Canada’s technology sector is having a year unlike any other. In the first half of 2021, Canadian tech companies raised nearly as much venture capital as they did in all of 2019. Twenty-two companies have had financing rounds of $100-million or more during this stretch—while 10 achieved “unicorn” status, now valued at over US$1-billion each.
One of those unicorns is Toronto-based Clearco—founded in 2015 to help entrepreneurs raise money through revenue-sharing agreements. This past June, Clearco raised $215 million in a round led by Japan’s SoftBank; this followed a round in April that quintupled Clearco’s valuation to $2 billion.
In this season finale for Disruptors, an RBC podcast, host John Stackhouse speaks with Clearco co-founder and Dragons’ Den superstar Michele Romanow about the crazy pandemic year for Clearco, her entrepreneurial journey—she’s also founded a coffee shop, caviar fishery and mobile couponing app—and what she thinks it will take for Canada’s booming tech sector to continue to “kick butt and take names.”
To learn about Clearco and its financing model for entrepreneurs, follow this link.
If you want to understand more about the record VC year for Canadian tech startups—and how that looks in the global context—check out CB Insights’ State of Venture Q2’21 Report via this link (registration required).
In this episode, John also mentions a new report from the RBC Economics and Thought Leadership Team called The Coming Creativity Boom: How human ingenuity will power the 2020s. To read it, go to RBC.com/creativity.
Speaker 1 [00:00:02] Hi, it’s John here. We’ve just been through the most extraordinary in some ways the most unbelievable economic disruption of our lifetime. But, you know, there’s one sector that has thrived through the pandemic and of course, that’s technology. The tech sector is booming in Canada. The boom actually started several years ago. It was driven, of course, by lower interest rates, new tax laws, a lot more venture capital and the rapid shift toward digitization. But it was also fueled by a new generation of tech entrepreneurs who not only wanted to take risks but were committed to building global companies in Canada in twenty twenty one, a lot of those startups started to take off. Just look at the first six months of this year. Canadian tech companies raised nearly as much venture capital as they did in all of twenty nineteen, and that was a pretty good year. Twenty two companies have had financing rounds of one hundred million dollars or more and we’re not even through summer and ten of them have achieved unicorn status. You’re probably familiar with the term unicorn. It refers to companies that are valued at at least a billion US dollars. A few years ago, you could count Canadian unicorns on one hand. Today, it’s in the double digits. Canada is now the third most productive tech ecosystem in the world after Silicon Valley and China. That’s in terms of invested capital. But as we look beyond the pandemic, what will it take to sustain this boom? What will it take to keep this talent here in Canada with their companies? And how can Canada continue to nurture homegrown talent and build a new generation of global tech champions? This is Disruptors, an RBC podcast, I’m your host, John Stackhouse. On today’s program, we’re taking a closer look at Canada’s tech boom, a scene through one of this year’s biggest success stories. Toronto-based Clearco, formerly Clearbanc, was founded in twenty fifteen as a way for startups to raise money through revenue sharing agreements. Since then, Clearco has been able to lend more than two and a half billion dollars to more than fifty five hundred companies. This past June, Clearco raised two hundred and fifteen million dollars in a round, led by Japan’s Softbank. This followed a round in April. The quintupled Clearco’s valuation to two billion dollars, delivering the six year old startup into Canada’s exclusive Unicorn Club. My guest today is the co-founder of Clearco and one of Canada’s best known tech entrepreneurs, Michele Romanow. Over the past 15 years, Michele has launched a coffee shop, a fishery, a mobile couponing app, and now with Clearco, a pretty revolutionary moneylender. She’s also one of the stars of CBC’s Dragons Den. Michele, welcome to Disruptors.
Speaker 2 [00:03:10] It’s great to be here.
Speaker 3 [00:03:12] So it’s hard to believe we’ve been in this crisis for roughly 18 months. Sometimes it feels like 18 years.
Speaker 2 [00:03:19] It does definitely closer to 18 years than 18 months.
Speaker 3 [00:03:25] So what have you learned?
Speaker 2 [00:03:26] Oh, my gosh. I have reconfirmed myself that I am an extrovert. And this was a totally new level of resilience for me. I never thought in a million years that Clearco would be a remote company. We had a rule about everyone was in the office. Everyone had to move to Toronto and we just continued on, I wouldn’t say without a beat. There was lots of things that happened during that period that we had to learn from. But I think that is going to be so liberating. And it was actually really interesting. So there was a lot of work, a lot of actually a lot of the early work RBC produced on this, saying that the pandemic was a huge setback for women because effectively they had become both workers in their home and kindergarten teachers and everything. And I think I am very hopeful that that’s actually quite temporary, because what we did in this pandemic is we proved that working from home was not I am at home doing my laundry, checking an email once an hour. I am actually working from home. And when you think about the long term effects that that is going to have on women and families, I think that is going to be absolutely game changing. And so that was a huge part of learning through the pandemic. And then the last thing that was probably very relevant is, I mean, we raised more than three hundred million dollars from a zoom screen. And this was an industry that everyone said you had to meet in person. You had to get to know other people. And I think that there was a contraction in deals with probably the very beginning. And then people just said, well, look, the world has to go on. And and so we’ve kind of found ourselves in in a new paradigm.
Speaker 3 [00:05:13] Can we jump, Michele, to the state of entrepreneurship? Because this this this crisis has been devastating for a lot of entrepreneurs, been liberating depending on the sector for entrepreneurs. You are a serial entrepreneur, how do you think entrepreneurship has changed because of this crisis?
Speaker 2 [00:05:34] I think everyone now has to think digital first, and I think we probably would have been in another twenty, twenty five years of, you know, in person first, no matter what that means, whether that was retail or restaurant or whatever. And I think you’re right, there was lots of businesses that saw devastation. There was an equal number. I remember this season and last season actually on Dragons Den, just seeing these extraordinary businesses. I remember there is one that’s like you know, it’s an app that shows you where you can bring your dog. The whole revenue model was based on in-person events. And like all of these businesses pivoted. And they if you were a restaurant, you were figuring out how to do corporate events where you had sushi come in. And that innovation is actually extremely important that we have that because entrepreneurs are always throwing these curveballs along the way. And I think we got we got to see this. We were like we were on the front of the airplane on this. We saw this incredible rise in e-commerce and digital commerce. We saw double the amount of new businesses created in the US that in the US last year than any other year in the last 10 years. And I think that’s incredibly important because we can look at a small, narrow section of some brick and mortar businesses that were incredibly hurt. And effectively, what we did is we just put an enormous amount of government debt. And I think that’s going to have a lot of long term effects on those businesses. But there was a lot of people that basically said, screw it, this is my life with the virus. I am either not doing my job and I’m actually going to build my dreams. And I think that that is going to be such a win and we’re going to see this enormous growth of businesses. I mean, double the amount of new businesses were created. And so we look at this the same way that I started my career in the 2008 recession. I was there at the beginning of this group on an e-commerce phase where we had just started with kind of the early consumer tech and obviously the Airbnb and the Uber is just completely took off. But a lot of these were recession based businesses. And although we are not in a recession at all, we went through this kind of crazy economic cycle that I think net is going to produce some extraordinary businesses to watch because we’ve actually seen the creation of all of them this year,
Speaker 3 [00:07:56] these disruptive moments. And we call this disruptors for a reason or real pivot points for society and economies, whether it’s a recession or not. And we saw that in the in the financial crisis, as you said, that’s when Facebook and so many other companies took off because social norms change really, really quickly when this crisis hit. Did you having lived through a previous crisis? No. At the beginning that this was going to be a kind of reset in which opportunities pop out of left field.
Speaker 2 [00:08:29] I now consider myself very blessed that I finished engineering and two thousand seven I finished my MBA in two thousand and eight, I moved out to New Brunswick to build a fishery from scratch, which was producing sturgeon caviar. I was producing one of the most luxurious products, not the definition of things you do not need in a recession is caviar, right? And so I built this business of selling it and I still remember what September 8th of twenty felt like when it was like, oh my gosh, most families were saying they had lost, like, I don’t know, a third to half of their net worth. I was like, this is going to be so painful. And I think there’s nothing like I mean, entrepreneurs lived through crisis’s every day. I mean, I literally wake up. I always say there’s like two things. It’s like slap me across the side and had every week. I just don’t know what they’re going to be. But even in this situation, it was pretty difficult to stay calm. I think I what we did is we just kept hunkering down on saying, here’s what we need to know. We divided the company into one of six initiatives that we were all working on. We continue to put money into the market. This is when literally everyone else that was providing capital, whether it was square or everyone else, pulled back, we said, no, we think these businesses are going to do OK. We’re looking at data every single day to see how things are going in. Some of these trends we’re so interesting was like at the beginning of the pandemic, it was like no children’s toys and the children’s toys went through the roof because everyone was like, oh my God, I’m home with my kids. And there was all these weird friends that we’re watching were like, beauty is going to take a nosedive. It’s like no one’s going out anymore. And then three weeks into the pandemic, everyone’s watching themselves on Zuman beauty is not taking a nosedive anymore. So what’s the benefit of having all this data is that we were seeing it. And then I think the last part of it, managing through a crisis is just constant, transparent communication. I think for a company of our size, we did an all hands. I mean, we were two hundred people at the time. We did an all hands every single day at five o’clock. And I’d say 90 percent of all hands. I felt like I would say. I don’t know more than you we’re not going back to the office tomorrow. And here’s what’s happened. But it was it is not easy to manage through a crisis.
Speaker 3 [00:10:38] It takes a certain humility. And entrepreneurs get humbled every day, as you know, but also have to be super confident because no one’s going to have more confidence in your business than you. So you’ve got to be 100 percent confidence how when you’re going through this kind of turmoil, do you manage that need to be confident to be the leader, to know where you’re taking the place with that kind of daily or hourly humbling that a crisis looks on all of us?
Speaker 2 [00:11:08] You have a very close circle that you are incredibly honest with because you cannot you cannot at the end of the day, be fooling yourself. And you can be I think optimism and living in reality are very different things that many people conflate all the time. Right. They think that if I just ignore what’s happening and the fact patterns, I am ruthless around getting to the bottom of the story and why things aren’t working and why that’s not happening. That does not mean I can’t take what could look like a very negative spreadsheet and say, oh, God, so we’re doing this. And that is really it is separating optimism and separating reality, because I think those are two different things. Andrew and I were incredibly honest with each other throughout this crisis. Every day we were like, OK, this happening where are our assets going, how do we protect this? How do we keep going? Are we taking too much risk? And, you know, it’s a funny thing as you look back now. And one of the things that we did is we pulled out of international markets and now we wish we would have gone so much further. I mean, we we had launched the U.K. by October already. So it’s not like we had a we had a long pause, but I think we had that moment where we could have gone even stronger, even faster into doing things. So even when you think you’ve done an OK job of managing it, you still look back being like, oh, if I’d only known we were going to bounce back so quickly, I would have taken a couple more risks during this process.
Speaker 3 [00:12:33] But what gave you pause and what didn’t you see?
Speaker 2 [00:12:36] Oh, my gosh, we just had no idea what was going to happen. Like, we were we were all reading the same things, which is like the crisis is worse than. I was so worried that consumer spending was going to drop. I mean, we backed we put two point four billion dollars and fifty five hundred commerce companies. I am not a fool. If we see all of consumer spending drop, it’s going to be pretty difficult for us. So there was this whole there was real fear in what could potentially happen there. And then you just you don’t know what you don’t know. And we’ve we made it through.
Speaker 3 [00:13:13] Maybe we can pause and ask you to explain to our listeners what formally Clearbanc does.
Speaker 2 [00:13:19] So I’ll tell you the story. I had been a serial entrepreneur my whole life, built an e-commerce company myself. No one would find me because they just didn’t understand the business and didn’t think e-commerce businesses could do that. Well, sold an app to Groupon and then ended up getting cast on the on Dragons Den when I was twenty eight years old. And what’s important is everyone’s like, oh, that was so great. I mean when you’re me you just feel like the runt of the litter. You are the poorest one on the show and you are the youngest one on the show. So you feel like you have no idea what you’re doing. And so I took a totally different approach to looking at these businesses. And we see something like two hundred and fifty pitches back to back in seventeen days. A lot of things start to distill. This is my first time really being an investor and everyone’s kind of like, look, I want I want one hundred grand and I’m willing to give 10 percent of my company at the early stage. And yes, what they need the money for. And it’s always the same two things. I need it for inventory and I need it for customer acquisition, which is really Facebook and Google ads today. And so I remember thinking, like, why are founders using the most expensive capital in the world, which is always going to be equity to do something that really has a fixed term. I mean, you buy inventory, you can only market up three or four times. You buy Facebook and you’re hoping for a three or four times return stranger. And I put our heads together and I came back to the show the next day. This is in twenty, twenty, fifteen, twenty sixteen. And I was like a different deal type. I’m going to give you the hundred thousand dollars you’re looking for instead of taking ten percent of your company that alone forever. I just want ten percent of your revenue just to pay me back my capital plus six percent. So I was like oh that sounds like a load. And I’m like, no, it’s not alone. There’s no personal guarantee. There’s no fixed payment time. There’s no company interest. But most importantly, this isn’t debt. If you don’t pay me back, I’m not going to bankrupt your business. Totally different risk profile. And so the founder that day was like, yeah, I’ll do that. And that’s effectively the category we created is revenue share deals for founders. The only two options that existed before we did were really bank debt, which always has personal guarantees associated with it and is really in small business as a form of personal loan. And then on the other end there was venture capital and there’s absolutely nothing wrong with any of those. Venture capital is designed for people who are in the venture capital ecosystem. And so it is. And there’s been. So much published on this, it is extremely unfair the way that is distributed, because if you went to Harvard and Stanford and if you know the VCs, it’s not hard for you to raise an extra dollars. But to think about how large our market is, I mean, there was just a in commerce. Again, we find gas companies and mobile apps, just any commerce. There was twenty five million commerce businesses last year, five thousand of them VC funding. So not only does their product work well, if you’re raising venture capital because you have to take as much solution, you can use our capital for your ads and inventory. But we have a big a big, big, big market out there. And so know it’s hard to believe that off that little jewel off the show, we’ve been able to fund two and a half billion dollars into five thousand five hundred different founders. I mean, our mission is to find a million founders. We think that that’s big and bold and requires us to operate in most countries around the world. But we think we can do that. And the category was created out of Canada, which I think is just the coolest thing. I mean, I think Andrew and I probably thought we could start a company. I don’t ever think that we could start a category. And so that gives us a lot of pride.
Speaker 1 [00:16:33] OK, we’re going to take a quick break. But coming up, more of our conversation with Michele Romanow on the challenges of scaling up and the opportunities ahead for Canada’s thriving tech sector. You’re listening to Disruptors, an RBC podcast, I’m your host, John Stackhouse. You may have heard our recent two part series called The Creativity Economy. We’ve also recently launched a new thought leadership report on the skill for the twenty twenties. It’s called The Coming Creativity Boom. In it, Canada’s most creative thinkers share their insights on the country’s creative potential, discover how different creative types deliver value and how we can translate that into our country’s creative future. You can find it at RBC dot com slash creativity.
Welcome back. I’m speaking with Michele Romanow, one of the dragons on Dragons Den and co-founder of Clearco.
Speaker 3 [00:17:41] What would change is you, Michele, as you as the company grows, you know, to a two hundred and fifty employees.
Speaker 2 [00:17:48] we’re now four hundred.
Speaker 3 [00:17:51] OK, so youre four hundred, I’ll blink again.
Speaker 2 [00:17:54] And five zero people started on Monday. This week. I am just like blown away by the growth that I’m witnessing.
Speaker 3 [00:18:01] And you now have employees, I’m guessing, who you don’t know and you never know. How do you have to change as an entrepreneur? Because until now a lot of your businesses have been things you could wrap your arms around.
Speaker 2 [00:18:14] Yeah. So this is the hardest part of being a founder. Is that what gets you to stage one and stage two does not get you to stage two and stage? And it would be easy if the things that got you to stage one and stage two, everyone was laughing at you along the way. You get down to it and you get said no to so many times in this business. And I always think it’s important to share. Right. So we had this idea that we could give our founders money. We would just use the data sources from their business. We would have no personal guarantee as a backup plan. And I went around Wall Street in my high heels pitching all of these credit guys. And two hundred people said to us, I think the rudest ones said, you guys don’t even understand credit. This will never work. You’re going to lose your shirts. And we’re like, no, we’re pretty sure that these are the data sources that will be more indicative. Pretty sure that because we have access to this information every day, it will it will be a stronger source of data and signal. And so many people see so many people think this is like a cute business. So many thought people thought we would deploy twenty or thirty or forty million dollars and it would be like this cute little thing. And we’re like, no, no, no, we’re going to go we’re going to build an asset class. We’re going to build an asset class that’s bigger than venture capital because I have a I have a TAM that’s much larger than the town of companies that could possibly 10x a year. And so you callous yourself in a really good way where you’re like I am used to people saying no to me. I’m used to people saying I’m wrong. And I had to hear so much of that to get here. But what that does is it gets really scary because now I have to be a very different leader than I was at the early stage. And so my leadership style is always get my hands dirty, always get into the spreadsheet myself, call the customer myself. If something doesn’t make sense to my team’s telling me, it was like there is no task to lower too high for me. I will do it. And that’s an important I think part of leadership is to just lead from the front. But that is a completely unscalable form of leadership when you’re trying to enter ten countries in a year. So you have to work with coaches and people that can take you to that next level. And I have had to stop doing and in many ways things that actually hurt me because they were some of the things that that that made me so successful. And I get that this is going to be the hardest part of my journey, too, is changing the way that I lead. I used to have people could call me at midnight and I took their phone calls and I can’t have a one on one relationship with everyone anymore. And in many ways that completely breaks my heart. But I have to figure out now how to communicate on all hands. I have to figure out how to how to do different things. I think I would give you one last example, and I actually think this is a good example because it’s a little bit controversial. So we’ve got a couple of people thinking about it. But I I had a really interesting experience watching Uber scale. And one of the things that most people don’t know about the Uber story is they know the part of the story where Travis gets aggressive and then he’s kicked out. But they missed the part of the story where to build Uber meant fighting every single taxi union basically in the world. And most people are like, oh, yeah, it was a fight and it was a fight with the government. In many cases, it was a fight with the mob. And I knew actually many friends that had started competitors to Uber. That stopped because they had literally people show up at their door saying they would kill their family. This was not this was this is the definition of what you call a dirty business. Right. And the balls that it took to continue operating when you basically had a person in every city that didn’t want your business to fail, but they actually wanted you killed was very different. And I don’t think anyone ever gave him the respect for having to to build this in every city. And I think now all of us appreciate that this is an incredible public utility, that we now have drivers on demand. But imagine just going to the expression, having the empathy of what that must have felt like to do that in two hundred and eighty four hundred cities around the world. And then you build a little bit of cockiness. You understand that you always feel like people are going to take you down and then you. Lose the empathy for who he needed, the empathy for, which is at the end of the day, his own employees, his own teams and the drivers that funded his business. And this is this is I just it hit me so hard reading his story that the same thing that brought him to where he was was the exact same trait that brought him down. And that is why it is so bloody difficult to do this job as you scale, because he would have never made it there without that trade. And then that trade has to change and get more nuanced and get different. And I think it’s just an important part of the story because people I don’t think he gets credit for what that took at the early days. They just see how that became the fatal character flaw in the later days. And so I think there’s a lot to learn. And I try and be very humble. And that’s going to be have to be a part of my journey as well.
Speaker 3 [00:23:24] You’ve mentioned Andrew a couple of times, that’s Andrew de Souza, your business partner and life partner, and it’s always amazing to watch how you manage that. And I’m curious how your dynamics as the company grows and how you keep hold each other to account of each other, humble, but also balance that those growth challenges. Is it easier as a couple or easier as individuals?
Speaker 2 [00:23:52] I think there is there’s a lot of emphasis placed on the fact that we’re a couple when you’re when you have a cofounder, you just do everything together and you spend much time together and you have to learn how to work very well. And one of the things that makes Anthony such unique cofounding is we are actually very different business people. And Andrew is an incredible product visionary, has extraordinary ideas and the ability to implement those things. And I am a much maybe harder seasoned operator. So we actually what we’ve done today is we divide the company into what we call horizon one in horizon two. We think we have the luxury today of thinking about Horizon two, which is how do we create long term innovation, long term retention of our customers and incredible products that the world couldn’t even dream about. And what gives us the right to do that is my part of the business, which is Horizon two, which is making our numbers this year, which is, you know, it’s the vast majority of the org and making sure we’re operating and we’re launching these 10 countries and everything happens. And we have changed rules over the years. We have found different balances over the years. And then we’ve had to figure out how to balance our own lives as well, which is most couples plan date night because they want to see each other and they want to have uninterrupted time. By definition. I see Andrew every single day. So we have to plan on date nights where we do things better. And you just figure out these rhythms that are incredibly important to you as a couple and to you to your bringing often. I mean, look, I think it was it was great that we got to build something together. I still think he’s one of the best founders I’ve ever known in my life. And so it just comes from an area of respect. Last thing I would say with your partner is and I think Covid actually taught so many couples this is most couples had no idea what they did when they went to work every day. So you love someone, but when you get to see someone when at work and be really good at doing something in their career, they’re kind of like a whole new level of love that gets unlocked with that, which I think is always really cool.
Speaker 3 [00:26:00] That’s a beautiful thought. So your horizon one and his horizon two, is that. That’s correct. Yeah, that’s great. It could be a new and a new playbook
Speaker 2 [00:26:12] because every company has the same concept. It’s short term and long term. And we have to do both and we have to do both really well. If we want to be one hundred year old company, it’s got to be a horizon too. And if we don’t meet this year and what we need to do well, today, we don’t get the right to have a horizon.
Speaker 3 [00:26:30] Well, all of this is unfolding and unfolding very well for Clearco. We are in the midst of the most extraordinary a tech boom. But in some ways, it’s one of the most extraordinary business booms just in the last 12 months in terms of all sorts of asset valuations, but particularly in the VC space. What do you make of what’s happened in such a short period?
Speaker 2 [00:27:00] I actually think you’re probably better to tell me. I don’t think we have ever seen this level of whatever we want to call quantitative easing, printing money that we have ever witnessed the world see. And I think we saw a little bit of what that looked like in 2008 and how that that was still very slow. We were seeing asset prices increase very slow. I, I have no idea what that’s going to mean. And I think they’re far smarter people to talk to me about that. But what I can say is that tech is not is not having a different bubble compared to other asset classes, the same way that real estate is up, the same way that equities have tech is up really on that same cadence at this stage. I can tell you we’re not being valued today on potential in the future in a bubble. There’s an extraordinary amount of diligence at this stage, especially when you get a partner like Softbank that wants to understand how big this business and how big the TAM is and how well you guys are performing. And so I don’t I don’t think I would I would say that this is a bubble. I would say that we should be so proud of, like this new series of what should be close to it. I don’t know a handful of Canadian unicorns. And it’s exciting to celebrate now, but it’s important to remember that all the seeds were planted five, six, seven years ago as people were coming out, as there was more venture capital in the ecosystem as there. More support, and my number one thing is I would just beg Canadians that we cannot have tall poppy syndrome here, we have to root and we have to cheer for these companies to win, because the reality of tech companies is they are largely winner take all markets. The network effects you get on data are so powerful that you get to end up owning the market. And so when we talk about the things, I always think that there should have been a B in there and it should have been BlackBerry. And we have to think about how to not create great companies for Canada, but how to create great companies for the world because they will provide enormous dividends to Canada while doing that. And I think we have a tendency to just not celebrate successes the same way, or they we want to take people down when they’re getting successful. And that’s not how we’re going to win as a country. We don’t win if we’re all like, oh, let’s create a bunch of little Canadian oligopolies. That’s not a win. We’re two percent of the global economy and we need companies that are intrinsically global. And then by God, we get to share all of the Canadian values we like with the rest of the world. By building a company here,
Speaker 3 [00:29:37] what do we need to do to create more of those global winners and global champions?
Speaker 2 [00:29:44] Capital was a big part of the early equation, we’ve largely solved a lot of that risk taking is the other one. I would be lying to you if there wasn’t a lot of days I lied in bed being like, oh, my God, please, someone buy this company so I can I can, like, take a vacation with longer than 48 hours. And I’m so happy today. We kept we kept going. But we also had investors that were really supportive and we had customers that were very supportive for us to keep going. And we need that that global ambition. Right. If we continue to chop down people for God, anything from like traveling to operating in another country, which is not exactly like ours to do, we do this. We get very myopic as Canadians sometimes. And it’s just not how we’re going to win. We’re going to win because we think about we want to create something that’s dominant and we want to create a category. And it’s based in Canada. But it’s for the whole world.
Speaker 3 [00:30:41] And in many ways, you know, in a new echelon, you mentioned Softbank, one of the world’s biggest investors. You’ve got Maya Son now involved in your company. How does that change things?
Speaker 2 [00:30:56] It’s first of all, I couldn’t believe it. It wasn’t until we were doing the press where we were like, we’re the first Canadian company Softbank invested in. And then we went back to Softbank and they’re like, yeah, you guys are. And we literally didn’t realize that until like a week ago. Look, it’s a it’s an extraordinary vote of confidence. It’s a reason to have a glass of champagne and to take a moment to pause and be like, that’s really cool. But it means that we are just at the beginning of our journey. I mean, Andrew and I have literally sneakers that same day one on them. And day one means we haven’t earned anything yet. There’s no laurels. Anyone can come and build something. And we need to have this attitude every single day. We have to keep building. And so I think this is like a great vote of confidence for Canada that companies like this can be built there. But I think it’s so bizarre to celebrate fundraising in a way, because at the end of the day, it’s external validation and someone believes in your company, but you’re also celebrating that you just sold a little piece of your company. It’s actually a bizarre thing. It’s like today Michelle and Andrew gave up another X percent. And at the end of the day, I think foundational in their business because they do all the work and investors are or can be hugely helpful. But thinking about the balance of dilution, which is effectively what our company was built on, is incredibly important.
Speaker 3 [00:32:20] As you become more and more of a global company, how do you stay Canadian and how do you avoid being swallowed up by other global players?
Speaker 2 [00:32:31] I think this is where founders have to really think long and hard about how they’re financed. They partner with because there’s certainly situations where you can have things that look like hostile takeovers or things like the public level where companies are given less of a choice to choose. But if you create the discipline around a good business model where you have you have capital and you have options, that gives you the right to continue to remain independent, to continue to show your values and to continue to build that way. And so I think we’re not explicit when we talk. We celebrate fundraising’s but we don’t talk about the more complicated part of fundraising’s, which is do founders still control their board if they still control their destiny? Are they in a position where and this is also founders jobs as well? I mean, if you are burning more money and if you put yourself on the treadmill where if you don’t raise every 12 months you don’t have a company, you’re allowing yourself to be controlled by another partner. And so having that discipline is exceptionally important. And that’s what allows you to really be the sailor of your own ship at the end of the day.
Speaker 3 [00:33:35] If we can have you back on the podcast in a year’s time, what do you hope we’ll be able to talk to about?
Speaker 2 [00:33:42] Oh, I think we’ll be able to talk about all the mistakes we made in a global expansion of what worked and what didn’t work and the advice I can give to other Canadians I’m trying to figure out how to do that. I think it’s going to be a really, really interesting time. The other thing that. So this is a funny one, John, I’ll tell you, because I always like talking about when I’m wrong. So you can always people with too much time can find interviews saying the reverse of I remember when I was first starting off as an entrepreneur, everyone talks about, oh, well, there’s just not enough talent in Canada and you’re going to have to go to other places to get talent. And that’s impossible. There’s thirty three million people in a country like there’s no way I out of talent. Like, that’s just that just seemed like such a bizarre concept. And today I understand what people say when they mean we are out of talent, because when you have a company that’s going through this growth stage, you need enough people on your executive team that have actually seen this before. And in the early stage, you can almost always bet exclusively on young folks that. Work their ass off that will just like figure it out, but the landmines are too big and the time is too fast. So I didn’t know things like how to hire an employee in ten different countries because they’re all different. And some of those people I couldn’t fire and some of those people like you can use these employment for like one tiny thing that that when people have seen this growth curve or this growth spectrum, they’ve gone through. And so that’s kind of and your CFO office and your chief people officer and a bunch of different things where you want someone that says, well, yeah, actually we had to do this. And when Salesforce was going to say it had to happen and we just haven’t built enough of these. I think half of our team is in the United States now. I mean, or how the product is and is in Seattle because she came from Amazon or our CFO was in San Francisco because he ran technology investment at JP Morgan. And we’ve all worked as a remote team. So it totally worked. But it’s one of the things that I was wrong about is that we are going to continue to need to figure out how to get great talent into Canadian companies because of the speed and the scale. If you’re asking founders that haven’t done this before to do it as trial by fire, the mistakes are just too big at this level. And so I finally got it and I was very, very wrong with this forth.
Speaker 3 [00:35:56] What an extraordinary conversation. Thank you so much for your time. Our guest today has been Michele Romanow from Clearco. Michelle, thank you.
Speaker 2 [00:36:05] Thank you for having me. It was wonderful to be here. And a great conversation.
Speaker 1 [00:36:08] I’m John Stackhouse and this is Disruptors, an RBC podcast. Stay tuned in the weeks ahead as we bring you some of our favourite episodes from the past year and update some of the amazing stories of Canadian resilience. Talk to you soon.
Speaker 4 [00:36:30] Disruptors, an RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR audio. For more Disruptors content like or subscribe, where you get your podcasts and visit rbc dot com slash disruptors.
John Stackhouse is a nationally bestselling author and one of Canada’s leading voices on innovation and economic disruption. He is senior vice-president in the Office of the CEO at Royal Bank of Canada, leading the organization’s research and thought leadership on economic, technological and social change. Previously, he was editor-in-chief of the Globe and Mail and editor of Report on Business. He is a senior fellow at the C.D. Howe Institute and the Munk School of Global Affairs and Public Policy and sits on the boards of Queen’s University, the Aga Khan Foundation of Canada and the Literary Review of Canada. His latest book, "Planet Canada: How Our Expats Are Shaping the Future", explores the untapped resource of the millions of Canadians who don’t live here but exert their influence from afar.
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