Building an everlasting Evergreen fund with George Rossolatos, CEO of Canadian Business Growth Fund (CBGF)

  
0:00
-41:25

Our guest today, George Rossolatos, is the CEO of the Canadian Business Growth Fund (CBGF), which is an evergreen fund. Evergreen funds, or sometimes referred to as open-ended funds, are different than closed-ended funds which are the most typical structure we see in venture capital. With evergreen funds, capital is invested directly into an LLC on an ongoing basis with no termination date meaning they live on FOREVER!

We talk with George about this unique position in the market as Canada’s first growth equity evergreen fund, the startup environment, and what Canada needs to do to keep its most innovative companies from receiving funding elsewhere.

About George Rossolatos:
As CEO of the Canadian Business Growth Fund (CBGF), George is responsible for developing the Fund’s national launch strategy, talent recruitment and the leadership and oversight of its investment activities.

Previously, he served as CEO at Avante Logixx, a publicly-traded security and technology company, where he oversaw the company’s successful turnaround and growth strategies. Prior to that, he held leadership roles in private equity, first at Harrowston (acquired by TD Capital) and then at TorQuest as Co-founder and Partner where he launched the Fund’s $180 million Value Fund in 2002 and its $550 million Value Fund II in 2006.

In addition to a degree in Commerce from Queens University, he has an FCPA Designation and an MBA from the Kellogg School of Management at Northwestern University with a specialty in Marketing, Entrepreneurship & Technology. He was previously recognized with the Top 40 Under 40 award, recognizing young business leaders.

In this episode we discuss:

01:56 Why CBGF decided to go with an evergreen fund as a structure

03:21 From an LP perspective how does an evergreen fund look different from a traditional investment fund

04:44 The types of investors that are LPs in CBGF

05:34 Where the idea for an evergreen fund started

07:24 Advantages and differences between CBGF and traditional VC funds

09:34 Strategic differences between evergreen and other funds

11:04 The transparency of management fees with an evergreen fund

12:10 The benefits of of awarding carry to evergreen fund employees to attract and retain talent

13:15 The challenges of running an evergreen fund

16:58 How entrepreneurs view taking money from a CBGF versus more traditional funds

19:47 Was an evergreen structure formed because of the nature of the LP base, or was the LP base attracted to the fund because it was an evergreen fund?

21:39 How CBGF manages relationships with its portfolio companies and its LPs

22:43 How Net Asset Value (NAV) is calculated at CBGF

24:17 Where CBGF likes to be positioned on the cap table

25:25 How returns compare historically between evergreen and traditional funds

28:10 Deal competition in the current market

30:46 Price sensitivity in their deal analysis

32:22 How CBGF manages co-investments with their LP base

33:54 Where they see exits for their companies

35:57 How CBGF views the long term for the fund itself

37:55 The state of the Canadian startup ecosystem

Fast Favorites:
Podcast

Kwik Brain with Jim Kwik

Newsletter/Blog
John P. Hussman’s Market Comment

Gadget
Kindle

New Trend
Virtual Meetings

Book
Getting to Yes: Negotiating to Agreement, Without Giving In by Roger Fisher

Follow Matt Cohen and Tank Talks here!

Podcast production support provided by Agentbee.Agency