30 years of VC wisdom in 3 key tips

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While a majority of venture capital is centered in the United States, the industry has exploded in Canada in the last ten years, and BDC Capital is one of the leading reasons‌ why. With $6 billion in assets under management, BDC Capital is actively propelling forward investment in Canada.

How are they accomplishing this success, and how are they utilizing technology to support their deal flow? We sat down with Karl Reckziegel, SVP at BDC Capital, who has over 30 years of VC experience, to discuss all this and more.

How BDC Capital wins

BDC’s mission is to be “the bank for Canadian entrepreneurs” and small businesses. They accomplish this mission through lending, small business consulting, and their venture group. Reckziegel leads the latter investment team.

In leading the direct investment group at BDC Capital, Reckziegel is actively contributing to a growing part of the Canadian business scene. In 2010, during the economic downturn, Canada’s internal rate of return (IRR) in venture was -13% (compared to 10% in the United States). These days, Canada’s IRR is on par with the U.S.

Reckziegel and his group aim to be on the cutting edge of Canadian investment. “We actively invest in areas where there is already a lot of Canadian investment while also leaning into areas that need venture, but there isn’t much.” He said.

The BDC team values thinking outside the box and leading burgeoning industries into continued growth. Some examples of recent funds they’ve opened in line with this focus include: industrial innovation, deep tech (like quantum commercialization), and women in technology.

With $200 million or more invested in each of these new funds, BDC Capital hopes to see great progress. But they won’t stop there. Reckziegel is also challenging his group to be a leader in pursuing Canada’s aggressive environmental targets, with heavy commitments to climate technology, clean technology, and sustainability.

Lessons from a venture capital veteran

The most important lesson Reckziegel has learned in his 30-year-long career is that “this isn’t a business you can be a tourist in. You must commit to this asset class. It’s a long-term business, so you can’t expect to just see the best of it without some ‌ups and downs.”

He’s seen the ultimate highs and lows and knows that dealing with times of crisis is par for the course. “You also have to have a good deal of discipline in process and effort,” he added. Bring skepticism to the foray, avoid a herd mentality because too much agreement can lead to blind spots. “Building consistent processes and sticking to them is what makes your team’s success repeatable instead of a series of flukes. Luck runs out.”

One of the most impactful learnings of Reckziegel time in venture relates to how he and the BDC Capital team use technology to better manage their relationships.

Building a relationship-focused VC tech stack

One of the greatest opportunities in the world of venture capital is also one of its largest challenges: relationship management. “Building and managing relationships is critical to venture capital. We depend on Affinity to store and track a lot of data because we needed something very robust to help us manage relationships.” Reckziegel said.

Trying to find ‌the best opportunities that also meet the fund’s mission and investment goals, Reckziegel and his team have to knock on a lot of doors. Over the years, the fund has accumulated information on over 110,000 professional contacts in its collective network.

Keeping track of this data, and having visibility into how all of it fits together, is impossible to do manually. This is why they now depend on CRM technology for their VC tech stack that automates and analyzes rather than just storing data.

They use Affinity to automatically capture their most valuable deal and contact data. From there, the team can reference analytics dashboards in pipeline meetings to review deal flow trends at a glance.

“Being able to pinpoint where your team is performing well and where they need to focus to meet your goals is the only way to create consistent success,” said Reckziegel.

Key takeaways with BDC Capital

With over $6 billion invested across a number of funds, BDC Capital needs to stay sharp. They do this by focusing on a long-term commitment to finding the best opportunities, and this only comes from using innovative technology to better track, manage, and leverage their relationships to close deals.

Watch our webinar with Karl to learn more about BDC Capital became a leading VC firm.