The Ontario Municipal Employees Retirement System is a direct investor across all its asset classes; however, as it continued to get bigger, it was missing a lot of growth opportunities below $100 million, said Sid Paquette, managing partner at OMERS Ventures.
“I think they stepped back and said, ‘Listen, how do we capture some of those growth opportunities for our pensioners in that $500,000 to $100 million range?’” he said, explaining that venture capital helped to fill that void.
Our business is to invest in disruption, Paquette said, explaining that at early stages, when they don’t have a lot of capital at risk, they make more binary bets.
When it comes to identifying new opportunities, it’s more of an art than a science, Paquette said. “Our job is to stay on the cutting edge of technology.”
And this involves hiring individuals whose sole job is to look into the future and bring forward new technologies.
Yet finding senior talent is a challenge, he said. “I think the No. 1 issue we have in Canada as it pertains to technology—without question, period, end of story—is the ability to recruit senior talent.”
Paquette said any senior executive is always going to look at the market they’re moving to, so they can see how many other opportunities there are in case the one they move for doesn’t work out.
To keep smart people in Canada, Paquette said a key will be having companies built here. While this is starting, it’s a chicken-and-egg situation, he said, because people start building companies and then they need to hire a senior person, and that’s a struggle until they build a critical mass.
“It’s just going to take time,” Paquette said. “There’s no silver bullet for this in terms of a solution.”
OMERS is still relatively young from a venture perspective.
“I do believe that you learn more from your failures than from your successes,” he said, highlighting that a key to venture capital is having a team that’s resilient and creative, and can go with the flow of ups and downs.
The Investment Innovation Conference took place in San Antonio, Texas in October 2018 and explored the theme Innovation and uncertainty: Investing in an era of transformation and turmoil.