An Interview with Bob Chaworth-Musters, Founder of the Angel Forum – Vancouver
Bob Chaworth-Musters founded in 1997 the Angel Forum, which is now the oldest Angel group in Canada and is held semi-annually in Vancouver. He is also a founding member and the BC Board Director of Canada’s National Angel Organization (NAO). Prior to that Bob was with CIBC - a major Canadian financial institution with executive responsibilities ranging from corporate and investment banking to private banking in Vancouver, London, England and Bahrain in the Middle East. He also was involved with a seed venture capital fund and a pre-shipment finance fund with the B.C. Trade Development Corp and a discretionary investment management firm for private investors. Bob has lectured on investment funds and advised mid-sized companies, financial institutions and commercial crown corporations. For the past 8 years he has been involved with an electricity and natural gas trading company. He was a Charter Student at Simon Fraser University, earning a B.A in Economics and Commerce and later a M.Sc. in Business Administration from Boston University.
Yaron Bazaz: Hi Bob, How did you find yourself involved with early stage venture capital activities?
Bob Chaworth-Musters: “I was working with a BC Trade Development company where I was involved with a seed venture capital fund and a pre-shipment finance fund. The Company was closed down and I persuaded BDC to become a joint venture partner in the Angel Forum.”
Y.B: In 1997 you founded ‘The Angel Forum – Vancouver’ - now the oldest and largest angel group in Canada. What market pain you identified at the time that motivated you to found The Angel Forum?
Bob Chaworth-Musters: “At BC Trade I was coming across a lot of companies that were too small for institutional venture capital funds and too big for love money. There was no available solution to the problem.”
Y.B: Tell us about the Angel Forum
Bob Chaworth-Musters: “The Angel Forum - Vancouver semi-annually introduces emerging companies to private equity investors. As one of the oldest & largest angel groups in Canada with 100+ investors, its sponsors include leading organizations in BC such as BDC-Venture Capital, PricewaterhouseCoopers, Fasken Martineau and TSX Venture Exchange. Its primary objective is to facilitate investment in emerging companies and presenting companies have raised over $24 million directly through the Forum. Since 1998, Investor Ready seminars for entrepreneurs have been available and now Investor workshops are offered.
Usually 30+ pre-screened technology, service and industrial companies currently seeking equity funding of up to $1.5 million formally present their investment opportunities and exhibit their products to 80+ pre-screened investors in one day. The Forum is a private meeting exclusive only to pre-registered companies and registered investors. 70 to 90 serious investors usually register and are pre-screened to ensure they are attending solely to consider investing in the presenting companies. Majority are individual angel investors from Vancouver, then Victoria, Calgary, Seattle, Oregon, with most early and mid stage venture capital funds in Vancouver also represent.”
Y.B: What can you tell about the Angel Forum successes during the years?
Bob Chaworth-Musters: “Generally about 50% of the companies get funding after the Angel Forum - but not all directly form the Angel Forum. Some recent direct successes include:
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Y.B: What is the secret? Can you donate some tips for other angel forums managers?
Bob Chaworth-Musters: “Focus on quality and fairly valued companies, keep the service providers out and constantly improve.”
Y.B: Bob, you are a founding member and the BC Board Director of Canada’s National Angel Organization. What are NAO’s objectives?
Bob Chaworth-Musters: “The National Angel Organization (NAO) is the national voice of Angel investors dedicated to promoting best practices and public policy advocacy in relation to innovation and early-stage capital formation in Canada. The NAO’s objective is to increase the quantity, quality, and success of Angel investments, thus creating a greater pool of capital for innovative start-up companies.”
Insights
Y.B: What do you believe are the particular Strengths of the B.C technology industry?
Bob Chaworth-Musters: “The depth of technical domain knowledge in Wireless, Software, Fuel Cells and Life Science. Plus the 30% investment rebate by the Provincial government. Also perhaps the lack of head office well paying jobs forces people to become entrepreneurial.”
Y.B: Western Canada enjoying an economic boom during the last years. Nevertheless, most of the capital invested in Western Canada channeled to the Real Estate, Mining and Energy sectors. Can the local technology industry flourish in this climate?
Bob Chaworth-Musters: “There is a shortage of technology angel investors as the returns from Real Estate, Mining and Energy have been too attractive. We need more successful Canadian business people to become Angel investors and help Canadian entrepreneurs. And for mainstream Canadians to allocate a part of their RSPs and other investments to back entrepreneurs they likely all ready know.”
Tips
Y.B: Any tips for entrepreneurs seeking for Angel investments?
Bob Chaworth-Musters: “Build a business not a technology. Determine the need for your product, the value added or saved and the payback period to cover the sales price of your product. Determine if you are investor centered or life-style centered. Are you willing to partner and are you coachable? Seek a win-win for the investor and your company – don’t be greedy - get the valuation right and don’t go public too soon.”
Y.B: Any tips for investors seeking early stage investments?
Bob Chaworth-Musters: “Work through a group of like-minded investors where you share the due diligence and the problems. Diversify your investing over 5-10-15 investments as 60% will fail.”
Y.B: Out of office, what are your preferred leisure time activities?
Bob Chaworth-Musters: “Outside of work, I’m an annual backpacker on week-long trips through BC’s coastal mountains and have now transitioned to week-long off-road biking through southern BC. In the winter I’m a regular skier at Whistler Blackcomb. For my next overseas trip I’m planning to retrace an 1860 exploration of Patagonia.”
Y.B: Thanks a lot Bob for your time and all the best.
Bob Chaworth-Musters: “It was my pleasure.”
