Two Small Fish Ventures, a Toronto-based early-stage investment firm led by former Wattpad executive Eva Lau, has closed an initial $9 million CAD for its second fund. The target goal for the fund is $15 million.
“Our only intention here at Two Small Fish Ventures is to support other entrepreneurs in their quest to build a massive Internet company through our collective knowledge.”
Fund II marks the first venture fund for Two Small Fish Ventures, which launched in 2014 as an angel investment firm. The limited partners for Fund II include Canso Investment Counsel, Wealthsimple’s Michael Katchen, Red Hat’s Bob Young, and former CEO of Wind Mobile Anthony Lacavera. According to The Globe and Mail, Fund II will cut cheques between $50,000 and $500,000 for early-stage Internet startups aiming to achieve what Lau called in a blog post “network effects.” She said having a network effect means increasing product value by increasing user base.
“My goal is not to simply share capital with the companies we invest in, but rather to provide access to our mini-ecosystem of like-minded, entrepreneurial people who are recycling their invaluable expertise into the next generation of business,” Lau wrote. “Our only intention here at Two Small Fish Ventures is to support other entrepreneurs in their quest to build a massive Internet company through our collective knowledge, opening up our networks and nurturing these small fish into big whales.”
Since it was founded in 2014, Two Small Fish Ventures and has invested in 22 companies through angel investments ranging from $20,000 to $50,000. Lau’s husband, CEO and co-founder of Wattpad, Allen Lau, serves as an adviser and investor in the fund. It has previously invested in Drop, Zoom.ai, Jiffy, and Wondeur. One of the startups the first fund invested in was Winnipeg-based SkipTheDishes, which was later acquired by UK-based Just Eat for $110 million.
Lau served as a head of community and content at Wattpad, a Toronto-based company that has created an online community for readers and writers in the tens of millions. Recently, Wattpad has made significant moves in its international markets, announcing a partnership and strategic investment with Times Bridge and Sony Pictures.
Prior to Wattpad, Lau was the director of product development of accelerator Brightspark Labs, where she mentored various Toronto-based tech startups.
“As Wattpad was growing over the years, I was very lucky to have a hand in growing tens of thousands of users into tens of millions of users,” Lau wrote in a blog post. “I have a wealth of unique experience, which is exactly why I have been aiming to get involved and help the Canadian tech economy grow with Two Small Fish Ventures.”
Lau said she wants to enable more Canadian entrepreneurs to create successful companies by sharing the knowledge she gained from engineering Wattpad’s network effect. Many of the new fund’s backers are creators of some of Canada’s biggest startups and scaleups. Lau calls this Two Small Fish Ventures’ Creator Circle, which includes the likes of Borrowell’s Andrew Graham, Instacart’s Karney Li, and Shopify’s Farhan Thawar.
Lau is one of a small, yet growing number of women-led VC investment firms in Canada. A recent report from the Female Funders and Highline Beta found that women account for only 15 percent of partners at Canadian VC firms. The same report found that the VC dollars invested in Canada in 2018 by women-led funds decreased, with 85 percent of all LP dollars invested being in funds with no women managing partners.
Lau said she is currently working towards a closing a second round of financing for Fund II and looks forward to working with entrepreneurs to help build a booming tech ecosystem for Canada.
Image courtesy Two Small Fish Ventures