Ex-RBC, Lightspeed executives join Framework as it raises second VC fund in bear market

Two former bank executives and the former head of technology and product at point-of-sale software company Lightspeed have joined Framework Venture Partners, as the startup financier tries to raise its second fund in tough economic times.

Two of the newcomers have joined Framework as partners: Jim Texier, a tech industry veteran who left Lightspeed LSPD-T last August, and Barbara Dirks, former head of Royal Bank of Canada RY-T, Bank of Montreal BMO-T and the Canadian branch of Silicon Valley Bank. Mike Dobbins, former group head of RBC Ventures and business development at Royal Bank, has become a venture partner, meaning he will work on Framework’s behalf with the companies it backs.

They join partners Peter Misek, who co-led the Business Development Bank of Canada’s Framework spin-out in 2018, and Ajay Gopal. Framework’s other founding partner Andrew Lugsdin has stepped down from his day-to-day role but still represents the company on select boards.

The new partners have joined Framework as it raises its second fund, aiming to raise US$250 million to support startups. The fund closed on US$100 million from former Framework investors at the end of 2021 and has until December to complete fundraising.

Mr Misek said fundraising is “10 times harder” than in previous years as many institutional investors now take a wait-and-see approach. “Whenever there’s so much uncertainty in such a short time, the first and right response, when you don’t know what to do, is to sit still,” he said.

Framework raised $105 million for its first fund in 2019, falling short of its goal of $150 million. The fund – which was backed by BDC, RBC, Cadillac Fairview and Kensington Capital – performed well on paper, earning an average internal rate of return of 97%, according to Pitchbook. Two of its 11 companies hit “unicorn” valuations of US$1 billion or more as the market peaked in the past year: Montreal-based “text-tutoring” startup Paper Education Co. Inc. and the San Francisco-based identity verification software. supplier Incode Technologies Inc.

The tech sector is facing its toughest time since the dot-com bubble burst in the early 2000s. Valuations plummeted and waves of layoffs hit the sector as unprofitable start-ups cut costs to preserve their cash. Inflation, rising interest rates and a deteriorating economic outlook contributed to a slowdown in venture capital investment and revised valuation expectations.

Nonetheless, Framework partners struck an optimistic note during interviews. “There are a lot of positives in a bear market,” Mr. Texier said. “There’s no more hype, no more distraction” and no more talent available.

Gopal said “the pipeline is strong and full” of promising startups. “Most funds are sitting on their hands and waiting; we take the opposite approach – we look at the market, look for opportunities and engage with startups,” he said.

The company does this with extensive operational experience within its team. Mr Dobbins described himself as “a partnership builder”.

“I wanted my network and banking experience to add to the venture capital investment part,” he said.

Ms. Dirks comes to venture capital after a career that included periods as Chief Learning Officer and Chief Operating Officer of BMO’s North American Commercial Banking Services. The lawyer by training led the Canadian operations of Silicon Valley Bank in the late 2010s. She also had a brief tenure as CEO of PACE Savings and Credit Union in 2020 which ended with her resignation and the entire board after their attempts to topple the scandal-ridden institution hit turmoil over escalating disputes with an Ontario financial authority that picked them. for their positions.

Ms Dirks described herself as a generalist who likes to switch between roles to “reshape a business, cut costs, expand or launch something”. She said she has enjoyed the variety and vibrancy of venture capital since joining Framework in 2021, initially as an executive-in-residence.

“I think it’s the perfect time to embark on the adventure,” she said. “We are still quite optimistic about the future.”

Framework invests in North American software and software-supported market companies that have achieved initial success with products in the market. It makes investments of 4 to 10 million US dollars each.

Your time is valuable. Receive the Top Business Headlines newsletter in your inbox morning or evening. register today.

Leave a Comment

Your email address will not be published.