Digital dragons would rather not breathe fire
But when it’s needed they don’t hesitate to do so
This week, two new digital dragons are bringing a welcome sense of community to CBC’s Dragons’ Den franchise. While Nicole Verkindt and Harley Finkelstein are both capable of breathing fire at entrepreneurs bringing in underdone business plans or oversized valuations, they would really rather not.
They’re out to boost Canadian entrepreneurship, not torch it.
Verkindt, founder of the Offset Market Exchange (theomx. com), and Finkelstein, chief platform officer for Shopify, join BlueCat Network’s Michael Hyatt in Next Gen Den, a web-only version of the show that features younger entrepreneurs and edgier deals. The first of 20 planned webisodes for its second season will be released Oct. 7, the same day Dragons’ Den returns for its ninth year (or 10th season, by CBC’s count).
But where the prime-time dragons popularized phrases like “Pigs get slaughtered,” and “You’re going to zero with a bullet,” the digital-only dragons profess a more laid-back, positive approach. “I think it’s just a great opportunity to invest in the next Shopify coming out of the Canadian startup scene,” says Finkelstein, 31.
While he spends most waking hours at Ottawa-based Shopify, which went public in June with a $1.5-billion valuation, he says the rest of his time goes to advising and investing in small startups.
“I love the mentorship,” he says. “A couple of crazy people took a chance on Shopify when no one else cared about us. If I can play a role like that with other companies, I think there’s nothing better you can do.”
Verkindt, also 31, started in her family’s business, GMA Cover Corp., a Guelph, Ont. manufacturer of parachutes, netting and other textiles for military use. She later founded a related company, Tiburon, to manufacture similar products in the Dominican Republic to aid in disaster relief. She succeeded her father, Glenn, as GMA’s CEO in 2010, but the company ran into financial trouble. Both firms were sold in 2011 to a U.S. investment firm.
In 2012, Verkindt founded OMX, an online platform that connects companies in the defence, aerospace and security industries. “I like really boring businesses,” she says. But she’s excited about being part of CBC’s digital strategy, aimed at tech-friendly millennials who stream information and entertainment on their phones.
Verkindt says when CBC called to solicit her interest in Next Gen Den, they asked a lot of personal questions, including her relationship status (single, but dating) and the status of her bank account (solid, “but I buy a lot of shoes”). Most importantly, she says, “they were interested in my vision of the future of entrepreneurs in Canada, because that’s what this show is about.” She says it’s especially important for popular culture to celebrate Canadian entrepreneurs, “because when I started it was hard to find role models.”
A decade older than his colleagues, Michael Hyatt still shares their interest in a healthy startup ecosystem. Unlike some TV dragons, who studiously avoid investing in the companies that appear on the show, Hyatt says “I have a bias toward wanting to invest.
“Now is a great time to invest in early-stage opportunities in our country,” he says, although he notes that truly great investments are “few and far between.”
During Season 1, Hyatt agreed on camera to invest in five deals; none closed. “The devil’s in the details,” he notes. “When you go back to the company to do your due diligence, what you hear can make your head spin.”
In a CBC studio last week, I got to watch them handle a half-dozen deals in their second day of receiving pitches.
Finklestein told one overreaching pitcher they were asking too much for too little equity. When the founder failed to argue back, he said, “I don’t like that you can’t defend your valuation. You need to get out there into the market and start selling as fast as you can, and then you’ll figure out what this product is really worth.” Until then, he said, “this business is just a hobby.”
Later, two entrepreneurs from Toronto-based Junked Food stepped up to pitch their restaurant and its decidedly different dishes. When they started talking about selling at sports stadiums and setting up next-day delivery across Canada, Verkindt stopped them saying, “You have to make a decision (on which market to chase). Focus is very important.”
But the newer dragons also make mistakes. When a pitcher requested a set amount of money for a certain share of his company, one dragon did the math in his head then ridiculed the entrepreneur for his overoptimism. Afterward, a producer told the dragon the calculation was wrong. That dragon had to repeat his line, using the new, lower number, five times before getting it right.