Amidst a market downturn that may lead to a “venture capital winter,” one Canadian fund is looking to stand out.
Founded in Vancouver in 2019 and operating quietly since 2020, Little Green Bamboo is a $20 million rolling fund seeking to “provide both financial and human capital to founders during the current slowing financial environment,” according to partner Yifei Wang.
Most venture capital firms’ business model orbits closely around the almighty dollar sign. Initially, LGB Capital was at risk of being no different. Today, however, the firm aims to look at investment through a novel lens.
“We observed that many investors who shared our values and principles by paper did not follow through with them when push came to shove,” explains Wang to Techcouver. “This scared us, because we knew some of these investors to be good people, and we couldn’t understand why good people with good promises didn’t follow through with them.”
Afraid that they too would fall into the same trappings, the folks behind LGB Capital took a gap year. The firm stopped proactively investing and instead conducted interviews with founders, non-profits, academic institutions, and government institutions in order to “create frameworks to protect our mission.”
LGB’s obsession with getting the details right runs through its DNA. The company was founded by a team of entrepreneurs and scientists “with a deeply sincere intention to offer support and value to founders and academics across the world.”
Together, the small team forged a set of principles designed to keep LGB Capital thinking long-term.
“The way we invest—as opposed to the typical VC or private equity companies—is the difference between owning and renting,” says Wang. “And people do not wash rental cars.”
Some of LGB’s investing principles include “Date to marry, analyze to invest, and think in decades” and “Markets drive success, and people drive failure.”
The company has invested already in several local firms, including Big Whale Labs, Mintlist, Totalflow Medical, and ABOzymes Biomedical. Much of LGB’s portfolio lies in stealth, though Wang says their combined valuation is north of $300 million.
The firm wants to support and nurture “innovators and scientists who are commercializing technology that promises substantial social impact.” LGB aims to bridge the gap between scientific discovery and the commercialization process.
Flexing its long-term lens, LGB taps early roots by investing in university ecosystems, including UBC and Simon Fraser University in BC, as well as the universities of Toronto and Waterloo in Ontario. For example, Totalflow, ABOzymes, and Neupeak Robotics—which makes autonomous fruit harvesting robots to help farmers fight chronic labour shortages—are all connected to entrepreneurship@UBC.
Because LGB Capital is a principle-oriented operation, the firm wants to instill such importance of values on their portfolio members. To aid this goal, the company is currently working on an open-source research project “dedicated to helping purpose-driven founders better establish and protect their values and principles.”
The goal of this project, Wang informed us, is to create an open-sourced library of documents and tools.
“We are actively looking to collaborate and work with nonprofits, impact investors, lawyers, academics, stock exchanges, and regulatory bodies on this project,” he noted.
Having principles and protecting values can help keep a company afloat and on course through turbulent times, which have surely already begun for many, and may worsen yet. However, LGB does not subscribe to the “VC winter” mindset. Wang figures that while the general sentiment of venture capital in 2022 is now to sit on the sidelines, “we value experiences of failure more than of success, and we cherish the persistence and open-mindedness to keep trying.”
Thus, LGB marches on.
Although, there is another reason. Wang makes a good point in saying the world requires innovations which can solve socio-economic and humanitarian problems more than ever.
Why sit and watch the world crumble when you can fund its rebound?
“Our awareness of these problems is partially what drives us to tirelessly support founders,” Wang tells Techcouver. And by not relying on early exits or secondary buyouts to profit, LGB can afford this focus on big-picture problem solving.
Besides, a good investor knows there are opportunities in any market.
“Ultimately, we believe that there are many suitable opportunities to invest in and support founders in the right circumstances,” Wang says. He likens relying on market timing for your return on investment to reading tea leaves.
“You cannot predict the market,” affirms Wang. The coming times will change investor behaviours, he believes, but who can say exactly how? Rather than stare at a crystal ball, LGB will “continue to be actively investing” while operating in adherence to its own principles.
For Little Green Bamboo, “there is very little benefit in trying to predict the economic conditions of the market in two or three years,” Wang explains. “Instead we spend every day doing all that we can to help our founders succeed now and 10 years in the future.”
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