Investor News
I don’t talk about our investors very often because there hasn’t been too much to say about them over the past few years but today I have some news. Our early investors have sold their shares in Vanilla to a new group of investors. They had invested over 10 years ago and were ready to reap the rewards. For most of you, there will be no impact. For the management team, we will be welcoming some new people to our board of directors. These new board members will hopefully be more engaged than the ones they replace and help us continue to grow this great company.
Back in 2009, when Vanilla graduated from the TechStars incubation program, we raised about $1M from a group of investors. The largest investor was a Montreal-based venture capital firm called Real Ventures. Venture capital firms are made of Partners (individuals who start the firm) who invest money that they have received from wealthy individuals or institutional investors such as pension funds or university endowment funds. Those investors are called ‘Limited Partners or LPs for short. When a VC firm raises money, they create a fund and they make certain commitments to the LPs of that fund. One of the commitments they make is to return whatever gains are made after 10 years. Real Ventures was past the 10 year limit and had contractual commitments to return capital to LPs. We were able to find some new investors who were i) impressed with our business and ii) who were willing to buy out the old investors and iii) most importantly were a good fit for Vanilla. In fact, we turned down two other investor groups who were also very interested.
This new group is called Level Equity Management. Most of their investments are mid-sized B2B software companies that are profitable. I feel strongly that we are culturally aligned with Level Equity and that they can help us do ever better in the future. I have invited them to come to Montreal for a board meeting later in the year and hope that many of you will have a chance to meet them.
Comments
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Paul has reminded me that in order for this to happen, we had to go through a very rigorous due diligence. Accountants, lawyers, marketing specialists and tech consultants looked at every aspect of our business in close detail. The process for me was particularly painful because I felt like it create zero value but investors don't want to take risks and it needed to be done. We passed the due diligence with flying colours. For a company our size, we are really have our shit together and I'd like to thank everyone for that.
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