The Case for Public Venture Capital with Ari Pandes – Ep. 64



SUMMARY

Ari Pandes, Associate Professor at the Haskayne School of Business has published numerous papers on the capital markets with a focus on early-stage venture financings. Ari is a champion of the public venture capital system in Canada, although it could be argued that private venture capital and public venture capital are very comparable sources of funding. He has researched numerous aspects of the financial markets as well the levers of success for both private and public companies. The findings he’s had are thought-provoking for any entrepreneur!

“With public venture capital, you’ve got the benefits of all the things that public markets offer.”

Ari also emphasizes the importance of retail investor participation in the venture markets. On both a philosophical and practical level, it is vitally important that retail investors can access and participate in early-stage deals. A lesson for all public company managers is that you should engage and embrace your retail investors because they are a major source of potential liquidity that helps you grow into attracting institutional investors.

Another fascinating part of our conversation is Ari’s recent launch of a student venture capital fund at the University of Calgary, a fund that has closed over $1 million in real capital, which the students are actively investing in early-stage companies.

“We have got about $1.2 million that the students are managing – real money – to invest in
private companies, which I think is super exciting.”

To learn more about this outstanding initiative and the many advantages of the public venture capital system, listen in.

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Key Points From This Episode:

  • Ari talks about his roles at the university and how moving west impacted his research.
  • The difference between public and private venture capital and the pros and cons of each.
  • The benefits of giving more people access to investment opportunities in the public markets.
  • Hear how the public venture capital system promotes transparency and accountability.
  • A comparison of the cost of capital in the private versus public venture capital space.
  • The key takeaways from Ari’s paper on the value of starting on a junior public exchange.
  • Find out how the coherency between the TSX Venture and the TSX facilitates learning and value creation.
  • Thoughts on the fact that the Canadian market is getting a great deal of international interest.
  • Why management teams should embrace the retail audience when working with junior companies.
  • Ari talks about his research and paper on the role of agents in private entrepreneurial finance.
  • Some concerns about the constant push to get private companies to access greater capital.
  • The positive and negative changes that Ari has seen since starting his research in capital markets.
  • Hear about the student venture capital project that Ari created at the Haskayne School of
    Business.
  • The rigorous application process they followed to find the best-suited students for the project.

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