Matt Cohen wraps up an extraordinary year in tech, venture capital, and innovation with this special "Best of 2024" episode of Tank Talks. Featuring insights from some remarkable guests, this episode explores the year’s defining moments and actionable lessons.

Baron Davis dives into the transformative potential of AI, VR/AR, and digital assets, while Dax Da Silva of Lightspeed shares how energy and spirituality fuel leadership. Nicolas Mulroney reveals the grit it took to pitch 80 investors to launch his bakery venture, and Winter Mead explains how Coolwater Capital is building the next generation of venture fund managers.

Tom McCullough of Northwood Family Office discusses what it takes to thrive in wealth management, and Mario Nigro shares strategies for navigating high-stakes M&A negotiations. Arati Sharma and Satish Kanwar offer a critical lens on Canada's innovation landscape, calling for affordability and optimism to drive entrepreneurial growth. Finally, John Rikhtegar delivers data-driven insights into the past decade of Canadian venture exits, revealing how market cycles shape success.

Enjoy and see you next week with fresh insights and a new interview.

Key Highlights and Timestamps

Featured Guests

* Baron Davis: The Future of AI and Life Lessons

* (00:01:45) Explores trends in AI, VR/AR, and tokenized digital assets, including his innovative "OATMills" project.

* (00:04:00) Favorite books: Rich Dad Poor Dad and Outliers.

* Lesson: “Be happy with what you have, and good people will surround you.”

* Nicolas Mulroney: Resilience in Entrepreneurship

* (00:05:13) Shares how he overcame 50+ rejections while securing funding for his bakery in a challenging market.

* Lesson: “It’s an election you have to win. There’s no other option.”

* Winter Mead: Supporting Emerging VCs

* (00:08:00) Highlights Cool Water Capital’s program to develop first-time fund managers, focusing on operations, fundraising, and fund management.

* Lesson: "Fund management isn’t just about investing—it’s about running a business."

* Mario Nigro: Successful M&A Strategies

* (00:24:00) Offers advice on managing complex negotiations, emphasizing communication and trust.

* Lesson: "Most deal problems can be solved by better understanding the other side."

* Arati Sharma & Satish Kanwar: Revitalizing Canadian Innovation

* (00:29:00) Discuss Canada’s innovation challenges and opportunities.

* Arati: Calls for affordability to enable young entrepreneurs.

* Satish: Stresses the importance of belief, optimism, and community building.

* Tom McCullough: Redefining Wealth Management

* (00:35:00) Advises aspiring family office founders to focus on client needs and solve real problems.

* Lesson: “Understand demand and build something that fills a gap.”

* John Rikhtegar: Venture Capital Insights

* (00:46:00) Analyzes a decade of Canadian venture exits, revealing that over 50% of exit value occurred in 2020-2021.

* Lesson: "Consistent capital allocation is critical for navigating market cycles."

* Dax Da Silva: Energy, Fitness, and Leadership

* (00:59:28) Discusses how fitness and spirituality fuel his leadership and entrepreneurial resilience.

* Lesson: "To get energy, you must first put energy in."

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Matt Cohen and John Ruffolo tackle the seismic shifts in Canada’s political landscape, discuss the recent fall economic statement, and make bold predictions for 2025.

Topics covered include Chrystia Freeland’s unexpected resignation as Finance Minister (00:41), highlights from the Federal Budget (03:39), speculation about Canada's election timing (09:18), and how this government looks to the incoming US administration. The discussion also covers the growing "100 Million Dollar Club" in Canadian tech and debates the IPO prospects for leading startups (12:00). And John and Matt give rapid-fire predictions for 2025 (18:00).

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In this episode of Tank Talks, host Matt Cohen and John Ruffolo discuss the latest developments in venture capital, technology, and innovation. Topics include the Canadian government’s proposal to encourage pension fund investments in startups, the challenges entrepreneurs face in scaling businesses, and the systemic capital constraints within Canada’s ecosystem.

The conversation highlights Sheertex founder Katherine Homuth’s journey and the broader difficulties of pursuing ambitious ventures in Canada. They also cover Raptor Maps’ use of AI for solar farm efficiency, the resurgence of quantum computing with D-Wave’s latest funding, and the emergence of layered SPVs investing in high-demand companies like SpaceX and OpenAI. The episode closes with an analysis of ServiceTitan’s IPO and its implications for the reopening of the IPO market.

(00:46) The Canadian Mini-Budget and Venture Capital

* $2B package to support startups and scale-ups

* Discussion on U.S. influence on Canadian investments and government initiatives

(03:00) Economic Realities for Canadian Startups

* John highlights Canada’s capital constraints and increased tax concerns

(05:00) Sheertex and Katherine Homuth’s Moonshot Journey

* $35M funding round led by Investissement Québec

* Challenges in scaling operations and media scrutiny

* The uphill battle of Canadian entrepreneurs pursuing ambitious goals

* Read her article here

(12:44) Raptor Maps and Solar Innovation

* $35M raised to enhance solar energy management through AI and drones

* Predictive maintenance and operational efficiencies in the solar sector

(17:23) Quantum Computing Resurgence

* D-Wave raises $175M as Google advances with its Willow chip

* Global implications of quantum on industries and geopolitics

(21:00) Double-Layer SPVs: Opportunity or Risk?

* The rise of SPVs investing in other SPVs for firms like SpaceX and OpenAI

* Risks of layered fees and opaque ownership structures

(23:28) ServiceTitan IPO and the IPO Market Rebound

* ServiceTitan’s valuation debate following its $101/share IPO

* Implications for the reopening of the IPO window

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Matt Cohen sits down with Rebecca Kacaba, Co-Founder and CEO of DealMaker, a groundbreaking platform transforming how companies raise capital. Rebecca shares her journey from her entrepreneurial family background and legal expertise to spearhead innovation in the fundraising space.

The conversation covers how DealMaker democratizes capital access, enabling individuals to invest in brands they love. The discussion also touches on the impact of regulations like the JOBS Act, the role of community and marketing in successful capital campaigns, and the future of AI in streamlining complex fundraising processes.

Rebecca also opens up about her experiences as a female CEO in a male-dominated industry, scaling a fintech startup, and her vision for how retail capital will reshape ownership in the coming years.

About Rebecca Kacaba

Rebecca Kacaba is the CEO and co-founder of DealMaker, a tech company that helps businesses raise money online. DealMaker has helped companies raise over $1.7 billion from 650,000 investors, making it one of the fastest-growing companies in Canada. Rebecca’s goal is to make it easier and fairer for people to invest in businesses they believe in.

Before starting DealMaker, Rebecca worked as a lawyer for over ten years, specializing in helping companies with capital markets and mergers. She also worked at the Ontario Securities Commission, where she helped with important rules and policies for investments. Her background in law helped her create new tools for companies to raise money more efficiently.

Rebecca earned her Bachelor of Arts in Psychology from Western University and her law degree (LLB) from the University of Windsor.

Fast Favorites

* Favorite Podcast: All-In Podcast

* Favorite Bestie from All-In: Chamath Palihapitiya

* Favorite Newsletter or Blog: Morning Brew

* Favorite Tech Gadget: iPhone

* Favorite New Trend: The democratization of capital

* Favorite Book: Elon Musk's Biography

* Favorite Life Lesson: "Failure is not a thing."

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Matt Cohen and John Ruffolo discuss John’s OpEd on building a prosperity agenda for Canada, becoming a better ally to the US, the announcement of the Sovereign AI fund, and key developments in venture capital, including ServiceTitan’s IPO challenges and the implications of recent lawsuits against OpenAI.

(01:13) Canada’s Prosperity Agenda and Economic Priorities

John Ruffolo delves into his op-ed advocating for federal government spending reforms, tax system simplification, and fostering innovation to secure Canada’s future prosperity.

* Key Points:

* Canada must address federal debt, currently projected at $1.4 trillion.

* Simplifying and aligning taxes with U.S. competitiveness could enhance productivity.

* Innovation requires leveraging Canada’s relationship with the U.S. in energy, minerals, and defense strategies.

* John’s Insight: “Canada’s size means we must strategically use our strengths to negotiate with global powers, especially the U.S.”

(06:14) Friend-Shoring: A Strategic Opportunity for Canada

Matt and John discuss the concept of “friend-shoring,” where allied nations reshape supply chains to reduce reliance on adversarial countries like China.

* Definition: Using partnerships to onshore critical technologies and manufacturing.

* Canada’s Role: Access to minerals, energy, and a coordinated defense strategy make Canada an ideal partner for the U.S.

* John’s Take: “Canada’s future will be closely tied to the U.S. This is a chance to secure innovation access and consumer market integration.”

(12:35) Canada’s AI Sovereignty Strategy

The federal government unveiled its $2 billion AI Sovereign Compute Strategy to enhance AI infrastructure across Canada.

* Allocation Highlights:

* $1 billion for public computing infrastructure.

* $700 million for private sector and academia collaborations.

* $300 million for affordable AI compute access for small businesses.

* Criticism: Concerns about execution and whether funds should directly support existing private solutions like AWS or Google Cloud.

* John’s Perspective: “Supporting infrastructure is crucial, but tax credits for private spending might have been a better approach.”

(18:02) OpenAI Faces Canadian Copyright Lawsuits

Major Canadian media organizations filed a lawsuit against OpenAI, claiming their content was used without permission for AI training.

* Details: Plaintiffs include CBC, Globe and Mail, and Postmedia, seeking $20,000 per infringed work.

* Implications: Rising copyright costs could fundamentally alter large language model economics.

* John’s View: “This highlights the need for a framework to balance creator rights and AI development.”

(21:45) ServiceTitan’s IPO Challenges

ServiceTitan’s IPO faces scrutiny due to its compounding ratchet clause, which dilutes employee ownership.

* Background: IPO valuation set between $52-$57 per share, well below prior funding rounds.

* Key Impact:

* Employees face tax consequences on overvalued RSUs.

* Preferred investors benefit from a 1x preference redemption and additional shares.

* John’s Take: “The lack of valuation adjustments in prior rounds leaves employees holding the bag. This is a cautionary tale for structuring future investments.”

(28:19) Legacy VC Exits and Emerging Manager Struggles

Brian Singerman, a Founders Fund partner, transitions to partner emeritus, reflecting challenges in the current VC landscape.

* Key Observations:

* Spinout managers face difficulty raising funds amid institutional risk aversion.

* Established partners are stepping back due to tougher market conditions.

* John’s Insight: “VC investing is hard work. The market is returning to normalcy after years of overfunding during the zero-interest era.”

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Matt Cohen welcomes Mitch Debora, the Co-Founder and CEO of Mosaic Manufacturing, a pioneer in the field of additive manufacturing and 3D printing. Mitch shares insights into how Mosaic is transforming global supply chains with innovative 3D printing solutions, particularly in the wake of COVID-19, which exposed the fragility of traditional supply chains.

The discussion dives into Mosaic’s latest innovation, the Array system, which enables continuous automated production at scale. Mitch outlines the environmental and economic advantages of additive manufacturing, its applications in diverse industries such as medical devices, textiles, and consumer goods, and Mosaic's vision for a sustainable future of localized production.

The conversation also touches on Mosaic’s $28M growth equity financing round led by Idealist Capital, signaling the company's ambitious plans for expansion and innovation.

About Mitch Debora:

Mitch Debora is the Co-Founder and CEO of Mosaic Manufacturing, a leader in advanced polymer-based multi-material additive manufacturing solutions. He also serves as an Additive Manufacturing Advisory Board Member at NGen Canada. With expertise in digital manufacturing and supply chain innovation, Mitch focuses on strategy, growth, intellectual property, and engineering. His earlier ventures include founding Vivid 3D, offering professional-grade 3D printing services. Mitch earned his Bachelor of Applied Science in Mechanical Engineering from Queen's University, where he also developed a deep interest in 3D printing.

Topics discussed:

(01:32) Mitch’s Journey into Entrepreneurship02:30) Inspiration Behind Mosaic(08:09) Impact of COVID-19 on Supply Chains(11:49) The Array System: Revolutionizing Manufacturing(15:48) Future of 3D Printing(18:24) AI in Additive Manufacturing(23:00) Environmental Benefits of Additive Manufacturing(26:34) 3D Printing at Home(31:40) Mosaic’s Recent Funding Round

Fast Favorites:

Favorite Podcast: How I Built This by Guy Raz

Favorite Blog: Mosaic’s Blog

Favorite Tech Gadget: 3D printers

Favorite New Trend: Betting culture as a predictive data source

Favorite Book: The Age of Spiritual Machines by Ray Kurzweil

Favorite Life Lesson: "You don't know what you don't know."

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Matt Cohen and John Ruffolo discuss Neo Financial’s $80M funding and the concerns surrounding Tencent’s involvement, Hopper’s layoffs as it pivots to B2B partnerships, and Elon Musk’s dual moves with his Department of Government Efficiency and X.AI’s stock offering. They also explore the implications of ServiceTitan’s IPO ratchet clause and Wealthsimple’s $100M secondary share purchase ahead of a potential IPO.

(01:13) Neo Financial’s Tencent Controversy

Neo Financial’s $80M equity financing revealed Tencent Holdings as a lead investor, sparking concerns about Chinese involvement in Canadian financial services.

* Tencent is a passive investor with no board seat or sensitive data access, but the lack of transparency raised questions.

* John’s Take: “If safeguards are in place, why not openly embrace a credible investor like Tencent? Mishandling the PR has fueled unnecessary suspicion.”

(04:39) Hopper’s Layoffs and Strategic Pivot

Hopper cuts 10% of its workforce, following a 30% reduction last year, as it shifts focus to B2B partnerships with firms like Capital One and Uber.

* B2B now accounts for two-thirds of Hopper’s revenue.

* John’s Analysis: AI could transform Hopper’s operations, but revenue compression and dependency on Expedia create challenges.

(09:53) Musk’s Moves: DOGE and XAI

Elon Musk enlists Sriram Krishnan for his Department of Government Efficiency (DOGE) initiative while leveraging his X.AI venture to benefit Twitter investors.

* DOGE: Musk’s team focuses on reducing government inefficiency through red tape reduction, technology adoption, and spending optimization.

* X.AI Stake Offering: Musk grants a 25% stake in X.AI to Twitter investors to offset valuation losses post-acquisition.

* John’s Insight: “Musk is creating an interconnected ecosystem where partners benefit from his entire portfolio, a brilliant move to maintain loyalty and long-term value.”

(06:00) Wealthsimple’s Secondary Transactions

Wealthsimple purchased $100M in employee shares at a $5B valuation, positioning for a potential IPO.

* Signals: Minimal gap between common and preferred shares indicates readiness for public markets.

* Performance: Reportedly cash flow breakeven, driven by a strong crypto portfolio and $8B AUM.

* Matt’s Take: “This secondary move shows maturity and sets the stage for long-term growth under new leadership.”

(18:29) ServiceTitan’s Ratchet Clause and IPO Impact

ServiceTitan’s IPO is propelled by a compounding ratchet clause from its Series H funding.

* What’s a Ratchet? Investors get more shares if IPO valuation falls below a set threshold, diluting existing shareholders.

* John’s Take: “Compounding ratchets penalize employees and distort economic interests. They’re a clear sign of investor concerns during the funding crunch.”

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Matt Cohen interviews Jayesh Parmar, founder of Picatic, a ticketing platform acquired by Eventbrite, and current wellness innovator with Gunkii. Jayesh discusses building a startup in Saskatoon, navigating challenges, competing against incumbents, and lessons learned from scaling a company. He also shares insights into his current venture, Gunkii, and his contributions to the startup ecosystem.

About Jayesh Parmar:

Jayesh Parmar is the Co-CEO and founder of Gunkii, a wellness brand launched in 2021 that focuses on luxury tongue scrapers. He is responsible for leading product innovation and strategic growth in the oral health space.

Previously, he was at Eventbrite after acquired his startup, Picatic a global event ticketing platform serving 46 countries, known for its innovative pricing models. Earlier, Jayesh founded Boom Music, an event production and live music management company, which he ran from 1997 to 2011. He also spent over a decade as a teacher with Saskatoon Public Schools.

Jayesh holds a bachelor’s degree from the University of Saskatchewan.

Discussion Highlights:

* 00:20 Founding Picatic: Competing with Eventbrite using innovative pricing models

* 00:37 Early challenges of building a startup: Funding, market confusion, and team building.

* 02:11 Scaling from Saskatoon and the role of accelerators in San Francisco, Toronto, and New York

* 03:44 Competing with Eventbrite: Pay-What-You-Want and freemium pricing models

* 09:00 The importance of "dogfooding" in refining Picatic’s product

* 16:32 Celebrating milestones like reaching $10 million in sales

* 18:50 The Eventbrite acquisition: How it happened and preparing for M&A

* 21:00 Practical advice: Keeping a clean data room and leveraging exited founders as advisors

* 27:13 Mentorship and giving back to the startup ecosystem

* 28:31 Viewing failure as a data point and using it to improve

* 31:00 Creating Gunkii: A wellness product inspired by cultural heritage

* 33:24 What’s next: Supporting startups as a mentor and advisor

Fast Favorites:

* Favorite Podcast: All In

* Favorite Newsletter: Lenny’s Newsletter

* Favorite Tech Gadget: Boardy.ai

* Favorite New Trend: Wellness-focused retreats for entrepreneurs

* Favorite Book: Principles by Ray Dalio

* Favorite Life Lesson: “Your presence matters more.”

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Matt Cohen welcomes back John Ruffolo, of Maverix Private Equity, for a discussion on Neo Financial’s recent funding round, the state of IPOs, antitrust actions against Google, the dominance of NVIDIA in AI hardware, and the speculative nature of MicroStrategy's Bitcoin strategy.

* (00:55) Neo Financial's $362 Million Series D RoundAnalysis of the Calgary-based challenger bank's latest financing round, including a significant valuation drop since 2022 and insights into structured equity and debt financing.

* (03:20) Fintech Valuation ResetsJohn reflects on the aggressive valuations during 2019-2021 and applauds founders navigating down rounds responsibly.

* (06:22) Klarna and IPO TrendsDiscussion of Klarna's IPO and broader market activity, including ServiceTitan's filing and a potential boost in M&A and IPOs.

* (08:47) Antitrust Pressure on GoogleThe DOJ's push to dismantle Google's Chrome browser and Android dominance, its implications for AI development, and the historical irony compared to Microsoft's Netscape case.

* (12:49) NVIDIA’s Dominance in AI HardwareExploration of NVIDIA’s record-breaking revenues, its chokehold on AI compute, and the challenges potential competitors face.

* (15:46) OpenAI’s Costs vs. RevenueA deep dive into OpenAI's staggering operational costs and projected losses for 2024, highlighting the high stakes of AI innovation.

* (16:45) MicroStrategy’s Bitcoin StrategyDiscussion of MicroStrategy’s Bitcoin-heavy balance sheet, its valuation compared to its holdings, and parallels to previous financial collapses.

* (19:00) Final Thoughts and TakeawaysJohn reflects on exuberance in speculative markets and the risks of over-leveraging in volatile assets like Bitcoin.

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Matt Cohen and John Rikhtegar of RBCx discuss the insights from Rikhtegar's report on capital exited in Canadian venture capital over the past decade. They talk about the importance of understanding capital efficiency, market cycles, and the power law in venture exits.

John emphasizes the need for a comprehensive view of the venture ecosystem, focusing on capital allocated, invested, and exited. The discussion also the current state and future of Canadian venture capital, emphasizing the importance of capital efficiency, the challenges of growth at all costs, and the evolving landscape of funding. They analyze data on exit values and funding ratios between Canada and the US, highlighting the need for Canadian investors to adapt their strategies to achieve better outcomes.

And John Ruffolo from Maverix PE stops by to discuss the week’s news.

About John Rikhtegar:

John Rikhtegar is the Director of Capital at RBCx, where he leads investments in venture capital funds and startups, while driving strategic initiatives to enhance transparency and value in Canada's private markets. With a focus on supporting the venture ecosystem, John has played a key role in fostering innovation and growth across the country.

Before joining RBCx, John built an impressive career in tech and operations. He held senior leadership roles at Kognitiv Corporation, guiding strategic transformations in Canada and the UK, and was part of the founding team at VaynerCommerce, leading revenue growth in the UK and EMEA. At Shopify Plus, he worked with high-growth, enterprise-level merchants, helping scale some of the world’s most innovative brands.

John holds an Honors Business Administration (HBA) degree from the Ivey Business School at Western University

News Rundown with John Ruffolo

(01:00) Analysis of Q3 2024 Canadian venture capital activity: Record-breaking headline numbers but troubling declines in early-stage domestic investment.(03:00) Impact of Canada’s capital gains tax increases on angel investments and early-stage startups.(05:23) U.S. investment dominance in Canadian deals and the challenges for domestic capital raising.(10:50) Klarna’s rebound after valuation cuts as a roadmap for startups navigating downturns.(12:35) Databricks' secondary funding move and the tension between liquidity needs and IPO delays.(16:50) Public-private sector collaboration in the U.S. and lessons Canada could adopt for governance efficiency.

Interview with John Rikhtegar

(20:20) John Rikhtegar’s career journey: From Shopify to VaynerMedia to leading RBCX Capital.(24:30) The origins of the Spotlight report and why analyzing capital exited, not just invested, is critical to understanding venture ecosystem health.(28:00) Market cycles and their impact on liquidity, with 2020-2021 generating 50% of Canada’s total exit value over the past decade.(30:26) The power law in Canadian venture exits: The top 50 exits accounted for 85% of all exit value.(32:00) Capital efficiency and its implications for founders, GPs, and LPs: Why bigger isn’t always better.(36:00) Canada’s advantage in building capital-efficient companies due to constrained resources compared to the U.S.(38:00) Practical advice for investors: Staying disciplined on entry prices and prioritizing ownership-sensitive investments in early-stage companies.(46:08) Comparing Canada and U.S. capital efficiency: Lessons learned and the importance of scaling the 1.6x efficiency ratio for Canadian venture capital.

Fast Favorites

Favorite Podcast: 10X Capital by David WeisbergFavorite Newsletter or Blog: Clouded Judgment by Jamin BallFavorite Tech Gadget: Garmin WatchFavorite New Trend: Cooking at homeFavorite Book: The Score Takes Care of Itself by Bill WalshFavorite Life Lesson: Don’t worry about things outside of your control.

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