Mr. Rod Charko, CEO of Alberta Enterprise Corp (started in Sept 2009), came to Calgary last week to explain to Calgarians what AEC plans to do with the $100 million Alberta government (through AET) has entrusted him and AEC. After the presentation, Rod was very kind and spend more than half an hour with this reporter to answer some questions.
Rod stated clearly that AEC is NOT in the business of investing in individual startup companies. By government mandate, AEC is only allowed to invest in investment funds which may then invest in the startup companies. The funds that AEC is reviewing include funds in ICT, BioTech, CleanTech, and funds that are involve in multiple sectors. One of the investment criteria is the venture funds have to have a partner permanently station in Alberta and opening an office in the province.
In the long run, what AEC is trying to do is to create an environment of which venture capitalists will want to stay and keep investing in Alberta.
Another mandate of AEC is to increases deal-flows by working with Alberta organizations like VCAA (Venture Capital Association of Alberta), the alumni associations of universities, angel investors, mentors, and proven CEOs to help entrepreneurs in Alberta and help connect startup with venture funds.
Startups in Calgary also really need to have expertise, industry advice, board members who have direct experiences in the sectors they want to operate in. For example, medical device startup, Java software startup, solar CleanTech, etc these type of companies all need their own very specialized expertise and advices. The venture funds AEC are trying to bring to Alberta will have the needed connection to expertise in the Valley ready to help these Alberta startups.
To give you some idea, the following are some of the questions I’ve asked Rod. I’ve included the video clips at the end of this article so you can watch Rod answer my questions in his words.
* The funds AEC look at, are they VCs in Alberta, in Canada or in US (e.g. Silicon Valley)?
* AEC is trying to create a culture like the Valley here in Alberta. Will Calgary and Edmonton be featured or emphasized equally? Or does it matter? (short answer: AEC doesn’t tell VCs where to setup shop.)
* So your job is to find a good VC with a good track record that you can trust?
* How do you define metrics of success when their recent past performance may not be that good? (short answer: good fund managers have history of deal-flows, lessons learned from good and bad deals, operating experiences in startups and sectors they are addressing.)
* I asked Rod to talk about his background (Rod used to be an investment fund manager).
* Have you worked with this team of AEC people for years before? How many AEC people are there (excluding admin staff)?
* What does AEC plan to do to enhance the entrepreneurship environment in Alberta? Is this a long term thing that AEC will involve? (short answer: AEC’s philosophy is to have private industry own the ecosystem and deal-flow over time.)
* Does AEC have a website, a blog, etc to keep people informed? (short answer: only very high level information at AEC’s website, don’t really want to be a clearing house of information because Rod believes these are better done by private industry).
* The AEC arranged presentation and round table discussions can be recorded for wider viewing?
* How does the AEC funding process work? How long will it take AEC to deploy/invest the $100 million? How will the money trickle out to the investment funds to invest? Explain some of the industrial practice of how the system work (“cash call”, “calling money”, etc).
* AEC is a crown corporation, how does Rod make it transparent and accountable to Albertans? (short answer: AEC is an arms-length corp with an independent board of directors, report to Minister of AET.)
* AEC was started in Sept 2009, when will the first investment expected to be made? (short answer: looking at 35 already, deep due diligence with a few funds, possibly first investment in first quarter.)
* (clip 3, time code 3:05)What will be a happy picture (or ideal scenario) for AEC in ten years?
* Have other jurisdictions in the world been successful in duplicating the success of Silicon Valley?
* A discussion of education. The idea of teaching engineers, scientists, and people in other fields about business seems more viable than teaching business grads about technologies. Rod also talking about models that he is trying to follow (e.g. the Stanford example).
The following are video clips of my interview with Rod in three segments.