(October 12, 2017)
Matthew Leibowitz is a Partner at Plaza Ventures. He is a seasoned early stage institutional tech investor having originated, managed and completed dozens of transactions.
Matthew arranged significant private placement financings for PE and tech investments. He is a frequent public speaker on tech start-ups and venture capital. He sits on the boards of several companies, accelerators, and charities.
We sat down recently with Matthew to chat about his experience as a VC in the startup and SaaS spaces as well as what he’s most looking forward to at this year’s SaaS North.
CAN YOU TELL ME A LITTLE BIT ABOUT YOURSELF, YOUR ORIGIN STORY AND HOW YOU FOUND YOUR WAY INTO INVESTING, PARTICULARLY IN THE SAAS SPACE?
I’m a career venture capitalist. I was hired right out of law school and have been a VC for ten years now. I went to law school, got my master’s degree in tech and finance at the University of Toronto and hit the ground running shortly after that.
Where it showed up for me early on in life was inside the pages of a National Geographic magazine way back when I was fifteen years old. I had read an article about clean tech (solar, geothermal, tidal, etc.) and had the thought, “This is pretty cool. Tech is changing the world AND you can make money doing it… that’s interesting!”
Around 1994 – 1995, I began refocusing my efforts and experiences around the tech space. I knew that I wanted to be an investor in technology and use it to change the world but I wasn’t 100% certain what that meant at the time. However, my interest was piqued and I knew that I needed to get involved.
After graduating law school around the age of 27, I came home with my shiny degree and figured that I’d just be given millions of dollars to make investments in clean tech. Who knew that it wasn’t quite that easy and required a network of people to make it happen? So, I began networking like crazy. I heard a lot of “no” responses in those early days and had a rude awakening to what the real world was like but it didn’t stop me. To be honest, I didn’t even know what a term sheet was when I started. However, through my persistence and networking, I got hired and was able to learn everything I needed to know to be the VC I am today.
WHY IS NOW AN EXCITING TIME FOR SAAS COMPANIES AND STARTUPS?
I’m really passionate about the Canadian tech ecosystem and I want to see it succeed beyond our wildest imaginations. I would love to see the innovation economy become THE economy in Canada. Move away from rocks and trees in the ground and use our brains and engineering skills to make the country wealthy.
I’d love to see tech and talent become the drivers of our economy. There are fabulous people involved in this industry and it’s changed dramatically from ten years ago. There’s been a huge shift in the ethos, ethics, people and talent in this space.
In terms of SaaS specifically, it’s never been more capitally efficient to start and run a company and specifically a SaaS-based company. This is mostly because they are tethered to the cloud and costs to operate that type of business have come down tremendously.
Success in this space has a lot to do with marketing and sales and we live in a time when there has never been more literature and learning available to us to help us with best practices.
SaaS companies today, especially those that have been around for awhile, are setting important benchmarks and paving the path for those who are coming up behind them. It’s allowing us to see the data and begin to rely on it. Yes, it’s flexible and fluid year to year but there’s a much clearer picture about how to get where we need to go.
The comparable standards are not new in the SaaS space but if you can build a company that hits or exceeds the KPIs that other SaaS companies are achieving, then it’s a great time to build your SaaS company. With these benchmarks comes attraction from investors, buyers, customers, talent and more.
FROM AN INVESTMENT POINT OF VIEW, ARE THERE MAJOR CHANGES OR SHIFTS HAPPENING IN THE INDUSTRY THAT YOU ARE KEEPING AN EYE ON?
Every couple of years there is a new trend. This year and last year it appears to be AI but if you ask three people to define AI, you’ll get twenty different definitions. For me, it’s about figuring out how to market and talk about each vertical better.
As far as verticals go, there’s some really interesting things happening in healthcare and the digitization of that industry as well as in the larger IoT space – both on the commercial and industrial side.
WHAT DO YOU LOVE MOST ABOUT BEING A VC?
For me, it boils down to the CEOs that I invest in and the investors who invest with me. I love that aspect of this business and I love watching an early stage company with fifty employees go to three hundred employees and how that CEO evolves from a startup, jack-of-all-trades CEO to a CEO with divisions with people reporting to him.
It really is about the journey and not always about the destination.
WHAT ARE YOU LOOKING FORWARD TO AT SAAS NORTH?
This is my first year attending SaaS North and I’m really looking forward to networking with some of the companies and founders that will be there. I also love that these events typically spawn offshoot events where we can gather in a more intimate way.
I’ll likely take in a speaker or two as well as I always like to stay up-to-date on what people are talking about but I’m mostly looking forward to stepping out of my day-to-day here in Toronto, coming to Ottawa and touring around the city. It’s going to be a great time!