Using its experience in the mining sector, Sudbury is well positioned to build on its expertise and foster innovation for global success.
John Ruffolo made that observation while visiting Sudbury to speak to industry stakeholders, as part of NORCAT’s ongoing Hot Topics series, about how, why, and when to raise venture capital. Ruffolo is the CEO of OMERS Ventures, one of Canada’s largest venture capital firms currently investing in innovative technology ventures.
A century ago, Canada built its economy around its strengths, resources and agriculture, but moved towards manufacturing and services following the Second World War, Ruffolo said.
Now that Canada is returning to a resource-based economy, the country needs to decide how to play on its strengths for a long-term model of sustainability.
He believes Canada, and Sudbury in particular, is poised to be a global player in innovation-based industries.
“You are blessed with abundant resources,” Ruffolo said. “Is there perhaps an innovation element here where you can use your knowledge of the resource sector to build innovation, and that innovation could be used to reduce costs, reduce any environmental impacts, sell globally, and be world leaders? You have this massive advantage and it’s also an opportunity to look at future jobs for our youth.”
Canada has a number of assets that give it a strategic advantage, including its education and retraining initiatives, productivity, and immigration. There’s also a culture of innovation here that’s admired in other areas of the globe, he added.
“Silicon Valley looks at Canadians, particularly in the mining and resource sector, and says, those guys are nuts,” because companies raise billions of dollars to chew through the earth in search of something that may or may not be there, Ruffolo said.
Yet, on a per-capita basis, more startups are created in Canada than in the U.S., he said, and Canada is one of the easiest countries in the world to set up a business.
Ruffolo said a measure of a company’s greatness is its ability to sell outside its home jurisdiction to a global market.
“If you can sell your goods and services outside of Canada, and particularly in the U.S., clearly you can sell anywhere in the world,” he said.
But companies need to be nurtured from their earliest stages and have access to a supportive network through their lifecycle in order for them to grow and compete globally, Ruffolo said.
That’s where institutions like NORCAT come in. Since 2010, numerous incubators, accelerators and micro-venture capital financing programs have been established, and there are now 106 of them across Canada. They allow talent to congregate and innovation to flourish.
Business owners still face the daunting task of securing financing to move their ideas to commercialization. Ruffolo said financing is one of the top barriers to success faced by businesses trying to bring a product or service to market.
Ruffolo said, ideally, business owners should bootstrap their businesses. But in a crunch, venture capital can be a better way.
“If you have a unique time opportunity where you’re building a product and you just think, ‘If I have x amount of millions of dollars I could really bust out and this could be the greatest product in the world, but if I don’t do this next year this thing falls apart,’ that’s when venture capital makes a lot of sense,” he said.
But entrepreneurs should keep in mind that it typically takes a business 10 to 15 years to get a business off the ground, so that’s the same amount of time they’ll be in partnership with their investors, he cautioned. Before getting in bed with venture capitalists, entrepreneurs should assess what value they bring to the business and be choosy about whom they partner with, he added.
