Look beyond oilpatch, Dickinson urges investors
One of Calgary’s best-known entrepreneurs is calling on Alberta investors to take more risks with non-traditional industries and promote the diversification of the province’s economy.
Arlene Dickinson — the CEO of Venture Communications and former star of CBC Television’s Dragons’ Den — said while diversification is often touted as the silver bullet that will save Albertans from future oil price-related recessions, deep-pocketed investors are still far too hesitant to put their money into early-stage companies outside of the oil and gas industry.
“For 90 per cent of the high net worth people in this province who’ve made their money in oil and gas, when you go in and say, ‘hey, I’ve got a food company I want to start,’ that’s a leap for them,” Dickinson says. “But Alberta entrepreneurs, the ones who have been successful, need to open up their wallets more to other industries.”
Dickinson says she’s concerned Canadians’ inherent conservatism can be detrimental to economic development. After eight seasons on Dragons’ Den, she opened business accelerator District Ventures in October 2015 after realizing that — not only was there no venture capital fund in Canada aimed at the consumer packaged goods industry — there wasn’t even a physical space where entrepreneurs working in this sector could come together for meetings and networking.
“This is compared to the U.S., where the largest M&A activity happens in the consumer goods space ... So we were losing a lot of companies and resources to the U.S.,” Dickinson says, from District Ventures’ Calgary headquarters. “It didn’t make sense to me.”
Sixteen months into the project, District Ventures has helped 32 Canadian companies in the food and beverage and health and wellness sectors connect with strategic investors, sponsors and commercialization support. Businesses accepted into the most recent cohort include a gluten-free and vegan pasta company from Ontario, an Edmonton-based cookie company, and local coffee roaster Calgary Heritage Roasting Co.
A newly announced partnership with Sunterra Market will see the Alberta-based grocer feature the products of District Ventures entrepreneurs on its store shelves.
Dickinson is also working to raise money for a venture capital fund to support early-stage companies in the consumer packaged goods industry. She says she believes the sector holds huge promise, not just because food and wellness are becoming increasingly trendy, but also because Alberta is an agricultural powerhouse.
“There’s a huge gap in Canada around the development, sustainability, and encouragement of venture funds in unique spaces — everybody is focused on technology, everybody wants to put their money into software,” she says. “But look at how many people are employed in agriculture in this province. Look at the depth of knowledge we have in agriculture in this country and this province — it’s huge.”
Figures from the Calgary Chamber of Commerce show the city saw a record number of business closures in 2016 as a result of the economic downturn. However, it also saw a boom in the number of new business licences being handed out. Dickinson says that for many people, a recession is an opportunity to take a risk or reinvent themselves — and these entrepreneurs need to be supported.
However, Dickinson says that support doesn’t necessarily need to come from government, at least not right away.
“Too many businesses in Canada rely on government to get them started. They believe it’s government’s job to fund them at the beginning, and I actually don’t believe that,” she says. “I believe it’s the entrepreneur’s job to find the first sale and build the business to the point where government can start taking hurdles out of the way and supporting through policy.”
One government initiative that Dickinson is pleased with is Alberta’s new investor tax credit, designed to encourage venture capitalists and other investors to take a chance on non-traditional sectors.
“It’s a good start,” she says. “Hopefully it will create not just new investment, but new funds to develop and support those investments.”
But for the Alberta economy to truly grow, Dickinson says, investors themselves will have to be willing to step outside of their comfort zones and support entrepreneurs doing new things — whether that be clean technology, renewable energy, value-added agriculture, or consumer goods.
“It takes people willing to put their money where their mouth is when they talk about diversification. And we don’t have enough people willing to do that,” she says. “When I think about the economy shifting and turning in 2017, it’s going to be because people start to recognize that the world is changing. And we need to start thinking about what else we can do besides traditional exploration and energy development.”