Prime for Growth Episode 5 - Kristina Milke, Innovating thru Venture Capital

Today we are exploring the strange and wonderful world of Venture Capital. Kristina Milke started her career as a chartered accountant, with ambition, but an unformed game plan. Being open to opportunity however, brought her to one intersection after another, where she was able to stretch her boundaries and grow her talents in some really diverse organizations.  

 From industrial supply, to aerospace, to her tenure at the incredibly innovative growth company Intuit, her last employee role before launching into venture capital, was as CEO at Investopedia working on its sale.  She credits her life journey to having an innovation mindset – being ambitious to learn, but open minded about what form that learning would take.  

Today Kristina is supporting her favourite type of startups, technology,  into scaling opportunities, while mentoring the founders behind them using her own hard earned leadership and investment skills.  VC is innovating itself – as an industry traditionally dominated by niche risk takers, all the way through to the IPOS where big investment banks flourish, there is a  growing peer to peer investment community supported by regional and national angel funds whose investment theses cover almost any type of business vertical market.   Through mentorship, networking and focused collaboration, there are some amazing things happening in the world of growth and venture capital that are putting many new entrepreneurs squarely on the map. 

Transcript

Angela Armstrong  0:00  
Welcome to prime for growth, a podcast about the journey possibility that entrepreneurs live every day. Our conversations with these everyday innovators explore why, when and how they implement change in their businesses. And sometimes what happens when they don't? I'm your host, Angela. I've been working with entrepreneurs while growing a financial services company for more than two decades. I've learned a lot from our clients over the years, and I hope you will, too. Thanks for joining us on prime for growth.

Today on prime for growth, we're exploring the strange and wonderful world of venture capital.

Kristina Milke started her career as a chartered accountant with ambition, but an un-formed gameplan. She parlayed her ambition into experience through a variety of business channels, starting with an industrial supply company than an aerospace business, all the way through to tenure at the incredibly innovative growth company Intuit. Her last employee role before launching into venture capital was as CEO of investopedia. While working on its sale.  She credits her life journey to having an innovation mindset;  being ambitious to learn, but open minded about what form that learning would take. Today, Kristina supports her favorite kind of startup  - technology  - into scaling opportunities with investment capital in her own angel investment firm.

 I would love to take a step back, Kristina, how I have been introduced to you is as always in that mentorship, role board advisory, helping organizations pivot and change. But I know that your background is in finance. So if you could go back to when you were in school, thinking about maybe what your career path was going to look like, what inspired you to start in finance to begin with?

Kristina Milke  2:01  
So really easy answer for that one, my mom? Yeah, so I grew up in a family where my mother was the primary breadwinner. And she, from the time I was 11, till I was 22. I watched my mum do night school to become a CMA. And so my mom and dad had me they were very young. I was my mother was 17 when she got pregnant. And so I grew up in a very, very humble beginnings, not a lot of money and my family. Neither of my parents were University educated, and they struggled. I have no siblings, they couldn't they knew they realistically couldn't afford more than one kid. We didn't live in a big house, we were renters, you know, all of those standard things. And I just remember thinking to myself, you know, I was so proud of my mom for doing this. But I thought I don't want that route for myself. Ironically, when I got out of high school, I really didn't know what I wanted to do. And I told my parents that I wasn't ready to go to university because I wanted to work so I could buy a car. And my parents were absolutely horrified. Like, absolutely horrified. So my mom made a deal with me that as long as I kept my fingers and doing some night classes, she would be okay for a few years if I didn't go to university. And so I did that. And I took night school, the business program at night, actually, until I had one of my instructors and my night classes. So I worked full time at Enbridge at the time, which was, which was called interprovincial pipeline. And I had two really great bosses that finally said to me, like, we cannot promote you without an education under your under your belt. Why don't you go to university and we'll hire you back as a summer student every year. And sometimes, you know, you need people that are not your parents to tell you that you should go to university. And so I did that I went to university, but I still exactly didn't know what I wanted to do. And I think the easiest route for me to do was to be an accountant, because that's what I knew my mum did that. And I thought, well, no matter what if I'm an accountant, that's, you know, I'll be able to get a job.

Angela Armstrong  4:02  
So it was that conversation with your mom when you finally said, guess what? I'm going back to school.

Kristina Milke  4:08  
Yeah, they were ecstatic Of course. Right. And so I'm very supportive. I had great parents, they were hugely helpful and, and always my biggest cheerleaders and still my mom to this day, I lost my father 10 years ago, but but still to this day, my mum is one of my biggest cheerleader. So I thought, well, if I'm going to be an accountant, I want to have the hardest, the most prestigious designation and at the time that was becoming a chartered accountant, CA. So I went to a why and and i articled and but I never had a path in mind for my career. Never. And I still don't. If you would have said to me 10 years ago that I would be doing what I do today, I would have shook my head and said, No, that doesn't make any sense. And by design, I'm glad I never had a path. And I think inherently I never had a fixed path even though I'm a bit of a planner. And you know, I like to control my destiny. But I think I recognized early that if you have too much of a plan, then you don't actually see real opportunities that come your way because you're so fixed on achieving a certain plan. And every opportunity that I've had come my way I don't think I would have explored if I had too much of a structure plan in mind.

So there's an interesting, a book that I've kind of gone back to recently, just because of a little bit of the overwhelm of the last year that change and the pace of the pace of the change that's been around us. And it's called Peace is Every Step step. And it's, it's a, it's a philosophical book by Thich Naht Hahn, who is Buddhist monk. And it's really about the this art, this discipline of being present in the moment. But it sounds to me a little bit like your sense of "I don't have a game plan", which means I'm going to be utterly focused on what I'm doing right now and do that very well. Would you agree with that?

I do. And I kind of think like, you know, when when you when you open up your mind to, to the universe a little bit, things come your way?

Angela Armstrong  6:01  
What was that? What was the first thing that you didn't expect that came your way after your 10 years at E.I. ?

Kristina Milke  6:08  
Well, I got a job offer from a client. They were a company that was actually a US company and their first office in Edmonton. And that was in Canada, outside of the US. And they had fired their previous on the ground finance person in Edmonton. And the client who is based out of California, who I was interacting with said, Do you need a job this, I think you'd be great for this job? And I was like, Oh, no, I'm working on your file right now. And he's like, and I said, I don't have my letters yet. He's like, when you get your letters, and I said, Oh, no, in a few more months of experience that I need under my belt, and he's like, how about when you're done? Like, we'll wait for you? And I thought, Yeah, okay. So I counted down the number of days, because he had to have so many hours and how many hours that I needed. And then I said to Ernst and Young, I said, Okay, well, according to this, my, my letters will be given to me on this day. So that will also be my last day, at the at the firm, and I'm going to go work for a client. And they are of course, a super supportive when when their stuff end up going to a client anyways, right. But, so I took that job,

It wouldn't have been the job that I would have expected. But what that job worked for it was an industrial supply company that was publicly traded, the head office was based in Dayton, Ohio. But the Division I worked for, which was the oil field division was based out of just outside of San Francisco across the Bay Bridge. And so that was my first exposure to to California. And so I'd go and I regularly and spend time with the with the accounting team there. And really started to like that part of the world. And so I didn't stay long at that company, because I realized that I didn't really want to stay in the oil and gas industry. But I got to get a good flavor for for San Francisco. And, and then if you look at some of the companies I work at a little bit later, I got to spend more time, it was a draw for me for those companies, because I knew I'd get to spend more time in that part of the world. 

Angela Armstrong  8:07  
Well, and that's not only a spectacular part of the world, but so much activity. That was such a booming part of the development space, the innovation, space, etc, ology growth space, all of which are a big part of where you are now. 

Kristina Milke  8:24  
Absolutely. Yeah, that was just the taste. 

Angela Armstrong  8:27  
The Roman philosopher Seneca is credited with the expression "Luck is where preparation meets opportunity". And that is the intersection that Christina has lived in her entire life, making personal investments in herself, so that when opportunity crossed her path, she has always accrued the new knowledge skills, and perhaps most importantly, the confidence to say yes. 

So you're in San Francisco. 

Kristina Milke  8:54  
And then I went and worked for an aerospace company. So that was also pretty cool. Because my office was on the top floor was like the third floor of a building where my office view was the runway at the International Airport. And so what was really cool about that job is, you know, I ran the finance team there, and I got to see airplanes all day long. And then I, you know, I was I was in a hangar, so I could, you know, go out and look at these huge Hercules aircraft that were being worked on in the hangar, but my father was an aviation enthusiast. Like to the nth degree the last 10 years of his life, he spent volunteering for the science and technology hotline, and he would go into schools, usually kids anywhere from grades four or five, six or seven and teach kids about airplanes. You would be booked up a year in advance, by the by the teachers because he came in and he'd he bring these little wooden airplane kits and they put these airplanes together and they could literally fly them and teach them about aerodynamics. My parents thought it was so amazing that I was the accountant like my mother but for an aerospace company, which really appealed to my father, right. So So I worked there for six and a half years and I really got an exposure to working on like very large proposals, militaries from around the world who we worked on their aircraft, so multi year proposals with, you know, these foreign militaries and learned a lot about project accounting around the team there, I was the only woman on the management team for many years, and the youngest by far on the management team. And there was, you know, I'd be at a boardroom table with 14 people, and I was the youngest and the only female. And I learned very quickly about you know, how to conduct myself in an environment like that. And, you know, the GM very rarely made decisions without consulting me, because they trusted me, they trusted the data, I supported them with the numbers. And I really enjoyed my time there for many reasons, I also left for very specific reasons, you know, because I had a boss at the end, who I, I didn't respect enough, and, and he was a really difficult individual. And I thought I don't need this. And I learned in that organization, because I sent me on a self development course. And I learned that one of the primary things that make me really motivated anywhere that I am, is that I need to be able to see my, my positive impact on whatever I'm working on. And I need to be able to, like, actually see it in work, you know, in action. 

Angela Armstrong  11:18  
And it sounds like you had too much of a gap in that role? 

Kristina Milke  11:21  
 Yeah, I couldn't influence enough change fast enough, it was pretty old school organization. 

Angela Armstrong  11:27  
don't fix it if it ain't broke kind of old school.?

Kristina Milke  11:29  
Yes - And there's just a lot, a lot of, you know, I was only, you know, there was a whole nother organization in Toronto that we reported into, and then then we got bought by an American company, because we were traded on the public on the TSX. And then we got bought by an American company. That's very well known, you will have seen their, their scanners at the airports called L3 communications, and they were publicly traded out in New York. So I was like, becoming quite, you know, I wasn't influential enough. And I had aspirations to have more influence, and I just couldn't do enough. That made me happy. 

Angela Armstrong  12:08  
I want to ask a question, though, because I know there'll be peop;e thinking this. You started out, you know, from these humble roots, self described humble roots. But there seems to have been, maybe there wasn't a planned trajectory that I am going to do this as a career, and there is this openness to possibility, but certainly an ambition for learning. Were there ever times on that journey where you really felt out of your depth? 

Kristina Milke  12:38  
And so I feel out of my depth right now, as I'm talking with you, I, I feel out of my depth all the time. And I have to have a lot of internal conversations about that.

Angela Armstrong  12:50  
What does that feel like for you? 

Kristina Milke  12:51  
Oh, gosh, you know, there's a little anxiety around it. Like, you know, I like I recently won this award mentor of the year from the community, and I was sure I wouldn't win. I mean, I got nominated. And I was really grateful that I got that recognition. I thought, there's no way I'm gonna win it. And then I want it and you know, they put the camera on me. And I had to say something, and I was literally not prepared. And I was choked up, you know, because I always I'm like, Wow, I can't believe all these people voted for me, like, I don't know, I just don't sometimes think that I've done anything that's worthy of that kind of recognition. You know, I had these moments. I know, people use this term imposter syndrome. And I've sat on a panel or that was the topic of conversation for that panel. But But I have that literally all the time. Every day, I think, Well, I'm not worthy, or I don't, I haven't done enough, or there's so many other people around me that have done more. 

Angela Armstrong  13:43  
And I even tell my two grown young daughters. Brave is an action, it's not a feeling, you'll never feel brave, you only feel brave in hindsight, where you go, oh, that took some courage. And look, I didn't kill myself or embarrass myself. You just have to sometimes act. 

What was the leap of faith? Like, what do you think is a characteristic in you or support system? or What was it that made you take that first leap of faith,

Kristina Milke  14:11  
all of these things, none of them are life and death. They really aren't. So if you have some perspective, which I do, having a life and death scenario in my life at a, you know, in my 20s, that created a lot of context for me. And so I remember when I was writing my, the UFI, which was the the big national exam that we all had to write to, yeah, to become a CA that exam meant that two weeks later, I was going to go into the hospital and have, you know, a bone marrow transplant that from someone I didn't know and, and they may not come out of it. That was perspective for me. So for me that all that studying and that exam was a distraction from what was going to happen next in my life, which was life and death. And so every time I'm going to, you know, take a role on that. I've Never done. I think about that. And I go, Well, you know what, if I fail at this, I'm still going to be here to talk about it. One of the reasons I stopped being an employee for anybody was is that I was able to control when it's time for me to do more learning and get uncomfortable. And I'm uncomfortable every day right now.

Angela Armstrong  15:20  
So well, that's perfect, because I saw this on one of the websites in which you're featured says, in investing, what is comfortable is rarely the profitable thing. That's a bit of a paraphrase of the quote, but I guessing that's aligned with your sense of  - you always have to find ways to become a little bit uncomfortable and challenge yourself in order to experience growth as well.

Kristina Milke  15:45  
Yeah, I mean, that's what learning is all about. Right? Something you don't know, you want to know, you want to know. So you have to be uncomfortable to admit you don't know it, and then you have to be willing to be open to learning about it. You know, the most challenging part, though, of anything I've ever done. It's always people. It's not the topics, it's people. Because there's so many variables, there's so many people are so different. You think you know, and then something that you hadn't expected happens and, and people come from different backgrounds and different understandings and different perceptions. And it's always it always comes down to people.

Angela Armstrong  16:23  
Well, the trial  balance has a right answer, right? 

Kristina Milke  16:26  
It does.We know one of the things that I love about all the work that I do now is is that I interact with many, many people, I don't go to the same office, every although and during a pandemic, I sit at this desk all day, which was never my intention. But I meet tons of entrepreneurs, I meet investors, you know, I do coaching. So I'm interacting with such a variety of people all the time. And I always learn, you know, I learned when I'm in when I'm in a venture mentoring services meeting, I'm learning from the other mentors in the program, I'm learning from the entrepreneurs on the program, I always I'm learning from other people. And to me, there's something really amazing about that. And you can't, I couldn't get that I was really recognizing it, you know, maybe eight or nine years ago that I couldn't get that by working in the same office with the same people every day. They were great people. And it was a nice office, but it was time for me. And that changed. And it just changed my whole game. I love meeting with people, I love networking. I like being able to connect people. I like being able to help people and different people. And that's what gets me excited.

Angela  Armstrong 
Do you think that that profile that you described is something that's essential for for people that are in your role, doing mentorship, doing investment, creating these frameworks for people within this venture investment ecosystem? Fundamentally, you have to be curious and interested, you can't be there unilaterally just for you.

Kristina Milke
Absolutely. And, you know, even when you're volunteering, you know, there's a selfishness about that, you're going to get something out of it. And so you're always looking to get something out of whatever you're doing, whether you want to admit it or not. There's also you're leaving behind a piece of yourself as well. Right. So and that's the part where you hope is helpful to somebody else. And that's the networking component.

Angela Armstrong 
If you've always wanted to invest in companies, a little self evaluation can help you decide if it's a good place for you. Some of the key attributes that are necessary to be a really great investor are intellectual curiosity, high energy and stamina, great networking skills, good decision making ability, business experiences and asset and frankly, the ability to master your emotions. One of the things I didn't expect was the importance of passion. It turns out that passion filters through all of these other attributes, because startups are often a long road to success. Having a passion and a commitment to the idea helps you survive the rocky journey. Another attribute that I really like is humility. It seems to go really well with the ideas of passion and curiosity. humble people don't think they know everything. And they're willing to overlook bumps and bruises because they're committed to the journey. 

Angela Armstrong  19:21  
It's interesting, I feel like you have a tremendous amount of self awareness. That's something you've had to practice was this intentional investment in kind of understanding yourself over time.

Kristina Milke
My parents were very intentional. They even though they were really young, as I mentioned earlier, they talked a lot about how to parent me. And a lot of that was making sure that I have I had a lot of freedom to try things and be can instill confidence in me in myself. And so I would argue that when I was young, I was probably pretty arrogant. Because I was I had a lot of self confidence when I have I had a health issue in my 20s, that really humbled me, and probably created more of an environment for me to actually really start thinking about my impact to me, but also on the people around me as well. And so the other really integral thing in my career was this my time at Intuit. We're into it really focused on leadership and employee engagement. And I was in a program called fast path with where they put their high performing leaders or potential leaders into this program. And they would bring us around from all their different locations in the world into a cohort. And we had a lot of, we would did a lot of self reflection. And it was all about leadership, learning how to give feedback, feedback, learning how to take feedback, when's the right environment to give feedback, getting feedback from our own employees, measuring our improvements and feedback, how to remind ourselves that as a leader, it's not your job for everyone around you to bend to your style. But it's it's incumbent on you to understand the people that you are hopefully leading, and understanding what motivates them so that you can get the best out of them. And if you're not willing to, you just often won't get what you think you want. 

Angela Armstrong 
You then were moving into this organization that started as a small, bootstrap entrepreneurial organization, and it's not lost on me that into it was kind of the type of organization you reflected on earlier, which is part of your venture capital world, that threshold framework that you're looking for something that can scale and wants to become global, which is really what into it was able to do and you were part of that environment, how much of being involved in that environment. Understanding that, yes, I've got this technical skill set. Now I need to layer on this leadership, this this awareness of how to corral this incredibly diverse group of humans into something powerful, that's going to become more than the sum of the parts. How much of that experience at Intuit flavored what you do now in your VC world? 

Kristina Milke
 so much you know, Intuit was a progressively thinking company compared to the ones that I had existed in before, which were not progressive thinkers. And so this was like a whole new world. And I got there, it was amazing to be there. And everybody was clear, on the on what the North Star of the business was.  The thing I loved about Intuit is the concept that, you know, the three key stakeholders of the business should be considered equally when making business decisions. So the employees, the customers and the shareholders. And I love that because it's like three legs of a stool, if you if you don't, if you cut off one leg, it still falls over. And it's absolutely true. And it and they really believed in innovation. And that was really my first exposure into the word innovation where it got used regularly. Not only that, but you know, it was a very lucrative place to have to be an employee, because of its innovative nature. And I thought, wow, this is like a whole new world. I want to stay in the tech world, for sure. And so the next job after that, and you know, it, you can clearly see in my path beyond that, you know, I've stayed somehow connected into the technology world, I find that and I'm probably generalizing, but the types of individuals that are attracted into this space, are progressive thinkers. And they provide a lot of hope to me like that there's, they have the ability and the tenacity to want to change the world. And I love that. We need people who are going to do that.

Angela Armstrong  23:43  
Yeah, we will always kind of fall back on Steve Jobs statement, "take a bite out of the universe". But that's, that's what I'm hearing you say. And that might have not been your experience. Maybe they were more sedate more. I mean, aerospace is highly regulated, slow moving, you can't make change very quickly. I did a lot of research on the challenges the Boeing had with the max. 

Kristina Milke
Flight Max 737. 

Angela Armstrong  24:11  
Yeah, the flights that were crashing in this new and all of the problems that were in their path for getting to this innovation and, and the shortcuts that they felt they needed to take that were all driven by these kinds of innovation hurdles, or barriers to innovation. And, but if you're in a company that it didn't exist before, it's solving a problem that people didn't think needed solving maybe or they didn't, it didn't occur to them that it could be solved in a novel way. There aren't the same kind of barriers. 

Kristina Milke  24:43  
Yeah, I mean, Intuit was one of those companies where they used to give you know, they had an incubator, so to speak, where where people could spend a percentage of their time and they're like, that was unheard of at the time was not, that was not a normal thing, you know, where they weren't working on any business related to into it. But they could go in and create something. To me. I remember starting there seeing Wow, like, I can't believe that they do this, like, how can they afford to do this? You know, but but now you think about Oh, how can you not afford to do that? If you're a company that's not fueled by technology, by technology underneath, you know, you're not going to survive very long these days.

Angela Armstrong  25:21  
It's the table stakes now. 

Kristina Milke  25:22  
Absolutely. It's not even a differentiator anymore. Yep. It's, it's mandatory to compete in an increasingly shrinking world in any sector. 

Angela Armstrong  25:31  
Yeah, I picked up on a word that you used. And I think I'd love to explore what that means to you. You said it was a lucrative place to work. And I imagine there may have been some financial or monetary component of that lucrative bonus. But in what other ways do you describe lucrative in that context? 

Kristina Milke  25:53  
Yeah, I mean, the, the encouragement of big thinking, were at other companies I'd worked out before, you know, did not encourage that, in fact, I would say discouraged it, they really wanted you to stick to whatever it was, and nothing more than that, you stay in your box, right? The expectation of giving back to the community, you know, they had a program called we care and give back. And every employee in the company was on a team. And you did a bunch of you can decide what kind of volunteer work you wanted to do. And it was a competition, which teams had the most hours of giving back to the community. And I remember, we did work at the food bank, you know, we used to host the stollery children's telephone, and all the phones going there, in our call center, we use all those phones, and I'd be on the phone, you know, taking people's donations like we would we did anything we wanted, as I worked on a Habitat for Humanity home, I didn't enjoy working with physical labor, but I did it anyways. But I love that concept. And you think I came from a background where like, the company would never, you know, any company had worked out before wouldn't have encouraged that kind of thing? And I mean, how lucrative is that for the employees like this, this concept of volunteerism and how important it is, and it's part of the fundamental being of Intuit. Yeah, financial, lucrative as well. You know, when you're a technology company, and you become successful, there's not there's not like, there's a large amount of cost of goods sold going on your on your p&l, right, like you're scaling a business, that's, that's, you know, the products bill, you just selling now, right? It's not that simple. But it was great for the for the employees that work there, there's employees that have been there for a long time, because they have stocks from 20 years ago, and the stock is, you know, done lots of great things. Since then we were given not just stock options, but stock units where we didn't even have to pay for them, that was part of your bonus, you know, you own stock in the company, like all of these really amazing things that you know, really helped increase employee engagement, and we had a pretty happy company. The bar was high, though you had to be performing all the time. If you were, if you were looking for a job where you could coast that was not a company for you, you wouldn't survive.

Angela Armstrong 
It's interesting, because I think what I see now when I do mentorship, if I go into teaching some of the business classes at local academic institutions, the conversation is a lot around the reciprocity between employee and employer, which I think is what you're describing at Intuit,  I don't feel I don't have the sense that that was the same when I started my career, 30 plus years ago, though, there wasn't the same sense of reciprocity, I think there was very clearly you are an employee, and we'll let you spread your wings a little bit. But there's also you have a role to play here. And the role is defined in our, our framework is defined. But I think that employees now are that thread that that shift in this philosophy of what is an organization made up, it's made up of people working toward a common purpose into it sounds like they're really quite a bit ahead of their time, which clearly was attractive to you and to many, many others. And that sense of let's engage our people first. And then they can engage our our clients, but also always a sense of reciprocity. What are we doing for them, so that they can do for our clients, and this this cycle of goodness, if you want to call it that, right,

Kristina MIlke 
But it also takes away the power dynamic. When the company realizes that they're only as good as their employees and the employee, it's not the you should just be lucky, you have a job, attitude, that that attitude is should be long gone. Any companies that still have that attitude, you know, I bet you they're not the ones that are thriving, or they don't have a happy group of employees, right. And so, I really, you know, and it's no different with investors and, and, and companies, right, like the power dynamic shouldn't be so pronounced if you as a founder who is looking for money, or doing due diligence on the potential investor, and you have certain criteria that are important to you, as you know, like, what kind of individuals they are, do they have a good moral compass, you can't find any, you know, stories about them on the internet that say that they may have been involved in some kind of security fraud in the past or whatever, right? They provide great mentorship, they can help you open doors for something, all those things should be criteria that as a founder, you are listing for yourself, as I mentioned earlier, thinking about that as part of your ideal investor profile, then it reduces that power dynamic, because there's some give back on both sides and expectations.

Angela Armstrong  30:44  
That's really amazing. And then you went from the world of Intuit. And is that when you stepped into investopedia?

Kristina Milke  30:52  
 Yeah, exactly. 

Angela Armstrong  30:53  
What what prompted that change? 

Kristina Milke  30:55  
Oh, that was a fun change. Well, Intuit decided in Canada, they wanted all their executives in Toronto, they offered us great, great packages. And if we just if we turn them down, and we had a year, and then they would replace us in Toronto, and I was like, I am not living to Toronto, I don't want to live in Toronto  - I"m from Alberta, I don't want to live in Toronto. And so in the interim, while they asked if I'd go work in their London UK office, which I happily did, and had a great summer over there, did a little traveling while I was there and, and worked and But anyways, of course looking for my next opportunity. But what I realized at that point is I've been traditionally I've been running traditional finance teams, you know, I at Intuit around the accounting group, but then I also run ran the FPA group, the financial planning, but I realized that Intuit really valued their finance people, like they really wanted their finance people at the table helping be part of the decision making for the, for the, you know, the prospects and the projects that the company was going to work on. And I love that they didn't just put the finance people in the back of the room and say, come and give us a report. They said no, we want we want your brains at the table. And I love and I really enjoyed that part of it. And so I after, you know, running finance teams for multiple companies, I was like, yeah, you know what, I think I'd like to do something different. I really want to be in the operations. My I have a I have a great, you know, foundational amount of understanding of finance, I would like to try something else. And so this opportunity came up at Investopedia. And, and the two original co founders were three actually, Cory Janssen, Corey Wagner and Tom Hendrickson had sold the company to Forbes, but they, they knew they needed some help, but they didn't exactly know what the position would be your kind of help. Even it was it was really elusive. And so after several meetings together, I got brought in to be what they would call like a business manager, but it was pretty loose still, within, like, they have a two year post acquisition contract with Forbes, who had purchased them. And there, they were at 18 months of that, and we decided that they were entrepreneurs at heart and didn't want to stay at the end of the two years. So that's when, you know, Cory said, like, we'd like to recommend to Forbes that you take it over. And I remember calling my parents and saying, well, they want me to run the business like I don't I've been here three weeks. I don't know anything about this business. I don't know, I'm pretty worried. I don't know if I should, I don't have the qualifications to do this job. And, and I remember, I caught myself saying that to my mom and dad. And then I thought, screw this. I mean, if I was a guy, I go, you know what, I'll figure it out. And I thought, you know what, I'm gonna say that, I'll just take it and I'll figure it out. And you know, what, if it doesn't work, the worst case scenario, it's not life and death, they'll fire me, I'll find another job. And so I said, Okay, and I took on the role. And that was another game changer for me, like I own the whole p&l. At that point, I was responsible from top to bottom of what was going to happen in that company. And it was pretty cool. And then 18 months into my tenure, they decided to sell us and my job was to pitch it to the potential buyers. Again, something else. Remember, Tim Forbes called me and said, Christina, we're going to sell investopedia. And by the way, you're going to pitch it. And I said, Well, I've never done that before. I don't, I'm probably not the right person to do that. And he's like, No, you know, the company the best. You have to you absolutely have to pitch it. And so he's like, I guarantee you, when the sale is over, you're going to call me and tell me, you're going to say to me, Tim, this was the most fun thing I've ever done in my career, I guarantee it. And I said, I don't know, Tim, I'll call you but I don't know if that's what I'm going to say. And then I spent the majority of that summer, you know, working in Manhattan, we we had a boutique m&a firm that that helped put together the executive summary documents organized, who were the prospective buyers of Forbes wanted a quick sale, they wanted it to be a cash sale. We ended up pitching it to six companies. So AOL ,MSN, Morningstar, a couple private equity groups and, and then the group that ultimately bought us which was a publicly traded company out of LA called Valueclick. And at the end of that, I call Tim and I said, Oh my gosh, this was the best thing I've ever done in my career. I totally like it was intense. I remember sitting in this glass boardroom in midtown Manhattan looking outside. And it's a really hot day in July. And I've got my VP of ops and my VP sales with me who are going to help do this pitch with me. And I remember thinking, holy crap, little Kristina from little old Edmonton sitting in a, in a glass boardroom in midtown Manhattan. I'm going to pitch this company to Morningstar. This is crazy. But we did it. And so and then again, I while I was, you know, at Investopedia, is when I started, when I got asked to come to an angel meeting, an angel investment meeting, and I had no idea what that was either. And I loved it so much, I thought, This is crazy. And I and I stayed and I started writing checks, you know, into companies and technology companies. And, and then again, that led led to where I am today, now and again. So that was like, only 10 years ago. And so I would never have dreamed This is what I'd be doing today.

Angela Armstrong
Well, you couldn't chart I mean, you've had such an interesting path, if you had to,  and I hate to box in the word innovation. In fact, that's one of the reasons I'm doing this series is to show there's lots of paths to innovation that can look different depending on what needs to be worked on inside your organization, what market you're in, what your tools and resources are, what is innovation for you, given the spaces that you've been in? When you could say, a company's innovative versus a company that's not innovative? Could you describe that in some really simple terms?

Kristina Milke
Simply, it's like a company that's not innovative is a company that is stuck in doing things the same way all the time. And when you ask someone the organization, you know, why do you do it this way? And their answer is? Well, because we've always done it that way. I hate that answer.

Angela Armstrong  36:51  
Is there? Is there a place for that, though, to where that's okay.

Kristina Milke  36:56  
I don't know, I can't even I can't even like, for a second medical came to mind, but no medicine. And, you know, I just think of some of the procedures that I've had that are pretty innovative that didn't exist, you know, a few years even before I had an procedure, the technology to support that industry has changed the world dramatically. So I can't think of any industries. Even the food industry, like you talked about, you know, pizza being a technology company these days, right? Like, everything has changed, and everything will change. That's for certain. And people that don't think things are going to change will get left behind. They'll become irrelevant.

Angela Armstrong  37:32  
Yeah. Would you agree -  I think about innovation, and I think about it in small I there. There's big play innovation, but I think there's lots of small i innovation that people can practice. But I think it's a muscle. And I think you have to practice using it. When you've seen companies work well at innovation. What are some of those muscles that they're practicing using all the time?

Kristina Milke  37:57  
Admitting when something isn't working? How about that one? Yeah, that didn't work. Let's try something different. In my career, I've seen many companies that just get stuck and can't. It's an admission thing almost, versus companies that embrace that kind of failure, because I think that brings them closer to something successful. So I guess that concept, and maybe in a way, in the back of my mind, that's what's happening all the time for myself and my career. It's like, yeah, this, this might not work. But if it does, great, it'll inch me along to the next thing, whatever that may be.

Angela Armstrong  38:31  
The truth is that being comfortable has always been the enemy of innovation. In comfort, you're no longer striving, no longer learning, you can easily repeat patterns from the past, repetition and habit are important. They allow us to focus our limited attention on things that require it while other things go on in the background. Biologically, our bodies do the same thing. We don't think about breathing, having our hearts beat or grasping a tool until those patterns are disrupted through , say,  injury. And we're thrust back into full on learning mode. Biologically, we crave a known environment and change is threatening. Our brain reacts to threats with the primitive fighter flight. And neuroscience tells us that the longer we sit in the known patterns without practicing change, and managing that sense of threat, the harder it is, those neuron patterns literally become biologically hardwired. And that sense of threat can overwhelm any initiative to change. 

But companies like to build rigid infrastructures to do things repetitively. And, and, and well, I think when I see technology, innovation, that innovation is different, but it's also their philosophy about what type of business they're they're growing and the type of people they want to attract. Are those also different?

Kristina Milke  39:53  
Yeah, I mean, as a company scales, the needs of the company evolve as well. I mean, the types have individuals that you need when you're a startup may not necessarily be subject matter experts, but people that can do a variety of things, because that's all you can afford is a handful of employees at the beginning, you know, as your company grows and scales, and you have more product offerings, potentially as well, you know, the requirements, startup culture is interesting, it attracts a certain type of folks in it. When a company grows, you know, there's this concept about maybe not being deliberate about what type of culture you want to build in your company, trying to maintain the same startup culture when you're growing scaling business with maybe bigger clients and, and not recognizing that maybe you need to add in some other types of individuals or social construct into the business, I see a lot of companies that that just haven't really thought about what kind of culture they want to build in a company. So as they start growing, they just start hiring people, and they haven't thought about cultural fit. It's just, it's been back in mind. I mean, you and I know, people that care a lot about build helping companies build the right culture. And I think there's something really important to be said, For that, that type of thinking, you know, I'm talking, I'm coaching a company right now, they've got some great opportunities for some fast growth coming their way. They're not prepared from the number of employees that they need or the infrastructure, because you know, you need funding to do that, you know, one of the things we're talking about now is as they get ready to start hiring people is, okay, it's it's time, it's time to start talking and being deliberate about what your culture is that you want to have for this business. So that you, when you go to do your hiring decisions, you have that in mind, are they a good cultural fit, as well as a technical fit as well as any other fit that is important to you, that needs to be one of the criteria. And if you haven't talked about what your culture is, or thought about it, then you can't even fit that into your criteria list.

Angela Armstrong
If you've found that companies that are not conscientious about, it's really hard to define a culture out of the gate, because the more people come in, the more diverse people come in, the more you're maybe your original conception is challenged, we all have a bit of unconscious bias to our own framework. And so you can tackle that by saying, I know, I know, I need other types of people around the table to challenge my fixed ideas, or maybe my too fluid ideas. Do you think that that being able to check, have those check-in moments, especially in these kind of high growth, innovation cultures, where everything is dependent on iterating, and testing and iterating and testing, there's a certain kind of personality that is really drawn to that.  They they want the nuance of change, they want the challenge of, of failing and trying again, and they love that maybe the variability in every day, and you mentioned that was something you love that learning that growth curve, there's certainly a cohort of a kind of people that want something that's more predictable. There's a type of employee you need in a certain segment of your business where you can get things done that are routine, that need to be disciplined, they got to have a rigor attached to them. And there's, there's maybe a little bit less room for pure creativity. Maybe accounting is an example of that there are things that have to be done in a certain way to a certain level of rigor, because the results are important, and you need them to be correct. And you need them to be transparent and provable.

Kristina Milke
Well, the good thing is that, you know, sometimes you can bring those people on contract part time, you don't need them full time in your business, depending on what stage your company's at. But But you use the word about, like, you know, different different mindsets, different folks on the team, that you challenge your ways of thinking. And I think about that, that term diversity and how important it is today. I mean, we value it so much in our fund, we're a diverse team, on the three of us, and I'm the female, obviously, you know, we have some ethnicity on the team as well. And so, we found that that creates some challenging conversations at times, but we have to embrace them. We also care a lot about the diversity on the teams that we invest in. So we track that with our in our portfolio companies in our first fund 70% of our portfolio companies have diversity on the founder or or management team of the company. We also track that with our limited partners in our fund as well. So in our first fund, you know, we had 40% of our, of our limited partners had some amount of diversity amongst them as well, because we care, we know that that diversity of thinking creates better outcomes, and better outcomes ultimately creates happier limited partners in the fund. So we care a lot about diversity and like I'm such a strong believer in it. That that's the only way we want to invest.

Angela Armstrong  44:50  
And so that would be one of your framework  - your must haves in terms of investment material?

Kristina Milke  44:56  
Yep, for sure. 

Angela Armstrong  44:58  
What have you seen where there's too much homogeneity in an organization, are you able to reflect that back to those founders, if they're not aware themselves of how that could cause them to trip?

Kristina Milke  45:12  
You know, I, you know, I don't want to press my or our funds beliefs on founders that we're not investing in, that's maybe appropriate if they ask for feedback. You know, but who am I to say that, you know, two white male founders aren't going to be successful? 

Angela Armstrong  45:28  
Happens all the time!

Kristina Milke  45:29  
There's exactly right. So, but, but they maybe able to find investors that maybe that's not as important to them as it is to us. And that's okay.

Angela Armstrong  45:39  
 So that's  to get to understand your own culture and make sure you've got the values fit with  the investor

Kristina Milke  45:47  
Yeah, I mean, we are looking to have deliberate conversations at our fund, as we were setting up the fund about how important is this to us? And we've all agreed that it's become very important. And and it's part of something that we talk about now, as we're raising capital.

Angela Armstrong  46:04  
Why is it important toyou  other than that, you, you believe that it drives better success for, you know, maybe maybe a big pool of organizations,

Kristina Milke  46:14  
I'm not a white man. That's why it's important to me -   one of my partners is also not a white man. You know, so we've had challenges in our careers or perceived challenges. You know, I talked about my time at an aerospace company where I was the only female in the management team. I don't think that that was healthy for that business. I don't think it would be healthy today for that business.

I think there's a lot of data out there now that shows more diverse organizations with more diverse leadership team, more diverse boards are generally more resilient, they're more risks, conscious, they see a bigger part of the market, so they can respond to that in maybe a little bit more knowledgeable way. So I think the data supports what you're saying, everybody's got to find that for themselves. And of course, just like I can't lend to a company and say, but you really should have some females on your leadership team. I think it's, it's, it's a hallmark of a transitional world out there, where we're seeing a lot of change, just like we're seeing the sense of organizational reciprocity between employer, employee stakeholder client, I think we're also seeing that sense of a bigger organization with a bigger pool of thinking is going to be better in the long run. 

Angela Armstrong  47:42  
Some really important things to consider if you think that venture capital is a path you want to go down, are some of the ideas that I've come across through the research. Here are six key points that you can think about. Number one, Know yourself, why are you seeking venture capital? What kind of person are you? Are you coachable? What are your core values? Are you ambitious, willing to share control? Do you know what your blind or weak spots are? Number two, you need to build a matrix of the right kind of venture capitalists, the person and the money structure. There are lots of ways to become informed, starting with Investopedia, the company that Kristina helped sell back in 2010. Understanding the target VC market will help you hone your pitch and be relevant to them. Number three, know your numbers. Even if your wheelhouse isn't finance, get familiar with the key drivers and barriers in your business and their impact on the numbers. Get a finance coach or a contract CFO if you need some help, and don't have it in house. There's lots of resources out there. Number four, know your business model. If your model is long, slow growth, it might not be a good VC fit. Maybe you need a private investor, rather than venture capitalist. VCs probably want rapidly scalable hockey stick growth, at least the intention for that. This includes knowing what the risks and hurdles are in your marketplace, regulatory framework, what's the competitive market inertia of the client base to make change, etc. Number five, know your market. Your good idea doesn't necessarily translate into something clients will pay for. So make sure you understand both the problem you're solving and the clients pain that you're taking away as well as how big that potential market is. know it well, because you're going to get grilled on it. And number six, the most important involve the patient. If at first you don't succeed, go away, lick your wounds, reflect, learn from the experience and that if it leads you to reconfirm that venture capital is the path try again There are many, many funds out there, many people, and everyone knows that if you weren't ready last year, next year might look better.

Kristina Milke  50:09  
I mean, even you know, in the fund management world, there are still not as many women participating in it. I would really love for Sprout Fund to to raise its capital and, and I'd love to be able to stand up in front of a lot of young women and say you can do this I did it I got here. It was a bit of a windy path. But but you can do this too.

Angela Armstrong
Can I ask you a question then leading on that? Because it's really interesting. And I and I looked at the numbers and done the reviews of a whole bunch of VC conversations around diversity. And I have heard from a variety of report sources -  tell me if my numbers are wrong -  that only 4% of all capitals raise is raised by women founders. Is that because of a lack of diversity on the VC side of the table? And there really, there's a communication gap between what those VC founders are looking for you? Is it a disconnect in the value set? Is it a language barrier? Or is one of our criteria, there just needs to be more organizations like Sprout out there that will help to frame that opportunity in a different way?

Kristina Milke  51:21  
So the number 4%? I mean, I hear I've heard the same number 3, I've heard frequently, the 3% number. But you know, I think I mean, I'm speculating, but you know, remember the the point where I made Where the guys at Investopedia, were leaving, and they said, We want you to do this? And I said, Well, I don't, I don't know how to do this, I shouldn't, I shouldn't put my hand up for the job. And I think that so you know, when when women pitch their business, as as an investor, you, you want to see the hockey stick of where the revenue is going to go. But women, and I'm generalizing, we tend to put what we actually believe we're going to do the realistic number, and it may not be a steep hockey stick. And so there's a gap in what that means. If you're pitching to investors, investors are expecting the hockey stick, if they don't see a hockey stick, they may think, well, this company is not going to grow. But we also know that that hockey stick likelihoods really low, but we still want to see it. Or there's something's not right, right. So So women aren't going to put it up there if they don't think they can really do it. And so you see how that communication barrier could exist them?

Angela Armstrong  52:31  
So what's the answer to that? Is it more conversations like this, where we can talk about t he fact that having a homogenous organization, you could be successful to certain level, you can get out of the gate to compete in a global scale, which is the companies that your organization is interested in investing in, and have that global ethos, that global mindset that takes diverse thinking, because the world is not the same from one part of it to the next.

Kristina Milke
I think it's two sided. Like I think young women need to be raised in an environment that says, Well, one, you can do this, too, you can think really big. And yes, there's risks to thinking big, but it's okay, you can manage the risk. And then on the other side, it's, you know, the, the men that are in these roles today, having more deliberate intention to be open to looking at founders that have a different look than they are.

Angela Armstrong
When you look back in your 20s. And you think about that moment where you had a literal existential crisis, saying I'm going into a health event in my life, from which I may not recover, I don't know what this is going to look like. And seeing that they gave you an incredible perspective. Obviously, we can't choose to go into health event, we could choose to do risky activities, which might end up with a health event. But do you say that, if you could draw an analogy from that to say, you can flex innovation muscles, you can also flex risk muscles. And you should, you should test the waters and put yourself in a position where you could fail, because it's going to give you perspective, especially when you get through it on the other side and say, Well, that was not a life and death moment. Do you think people can practice that sense of risk taking as well?

Kristina Milke
Yeah, I mean, I think it's, I think parents need to give that opportunity to their children and I feel like that risk adversity is really high with parents these days. You know, I had lots of freedom as a kid, I had freedom to do almost everything I wanted. And until I did something bad and then you know, the rains would get pulled back and bad could be you know, skipping school, maybe or You know, but I had a lot of freedom to try a lot of things. And my parents believed in me. And I think that a lot of parents are so risk averse with their kids now. So those kids don't, they haven't built up those muscles. So imagine how much harder it's going to be for them to flex them. When they haven't, they haven't had a chance to practice them in their use.

Angela Armstrong  55:23  
Do you feel like we have been unaware or not ready to invest? Or what has been the lag factor? Because I know the rest of the world has very big investment communities in the VC space.

Kristina Milke  55:41  
You know, I would be pure speculation on my part. I do, I can always speak really to the ecosystem, that I'm surrounded by locally, Alberta wise, and there's a lot a lack of exposure to technology, I see it all the time. And then lack of education because of it, right of how you can make money or how to invest, what does it look like, what to expect. And then that also then puts our entrepreneurial community behind as well, because, you know, potentially lack of funding going into those companies, which is, you know, how we even came up to our thesis for our fund without some funding, so

Angela Armstrong
It prompts a question I have had, which is, it feels like there was a day in the past when you built your business, and you kind of bootstrapped it, right, you've maybe curated some friends and family capital, everybody still does that. But there was not this really robust investment environment. And, and companies yet they still found their way through. And I want to ask this provocative question, without it seeming like a negative. I'm curious, the transformation of the availability of capital of this sense that there should be founder capital out there? Is it going to accelerate businesses too fast? Like, does it put businesses in a place where they all of a sudden get very well heeled, without having learned the grunt work steps like tripped over themselves bruised their knees, you know, like a kid learns to walk. And they learn how to balance themselves by experiencing the pain of falling. And I wonder how, where is that tipping point where you there's too much richness? I don't I don't even know if that's an issue. But but I've been watching what's happening, and the expectations of everyone coming out of, you know, an entrepreneurial program at any one of the colleges, whether it's in technology or some other space and saying, I got to get funding, like, well, for some things you do. You have the thought around that?

Kristina Milke  57:54  
Well, I have a few thoughts, actually. So So one of them is, you know, not all entrepreneurial ventures are meant to get venture capital. So that's the first thought I have. And, you know, I see too many companies that think that they're a prime candidate for venture capital, as opposed to traditional financing or growth through or capital through growth of their own business. And so, you know, most funders have an investment thesis. And we say no to lots of companies, and then we often run often, but sometimes get pushback going, well, Alberta investors don't know what they're doing. It's like, Well, actually, Alberta investors know what they're doing. But you don't fit our investment thesis. And we build our fund based on selling an investment thesis to our funders. And so that's issue number one would win. And that all translates back to the entrepreneurs not being educated on raising, in its purest form, like they just don't spend, they just think, and I'm generalizing, you know, that if they build a company that everyone should just show up with with the money tree. And it doesn't work out. 

Angela Armstrong  59:03  
Dont you love my idea.? Don't you love me? 

Kristina Milke  59:05  
  Yeah, it's like, well, this is the best idea ever. Well, do you know how many times I hear that? I hear that all the time. I crush people's dreams by saying, Yeah, I hear that all the time. And they're like, what? No, you don't like? Yeah, I do. I really do. Right? They have to believe that. But it doesn't always mean it's true, unfortunately. So that's one issue. The second issue is, you know, like the companies that are the best attractive targets for investors to give them a whack of cash for growth as the companies that are aiming for top line growth, and don't care right now about profitability. And the investors have an appetite for that because they know that eventually, if it's a great if they get great traction, and it's a great technology, it'll catch on and it'll be profitable later. So you have to have that mindset as an investor that you're okay if your company looks underwater for years.

Angela Armstrong
Venture capital is not a magic money one out of every 10 startups three or four will fail, three or four go on to return the venture capital investment, leaving only around two out of 10. that lead to big growth gains. In the US, the National venture capital Association estimates that 25 to 30% of VC backed deals will still fail. If you look at deals that got wound up, and the venture capitalist got their money back, but the company still failed, that failure rate climbs to nearly 40%. What is also true is that while scaling companies will survive longer with venture capital money, after the fourth year, even the venture capitalists will hit the brakes, they're not going to continue to invest in a failing business.

Angela Armstrong  1:00:44  
 Is there a sector? Or is it a stage? Like what is the defining thing when you say not all kinds of enterprises need venture capital? Can you easily define by sort of looking and sifting out ones could you easily sift out ones that you say you don't need that here's there's another approach you could take?

Kristina Milke  1:01:03  
Yeah, and, you know, bricks and mortar for sure, we would never look at, it's just and there's not that there's anything wrong with those businesses, they're just not our target, right, they just they're a slower growth model, you can meet founders that you can see, you can tell by the conversation that they want to build a lifestyle company so that they and maybe their kids have a place to have a job for a long time. That's great, but we'll never get an exit out of that. So again, we're not going to be that interested in it or interested at all. There's only certain types of investors that really love pharma or med type companies, because it's a much longer, more regulation around more regulatory hurdles to get through. And there's definitely funders that love that stuff. And then there's ones that just I don't get it, it's not my place, you know, I wouldn't look at that. So it comes down again, to your investment thesis. And what we're aiming for in our fund is, is really companies that have a large global market opportunity. So if they're interested in expanding in Canada, we're not interested, we're looking for people that have a global market opportunity, we're able to do some, some due diligence on what that market opportunity looks like we're seeing this trending across the world. And they can potentially compete in that. They see a lot of activity in this space. 

Angela Armstrong  1:02:21  
And and the more you pay attention to it, obviously, the more you see it, and my last couple of years were just sort of getting venture capital curious, what does that market look like? How can it mobilize the companies around me and our future customers and organizations in my community in my country, I think that what I see is more education. But along with more education, there's more noise, more distractions about what venture capitalism isn't teaching organizations. So I'm sure every good VC firm has a way to say, here's the list of criteria that you should start with. And if you can't check every single one of these boxes, we probably shouldn't go any further. Or you should go away and do more homework, and come back when you 

Kristina Milke  1:03:12  
but that's the point. I mean, raising capital is no different than, you know, if you're trying to sell your product, you likely are going to do an ideal customer profile, you should be doing an ideal investor profile, and do that research on, you know, what's the right investor for you, because it's, it's a marriage. So there's, it's a two way street, it's not, you don't just want anyone with money, you want to make sure that they have your value alignment, or values alignment, right. And they have they invest in your sector, they invest at the stage that you're at, they have the dollars to support it, you know, if you're looking for mentorship along with the dollars that they do that, like there's a lot of different criteria. And I see too many companies that just don't even consider any of that stuff. They just go out and figure and talk to anybody and, and it takes research to go through first identifying your own criteria for your business, but then doing the research to find those right investors to reach out to. And then in our first fund, we we had 500 companies that touched us in some way came to us applied got referred whatever we did about approximately 100 where we did some level of due diligence, some of some not as you know, tighter as much as others. And we made 10 investments like that we sifted through a lot of companies. Yeah, that's, that's what a manager's job is to do right now. And and we like each investment that we made, we have picked very, very carefully there was a lot of work and thought and debate behind it. It's not like you just show up and people just show you money. It's it's should be the same amount of work on the on the founder side and it ends up being the same amount of work, but it's disorganized. They haven't thought about it. They're surprised when it takes them six months to raise capital. And they potentially run out of money before them because they didn't allocate enough time in advance of when they needed the money to start doing the work to actually get the Money?

Angela Armstrong  1:05:00  
How often do you find there's a fundamental lack of financial sophistication where they don't even know how to do the forecasting? How do I come to my financial needs, 

Kristina Milke  1:05:12  
I put my mentor hat on, because I do a lot of coaching these days, as you probably know. And generally, I get asked to be a coach by the companies because they want to build a financial model. And they don't have any real transparency into what their cash looks like, or what it could look like, or what it will likely look look at look like. So they don't know when to start raising money. And they're the an education of financial literacy comes to translates then into an education or raising capital. If they understand how to raise capital, then usually they have some some pretty good financial literacy. And they typically go hand in hand. So I do you know, my favorite kind of company, Angela is the ones that you don't hear about until they raise their head, and they've already raised a million dollars and have a bunch of revenue, you're like, holy crap, where did this person come from? I never even heard of this company before. Yeah, because they weren't spending their time doing pitch competitions. They were building their company, and making sales and making sure that they found the right customers. They weren't public, they weren't, you know, getting recognized on stages where they might want a few bucks, or get a little bit of local recognition. I don't want a company that's getting local recognition, or global recognition companies. And so there's a lot of pitch competitions these days. And I get why the allure of them. But when you think about it, you know, the chances of winning the competition are pretty low probability, their percentage even. And the local recognition doesn't get you that far.

Angela Armstrong
Well, and I wonder,  there's there's a sense that we, as a community, take take our logical ecosystem, our physical ecosystem, our geography that we live within, and say, the community of business leaders I know and academic institutions that are trying to empower students, or whatever the motivation is, there seems to be this sense that we need to spend more time and invest more resources, business resources, human resources, talent, resources, government resources, in talking up this story of venture capital and raising capital and founder.... is that is that the right process? Is that just a part of it? Is it one way? Or is that how you build kind of a larger, resilient community because I get the sense that people feel, that's how you do it, you, you really build a lot of momentum by having a lot of activities and pitch competitions is one of those things.

Kristina Milke
I mean, it could be one of the ways it shouldn't be the only way. And I still, you know, feel really strongly that there's no formal capital raising education going on.

Angela Armstrong  1:07:59  
What would that look like if there were formal capital raising education,

Kristina Milke  1:08:02  
I mean, startup Edmonton, brought me in a couple times to do like hour long talks around, say, you know, tips for, you know, pitching to investors, or how to think about raising capital. And that's when I start really calling myself a dream Crusher, because I, you know, give them a lot of things that they likely they are sparkly and sexy, but require work on their end and thought and not how they expected it to go. The other the other thing I see a lot of his founders who are, you can tell they're inexperienced by often the kind of business model they're thinking about. I've seen a lot of recently a lot of marketplaces, you know, where you have to find a customer and then you find a service and you're in the job of matching. 

Angela Armstrong  1:08:51  
Yeah, 

Kristina Milke  1:08:52  
and you take a percentage of the revenue service kind of thing. Yeah, it's, it's the, it's the hardest business model ever, for tech company. And what we won't even look at it in our fund because the volume of throughput you need for you to have any substantial revenue. That's, that's actually your earned revenue in the company not not moved over to the service entity that you're supporting. It's, it's vague and onerous. And, you know, I recently got exposed to a company who is valuing themselves at a pretty high number. And my question to them was, okay, how much revenue do you have? And they're like, none and I'm like, why like, why do you think you're valued at that? Well, we need the money to build something.   I'm like, well, that's not a good enough reason for me to write a check for that valuation.  know, these are basic fundamental

Angela Armstrong  1:09:42  
should there be as part of this greater building the vibe building the momentum, this conversation about the the capital foundation I mean, what are those fundamentals Do you think that that we springboard over that a little Bit, when we're doing this, I want to put investors together with nascent companies, the investors may be successful entrepreneurs, but they built something -  that doesn't mean it involves venture capital or that they had investors, it doesn't mean they have any familiarity. They just want to help out, right?  , the more the more like mentors with money

Kristina Milke  1:10:20  
philanthropic 

Angela Armstrong  1:10:21  
money. Yeah, it's philanthropic as it is. 

Kristina Milke  1:10:24  
There's nothing wrong with those kinds of investors. I mean, those are great investors and their expectations are low. Exactly. Yeah. But, but But yeah, the education, you know, requirement is not just on the founder side, but also on, on new investors coming into the community, who've heard about this tech thing going on and want to get involved. And so, you know, there's a two sided education, but you know, I, I get the same kind of things where you know, a company will come to me, they'll get referred to me just as someone in the local ecosystem that knows a lot about investing and just think we should meet. And I asked the question right away, well, what's your deal structure? And I get this blank look like they don't know, even basic things? Like, what kind of deal structures there are? What, what's the best one for them? I mean, how can why would you want to sell a piece of your company? And you don't even know what the medium is on how to do it? You know, like it to me, it just, it's just illogical. Like, I just don't understand what you don't know what the ramifications are for you in the future.

Angela Armstrong  1:11:23  
Right. True. It's totally true. And I think they don't even know the question. They don't even know that they don't know.

Kristina Milke  1:11:31  
That's happens all the time. They don't know what they don't know. And so all these these local competitions, where they bring people together, and their nascent businesses, those things are good for, for a couple reasons. One, you know, frankly, building a relationship with investors early before you ever need them for anything is a good thing to do. Right? So so getting know who the people are, but you don't want to limit the investors that you know, to your local ecosystem, because they may not have the right investment thesis anyways for you.

Angela Armstrong  1:11:59  
It makes sense that globally, the largest dollar volume of deals are in the scaling phase of businesses, where companies have proven market validation and revenue. The second highest volumes of investment are in the early stage, and least is on either side of the spectrum, namely late stage and the seed capital stage. And as for the proverbial unicorns, over 15, deals done in 2020, were valued at billion dollars or more. To put that in global context, though, those 15 companies represent point 0007 5% of the 20,000 Global deals completed in the year 2020. 

Kristina Milke  1:12:40  
You know, I just recently finished a coaching, coaching contract with a company that you will have seen pitch before, but they just they just finished raising their first real round half a million dollars. And I can tell you that a lot of our coaching conversations in the last few months was them learning the ropes on how to find investors how to do the calls, they how to build a database, no different than you build a CRM for customers, they built a CRM for investors.

Angela Armstrong  1:13:07  
I think a great way to close today's conversation is by talking about Ethan Mollick. He's the Co-inventor of the now infamous internet paywall, (for which he jokingly apologizes). He wrote a book recently called The unicorn's  Shadow. In this book, he talks about the mythology around what a founder looks like -  the classic Silicon Valley founder and what startup requires, and he believes that the mythology around these billion dollar unicorns and the startup ecosystem actually discourages people from participating as entrepreneurs, because they don't see themselves in that mold. at Wharton, he's researching and teaching this entrepreneurial ecosystem, and what does it take for a person to succeed in the startup mode. And what he's discovered is that people from all walks of life and all different kinds of backgrounds can have success, they simply need to be taught some of the fundamental skill sets. So he's got an entrepreneurial simulator, where people get to practice being startups. And he feels that this leads to much greater levels of success later, when they go on their entrepreneurial journey. He's found evidence to support the idea that crowdfunding actually results in Rational investment decisions. And that's important what we are seeing in some of the startup, these investment co ops where non sophisticated investors who are business people who have had success, that want to give back to the community, actually cooperatively fund and get companies on their feet. The more we practice the startup ecosystem, and the more we become knowledgeable about venture capital building deals, the better our entrepreneurial world will be, and the more fabulous new businesses can gain a foothold in the world. 

Both what Kristina has said, between practicing entrepreneurial skills, learning about the financing for those entrepreneurial enterprises, and digging in and learning some personal grit and having a little bit ambition. There's a lot happening in the venture capital and angel investment world where money meets hopefully innovating entrepreneurs. 

There were many things that really resonated for me in today's conversation. One is the way that innovation is cultivated inside of businesses, where there's employer employee reciprocity, and a clear connection to purpose. But with the caveat of the typically focused work ethic goes along with the myriad of rewards. Another is the way that the organization self actualizes, acknowledging when it's hitting walls, and needs to make change, and creating an internal innovation ecosystem that fosters and rewards changemakers. One theme that comes up over and over among the innovators we're speaking within our Prime for Growth series, is the amount of personal investment made by becoming not only organizationally but personally self aware, and self actualizing. It's intentional and constructive, cultivating really fertile ground to make ready for new seeds to sprout. Not ironically, that is the name of Christina's venture capital seed fund Sprout Investments. 

Prime for Growth is produced by Prime Capital, with support of Canadian Western Bank, the bank for entrepreneurs who is obsessed with your success, and the business execution specialists results unleashed, who help you bridge the gap between strategy and execution. Till next time, go forth and innovate.