Real Ventures offers to long-time employees.
Stokes said that the firm is happy with the work Bannister has done in building Real Ventures to date.
“As Managing Partner, Janet has done a wonderful job raising the profile of Real Ventures and demonstrating all that we stand for in terms of commitment to founders, investors, and the Canadian startup ecosystem,” said Stokes.
Bannister took on the role of managing partner in 2020, having been with Real Ventures as an investor since 2014. She is the founder of online marketplace Kijiji, and had previously served in roles at eBay, Procter & Gamble (P&G), and McKinsey & Co.
According to Stokes, there will not be any changes to Real Ventures’ core investment strategy or approach associated with this personnel move, noting that there will be “very little difference” between him and Bannister in the managing partner role.
However, the leadership change and the fact that Real Ventures has paused its fundraising efforts bring into question the future of the firm.
With files from Charles Mandel and Meagan Simpson.
Feature image courtesy Real Ventures.