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