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How Does A Venture Capital (Growth Equity) Firm Work? | Simon Chong of Georgian Partners

Simon Chong, Partner at Georgian Partner shares what it takes to run an equity (venture capital) firm, invest in high growth tech-companies, and manage risk.

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Guest Bio

Simon Chong is a Managing Partner at Georgian Partners, which he co-founded in 2008.

Having spent his career in marketing, sales management, and operations, Simon applies his strong operating background to the companies in which Georgian Partners invests. He is focused on designing and building optimal go-to-market models for Cloud and SaaS-based companies.

Simon holds an MBA from Henley Management School in the United Kingdom.

Current investments: Dealfind, Terapeak, Razorsight and ScribbleLive.

Things You Will Learn In This Interview

Simon Chong is a founding partner at Georgian Partners, which is a growth stage equity firm.

This is a unique interview for a couple of reasons – firstly because this was my first in-person interview and I got to learn how to do that (I will definitely bring a lapel mic the next time I do an in-person interview); secondly I got the opportunity to pick the brains of a real-world venture capitalist and ask all sort of questions about how does an equity firm work, their business model, their process of choosing how to invest, and making profits and so on.

Venture capital (VC) and raising funds is an area that I had never explored in detail previously (only from an entrepreneur’s perspective in some of my previous interviews). It is great to learn about the VC’s perspective, their interests and motivations. I think it is a very valuable interview for any entrepreneur thinking about raising funds for their startup or venture. Some of the questions and topics discussed are as follows:

      • Georgian Partners is a growth stage equity firm. How is it different from an early stage equity firm? Are there lower risks involved in investing in a growth stage company? Does it impact the economics of the kind of returns that the equity firm expects to make (as opposed to a firm investing in an early stage company with greater risks involved)?
      • Why Applied Analytics?
      • Can you tell us a bit about the business model of how equity firm operates/makes money?
      • What does it take to start an equity firm? What kind of backgrounds/ track records do the partners need to have?
      • What is the process of raising funds, i.e. how does Georgian Partners raise funds to invest in companies? How often do you raise funds and how difficult is it?
      • What does the life of a fund look like; i.e. timeline of raising funds to investing in companies?
      • How does Georgian Partners go about identifying potential investment opportunities?
        • Are you always looking for potential investment opportunities?
        • I would assume that there are only be a limited number of companies within the Applied Analytics space, are you already familiar with all of them and looking for the right time to invest?
        • Do you invest outside of Canada?
        • How often do potential companies approach Georgian Partners seeking investment? How does that happen? Do they come through an introduction/referral, or through other means?
        • What are the most important factors that you look for in a company before making an investment decision?
        • Is there a negotiation process involved and how do you come up with the dollar amount and percentage equity (valuation)?
      • What kind of support does the equity firm provide to the company/founders after a deal is made?
      • What are the liquidation situations and what does it take to make a liquidation decision?
      • What does a regular day look like for you as a managing partner, your day-to-day responsibilities etc.?

And lots more…

People, Book Recommendations, and Resources of Interest Mentioned In This Interview

1. Shopify

2. Justin LaFayette

3. 41STPARAMETER

Your Turn>>

Do you have some experiences with raising funds for your startup or company? Please share your comments, questions, experiences in the comments section below.

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How Does A Venture Capital (Growth Equity) Firm Work? | Simon Chong of Georgian Partners

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