Thealzel Lee plays a central role in the Vancouver innovation economy. She combines roles in the nonprofit sector with consulting, through the iconic Vancouver firm Rocket Builders (that publishes the annual Ready to Rocket list) and investing. With her investor hat on, she manages a team to organize the monthly meetings of the VANTEC Angel Network (founded by Mike Volker), leads the eFund (an active BC angel equity investment fund), and makes investments herself.

These different aspects of her work give Thealzel a unique perspective on what makes innovation work and what motivates people to dedicate their life energy, and take on risk, in order to affect change.

Disclosure: Ibbaka has received an investment from eFund and Rocket Builders founder Geoff Hansen is a coach and advisor to the company.

Ibbaka: Can you start off with your background and what brought you into your role within the Vancouver innovation economy?

Thealzel: My original ambition was to obtain my doctorate in biochemistry and become an academic. Instead, I switched over to business and earned my MBA from the Richard Ivey School of Business. I ended up becoming an entrepreneur myself as I had a franchise retail company in eastern Ontario. Then, I went off to Africa, where I worked at different international development agencies. The last one before coming back to Canada was with a UNDP (United Nations Development Programme) funded agency that focused on developing business strategies and financing for women entrepreneurs. That brought me into a career path that led me to investment banking to help companies in Vancouver. This led me to do work with Rocket Builders and VANTEC Angel Network during which I founded different angel investor funds, of which the latest is the eFund.

Ibbaka: That is an interesting career path from academia to entrepreneurship, Africa and then back to Canada.  What motivated these different transitions?

Thealzel: Being an entrepreneur requires one to wear different hats. I found that very stimulating and challenging. Hanging out with other entrepreneurs whether they are in Canada or not, was very inspiring to hear what they can think about. To innovate and bring our society forward in any manner that happens to be. It doesn’t matter what country or background they originate from; entrepreneurs all have the same mindset and drive to do something. Entrepreneurs do not accept the status quo, but want to move forward to a better society. That has motivated my own transitions as well.

Ibbaka: Is it fair to say part of your motivation or being involved in the innovation economy is to have a societal or social impact and not just a business impact?

Thealzel: It is both. Social and business impacts go hand in hand. If something doesn’t benefit society it ultimately fails. It may take a long time, but it ultimately fails. I think the most successful innovations are the ones that benefit society, and those are the ones that get worked on. If our innovations don’t benefit society, then we as a human species won’t last long.

Ibbaka: You play a number of different roles in the local community: A strong role with non-profit organizations and as one of the leaders at eFund and VANTEC. You have been an active consultant elsewhere. How do these roles come together? Do they reinforce each other, or do they distract from each other?

Thealzel: As I look back at my zig-zag of a career, I have been in investment banking, an owner/entrepreneur of a retail franchise, a consultant overseas for African businesses, an investor and founder, I think all of these activities share certain themes. I like creating and building things which are key traits for an entrepreneur who wants to innovate. The creativity and innovation drives me.

Ibbaka: Does that apply to the non-profit work as well as to the investment work?

Thealzel: It does. It is pretty amazing how the business principles that I learn from the corporate side of things, I bring to the nonprofit world. A lot of the nonprofit ideals and values I bring back into the business world. They are merging together. More and more investors are becoming socially conscious. I remember back in the 1980’s when this was called “ethical investing”. It has always been around as one form of philanthropy or another. I think a lot of the current philanthropists are also looking for a return, so the approaches of the two spheres are coming together.

Ibbaka: What are some of the trends you are seeing, both in general, and pandemic specific trends that you have noticed?

Thealzel: In the earlier part of my career, there were a lot of “silos.” Nonprofits didn’t talk to corporate; finance didn’t talk to marketing; early stage investors were distinct from corporate or financial investors. I now see a lot of overlap and convergence. Even with technologies, the same technologies are being used in many different sectors and are even connecting them. 

eFund was set up to be industry agnostic to take advantage of these overlaps and convergence amongst the different technologies. For example, I saw a lot of overlap with software, material sciences, nanotech, and medical devices. The same convergence is true with business practices and the social practices from my nonprofit world, they are all merging. 

I see that happening in the local innovation economy as well, where people with diverse backgrounds are coming together. 

The Covid-19 pandemic is accelerating this. One company that benefited during this time had a life science product that merged with software, and they are doing very well. Some companies we saw at the eFund event were having problems and challenges at the beginning of the pandemic, but they have  managed to pivot, turn things around, and take advantage of some megatrends not just to survive, but to thrive. If the entrepreneurs are innovative, they’ll be able to recognize trends in the marketplace, pivot, and take advantage.

Ibbaka: One of your roles has been coaching and mentoring. Can you say more on that?

Thealzel: That wasn’t a role that I sought. Early in my career, I benefited greatly from people who acted as coaches and mentors to me although it wasn’t formally recognized as that at the time. It was more that I was looking to get advice from people who had more experience than me. I’m always looking for the best way to solve a problem or to attack a situation. I look to others who may have gone through that and then I share what I am learning with aspiring entrepreneurs. My advice is don’t be afraid to ask. We’re not born knowing everything.

Ibbaka: To what extent do eFund or VANTEC play a role in providing coaching and mentoring to the innovation community?

Thealzel: Both of those entities are dependent on the individuals engaged. VANTEC is a platform for investors to meet entrepreneurs and see if they are worthy of their investment. It is up to the individual investor to take on a role, formally or informally, in the entrepreneur’s venture to do coaching or mentoring. VANTEC is a platform for that to happen. We like to encourage the investors to find the entrepreneurs for that organically and for entrepreneurs to find investors. 

eFund is more formalized. We have a structure that encourages the shareholders within eFund to coach and mentor the companies we invest in. We encourage the shareholders in eFund to act like talent scouts. Once an investment is made, there are formal processes where we have the shareholders continue to coach and mentor the investee entrepreneur.

Ibbaka: eFund has pioneered a team-based and collaborative approach to due diligence. Can you tell us a bit more how due diligence works at eFund?

Thealzel: We encourage the shareholders in eFund to go and attend the community events. There are plenty of them besides VANTEC. eFund’rs are encouraged to look to see if there are other people from eFund present at the event, if the other eFund’rs are excited by that company, that says something. If not, that says something too. 

Presuming there is some interest from eFund shareholders, we provide a format for these eFund’rs to investigate further and see whether the company fits the eFund investment criteria. If it looks like it does, then a formal team is struck and a formal due diligence process begins. Eventually the due diligence team presents a report to the investment committee, and if the committee agrees with the team’s findings, then an investment is made in the company. If that company has a profitable exit in the future, all of the people involved in the formal due diligence and investment recommendation are rewarded with performance fees.

Ibbaka: What are some of the skills people need to be successful on due diligence teams and also to go on and mentally support the investees?

Thealzel: Observation, patience and being able to listen. Each coach or mentor will bring their own life experiences to bring to the table. They need to rely on their strengths and then go to other people for what they don’t know. Good coaches and mentors have networks, so if they don’t know an answer to a particular problem, they know where to go to get the answer. Varied life experience plays a big part in this. The best early stage investors have had a lot of different life experiences.

Ibbaka: Regarding varied life experiences, there is a perception among some that the innovation community is not truly diverse. Is that a fair observation? If so, what are some things we can do together to encourage diversity?

Thealzel: We need to be more respectful of each other. I see a few members of the community being dismissive towards others that are not like them. Maybe they dismiss them because they think nonprofit experience is irrelevant to business, and vice versa. People from different disciplines sometimes downplay the importance of other disciplines. Finance people don’t think non-finance people bring anything valuable to investment. Technical people sometimes think they are the only people who can evaluate a new technology. The same can apply to differences in culture, gender or identity. Not respecting other diverse perspectives leads one to only associate and only get opinions from people who look, think, and come from a background just like them. That will not lead to sustainable innovation.

Ibbaka: You mentioned earlier the merging of silos. Does that make diversity and the acceptance of different points of view more important?

Thealzel: Absolutely. If you’re trying to take advantage of these different threads that are being woven into the economy, and the people you invest with do not appreciate diversity, then you’re at a disadvantage.

Ibbaka: Another criticism that one hears about the innovation economy, is that it’s a very urban thing. Do you see that as a fair criticism, and if so, can that change in the coming years?

Thealzel: It should change. Today, most of innovation tends to come from urban environments. That’s where we are. It takes work to go beyond our own little silos to look across to different environments and perspectives. We need to do that work and be open to innovations coming from outside urban areas.

I am also active with the Pacific Northwest angel groups. We meet every month and promote the entrepreneurs that we see through our own angel groups like VANTEC.

Ibbaka: How important is that to growing and strengthening the community?

Thealzel: Very much, because anytime you grow or strengthen outside your own local area, it is all for the good. Gaining other perspectives and encouraging diversity. We’ve had American angels come here and invest in Canadian companies.

Ibbaka: Does investment also go the other way into the Northwest?

Thealzel: It sure does. I know a few angels and some eFund’rs who have invested down south. They have diverse networks that go beyond Vancouver-centric and this helps everyone. Through the Keiretsu Forum, which is the world’s largest network of angel investors, I’m connected to other Keiretsu groups all over the world.

Angel investing depends on these webs of relationships, the more connections we make, the more valuable our networks are.