Michel Brûlé was one of the first super angels in Canada.
Currently the president of Investments M&M, he has pursued careers in both academia and business over the past 20 years. He has been involved with the founding of six technology companies (InnoMediaLogic was the best VC deal of 2000).Through private venture capital fund investments, Mr. Brûlé has helped grow several startup companies and create three generations of spin-offs. He is very active in the Réseau Anges Québec and was named Canadian Angel Investor 2010 by the National Angel Capital Organization. He is on the Board on Investissement Québec and Omers Ventures Advisory Board.
During his journey in the angel investor profession, Mr. Brûlé says learned that “Being good in sales doesn’t necessarily mean being good in business." He uses the phrase “I joined the dark side of the force” to explain his entry into the VC and angel investing business.
Mr. Brûlé suggested at the CVCA annual conference last week that “Canada could move from being best in the world in some sub-markets to becoming world-dominant size-wise in a market, which is a different strategy that involves a new set of challenges and skills."
The making of tech hunters could have many positive consequences to the Canadian economy. Having more predators than prey in mergers and acquisitions would mean bigger firms, better quality jobs, important headquarters, increased demand for local suppliers, and positive indirect effects on the rest of the economy. “Why not more outbound mergers and acquisitions in technology in Canada?” he asks.
In 2011, the ratio was two Canadian acquisitions for one foreign acquisition of a Canadian firm. However, most of the Canadian predators were in the financial services industry.
In the fourth quarter of 2010, there were 15 tech acquisitions by Canadian firms versus 27 in Q4 2011. That is an important improvement, but Mr. Brûlé thinks Canada can still do much better. “With only 5% more M&A with Canadian hunters in the pipeline we could create a lot of value."
He offers as an example some statistics to support his analysis: around 16% of a VC portfolio is made up of champions (or home-runs investments). To increase that number would bring a big boost to the Canadian economy.
However, Canada must update the skills of its entrepreneurs in order to reach that goal. Mr. Brûlé suggested the implementation of a “Hunter making university,” where entrepreneurs could get Entrepreneur 301/401 types of courses. “We need a business owner mentality with a better risk management," he believes.
He offered also some solutions to support the implementation of the idea of developing more tech hunters such as secondary transactions such as life insurance to the entrepreneurs and some better selected exit strategies to some early investors to help the growth of the firm. Some “H-funds” could promote the development of tech hunters through buyback of problematic early investors, by supporting growth plans and intelligence, by leading participants in financing rounds, and with more Buy and Hold LPs.
He concludes that public markets can offer some problems with more pressures to deliver short–term returns, but that there are also “Godsend cash opportunities to finance hunting campaigns."