League of Innovators (LOI) Venture — a firm founded by Hootsuite’s Ryan Holmes and angel investor Manny Padda — is looking to put money into more pre-seed and seed-stage startups before the year ends, through its $20 million Fund I.

“We want to get the best of the best in terms of companies,” Paddy told the Vancouver Tech Journal, when asked about the firm’s recent callout for businesses to get in touch. “We have a lot of funds, angels, and just people we know in the market who are like, 'Hey, you should take a look at this company.' So we've been really big on doing that, but I think it was really to say that we want to see what's out there.”

LOI intends to write cheques between $100,000 and $300,000. It’s particularly interested in ventures that are alumni of accelerators or incubators, but the organization remains open with other criteria, such as industry, location within North America, and whether or not there are signs of product-market fit.

“At pre-seed, you probably don't have product-market fit completely, so we're willing to take a bet on the entrepreneur and the business itself,” Padda highlighted. “But it's got to be an interesting business that can expand out of Canada in terms of the size it can reach. We're looking for companies that can really build, scale, and grow.”

In 2021, LOI launched to address the shortage of capital for first-time entrepreneurs, primarily those under 30. Years earlier, the founders were leading two different charities focused on boosting youth entrepreneurship. Padda was running GradusOne, and Holmes was leading LOI’s accelerator, which notably spun out the sugar-free candy giant SmartSweets. The founders decided to merge their initiatives in 2017 to expand their reach and drive innovation in Canada.

“If Ryan could have started Hootsuite at age 27, not 37, [imagine] how much faster that would have accelerated capital into the Vancouver community, Canada, and even internationally in terms of the number of angel investments made,” said Padda. “So that's where the thesis began for us on the fund.”

To date, LOI has invested in several startups across Canada and the U.S. In Vancouver, milestones from portfolio companies this year include Retreats and Venues, a marketplace for business offsites, raising a seed round in April; Sipply, an app that recommends sommelier-approved wine pairings, starting its first in-store pilot in the U.S. this month; and Blossom, a platform for learning and sharing investing ideas, which as of last week surpassed 1,000 investors waitlisted for its next financing round.

To Padda, there’s no secret sauce for what makes an entrepreneur successful. It ultimately comes down to basic fundamentals, he said, such as their work ethic and how they treat the business and investors.

“What's their tolerance for risk and ambiguity?” he shared as an example. “When you're in a startup, especially at an early stage, you can go in any direction. I've learned from a lot of my mentors that the business you start is probably not the business that's exiting [...] So, what is the entrepreneur like? Are they stubborn and they're like, 'This is how I'm going to build it,' and 'I'm making a product and people will come'? Or are they being iterative in terms of how they're thinking and where the business can go?"

He added: “Do they reach out for help and advice? One thing I've actually noticed [...] is that a lot of our companies reach out for strategic advice on the business where we can provide some insight [...] 'I'm doing the next raise. What do you think the term should be?' or 'I'm going to hire a senior individual. What should I be looking for talent-wise?' or 'I'm going to use a recruiter. Who do you recommend?' I've really been impressed with those individuals and building out from that perspective.”

Looking back on what he’s most proud of with the fund, Padda said it’s being able to create a community among the startups. Nicknamed the "Portfolio Mafia," the founders often seek support from each other to navigate different stages of their businesses.

“They're constantly asking each other for advice, whether it's getting into a certain region in the U.S. or if they're having any issues. [...] So what we've done is created these links and have been able to take a step back and let those folks come together [...] I think it's very strong for the group because they're either going through things for the first time or they’re second-time founders.”

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