On today's #SpotlightSaturday, read through the story of one of QUAAF's former CEOs, Hamilton Petropoulos, talk about his experiences in VC & Growth Equity and how QUAAF helped provide him with the foundational knowledge to advance his career. Moving up to CEO from an Analyst position, Hamilton managed to cultivate relationships and gain leadership skills that he was able to transfer over to the work force. Now working at Generation Capital, Hamilton sheds light on how to leverage his experiences after graduation.
Give us a quick summary of your background prior to your Master's and role in Generation Capital.
I work as an Investment Associate at Generation Capital – a Toronto-based family office. In my current role, I focus on Venture Capital / Growth Equity direct investment opportunities and macro-economic analysis for the broader portfolio. I feel fortunate to have landed where I did because it’s been a great experience and exposure early on in my career, as I’ve gotten a chance to work in finance at both the micro and macro level. QUAAF was pretty foundational in setting me up for my career; it provided me with a great exposure to the alternate asset space which is the major focus of my role today.
QUAAF was pretty foundational in setting me up for my career; it provided me with a great exposure to the alternate asset space which is the major focus of my role today.
You had quite the experience in QUAAF; you were promoted after four months from Analyst to CEO, tell us about the journey you had with the team.
It was quite the transition after four months. I think what I enjoyed the most during my time being an analyst was getting so much exposure to a realm in finance I didn’t have exposure to before. I had worked in hedge fund sales prior to joining QUAAF, but I didn’t have the full understanding of the analytical side of it. That was one of the reasons I had joined QUAAF in the first place, because you couldn’t get this kind of exposure anywhere else. It’s amazing to think that one decision opened up all doors for me and I’m now currently working in alternative assets post-graduation. My time as an analyst was fundamentally different than my time as CEO, and what I loved about my CEO tenure was the tangible leadership experience I gained from working with a large group of people, which I wouldn’t have otherwise gotten until 10, or 20 or so years into my career.
For me, it was an experience I couldn’t pass up; managing and empowering 30-50 people under you, as well as stewarding the strategy for the entire portfolio, is a totally different feeling from analysing and understanding the metrics. There were a lot of policies we had put into place after taking over and there was a whole change management element to it as well. There were also retention challenges due to the program turnover every six months, which was something we worked very hard with the previous executive team to solve. What I loved about QUAAF was that I gained such a variety of skills and experiences, all of which I carry with me to this day and am very appreciative of.
Generation Ventures was the first full-time job you’ve had after coming out of three degrees, and after managing the ~50 members of QUAAF, your team is now much smaller. What led to the decision of pursuing a smaller shop? Was it like you had originally envisioned, and were there any challenges working with a smaller group?
A lot of finance grads typically want to work in PE or VC after graduating, but I find that the typical path is working in investment banking or consulting for a few years before making that leap. Generation Capital gave me the opportunity to make that leap right out of school as well as providing me the opportunity to learn under a team of seasoned executives. I’ve been fortunate to have a number of great mentors at the firm who have helped to guide and teach me in my career; this was definitely a major draw for me working in a smaller team at Generation Capital. It was definitely a shift going from a massive team down to a much smaller one, but I’m really happy with the outcome and wouldn’t change where I am at today!
While its harder to put my leadership experiences from QUAAF to the test in a smaller team environment, one area where I have found it valuable is in governance work on some of our portfolio companies and volunteer organizations. Over the last year, I’ve taken on a few board roles and that experience from QUAAF of working with and managing people, and understanding how to get the best out of them, has been a great translation into my board experience working with CEOs and driving the best outcomes for a company.
Tell us more about your board experience and function – there are a lot of VC funds that have started to look at adding more value besides capital to their ventures, such as Georgian’s impact team of AI developers helping out all their investees. What are your responsibilities as a board member in this respect?
I sum it up to being a trusted partner for your portfolio company. You really want to be someone that a CEO, or other C-suite leader, can come to with a problem that you can either help them solve, or find someone to help solve that problem. There is definitely a trust factor involved in that and it is something that any board member needs to build over time with their portfolio manager.
I believe where real, true value is created by a board member is helping augment the areas where CEOs or other managers may have gaps. If it’s an early stage company, it could be working on a financial model because the founder is more tech-focused than finance-focused. It may be helping to develop a go-to-market strategy, such as building out a sales funnel and working through how to get all the way to a closed sale and what that process looks like. It can also be product management, thinking through a roadmap of features that offer the most value-add to customers to boost contract values and improve user stickiness. There are a lot of different hats that a board member can wear to help the CEO and company drive better outcomes.
I sum it up to being a trusted partner for your portfolio company. You really want to be someone that a CEO, or other C-suite leader, can come to with a problem that you can either help them solve, or find someone to help solve that problem.
Could you tell us a bit more about the overall investment thesis of Generation Ventures?
Our core thesis is that we see a big need to help legacy companies (i.e. supply chain, retail, finance, etc.) digitize and catch up with the tech incumbents that have dominated the globe for the past decade. Over this period, real productivity for most industries has stagnated or declined which is surprising in the age of smartphones and technology. Agile companies that were tech first – the Amazons, Facebooks, and Googles of the world – were able to ride this wave of digitization and smartphone adoption to dramatically improve their productivity and become the dominant companies on the globe. If you look at the changes to the top 10 companies by market cap over the last decade, its shifted to being almost all tech companies. In contract, legacy companies faltered as they were not set up operationally to ride that technology wave. Their old processes, procedures, and infrastructure couldn’t match up with or handle open APIs, smartphone data, and the inflows of information from all these different technologies. As a result, these legacy companies lost major market share to new technology upstarts. A good example is the banks, a lot of which still run on COBOL which is a 30-40-year-old programming language and have had difficulty catching up to a host of new FinTech companies.
Our thesis summed up is to find solutions to help these legacy, non-digital companies rapidly digitize and catch up, more specifically in the areas where there is a recognizable demand. A great example is in retail; we’ve done a lot of deals in the smart retail space because what we found was that there was a huge push to eCommerce over the last decade and people forgot about digitizing the frontline, brick and mortar store. No matter what you read that says brick and mortar is dead, it is not. What retail has become instead is an omnichannel experience, that leverages eCommerce and brick and mortar together to offer customers a better overall experience. An example of this is frontline work productivity. You’ll see a couple deals in our portfolio, like Statflo or Nudge Rewards, which specifically focus on driving higher productivity and higher efficiency for frontline workers. Frontline workers, despite being mission critical to all retail operations, have been neglected by enterprises leading to high turnover and low improvements to productivity. Both Statflo and Nudge Rewards have found ways to provide these workers with the training and tools to more effectively perform in their job, which can improve the customer experience and lower internal costs. That’s emblematic of our entire thesis, finding the mission-critical areas for legacy companies to digitize in order to remain competitive in with their tech competitors.
What do you look for in your investments and how do you distinguish between the good investments and great ones from the vast number of pitches you hear?
When we look at companies to invest in, we’re looking for companies that have digitization plans but we also look for tools and solutions that are ready to be commercialized today. That’s a critical component of what we look for - we want to make sure we invest in companies that have de-risked that commercialization element. For our team, we believe that it is a safer investment to go for a company that has already proven out, or is on the cusp of proving out, its business model rather than one with an early deep-tech opportunity that isn’t close to commercialization. While this strategy does trade off the higher upside in investing in non-commercialized deals, we feel that that trade-off is warranted given the difficulty in successfully demonstrating product-market-fit with your customer base in order to scale.
What’s your favourite deal you’ve done so far and why?
If I had to choose, there’s a company called Synapse that I’m on the board of, and they’re in the learning and development space. More specifically, they’ve built an automated software platform that improves the design of training content for large enterprises. When you think about L&D content, people usually ask about how it’s delivered, can it be delivered in an appealing format, and how does it get out to the content users. Rarely do you hear about people talk about how that content is created, if there’s a design framework or blueprint for it, or does it follow the instructional design principles of content aimed at adults to ensure its coherent and consumable. Synapse’s CEO used to a consultant in this space and saw that the lack of an automated workflow was creating a major content creation bottleneck for L&D departments. This bottleneck has only gotten worse as millennials have become a larger component of the workforce. This demographic has a real hunger for content to help them do their jobs better, more efficiently, and to better themselves overall in general. There just wasn’t a scalable way to constantly create and push out new content. We were amazed with how big a problem this was and that nobody was talking about it; for Generation Capital this was the kind of deal that fit perfectly in our scope with regards to digitization tools. There also a massive macro tailwind when thinking about the demand for L&D departments to work remotely, especially in today’s environment with COVID. It was the best of both worlds – a company with a tool ready to be commercialized with no real market competitors, as well as a great, thematic trend stacked behind it. I’m very excited to see how Synapse evolves over the next 12-24 months.
You also have a law degree – what value do you feel you gained from it, and do you use any of what you learned from that experience in your work today?
My JD is incredibly valuable to me in venture. I was shocked to find that half my work on some days is legal related in some capacity. If you’re ever going into a PE-esque role where your job involves structuring deals, particularly if you’re on the origination side of the team, having a legal background is critical when putting together a deal. On any given deal, I would leverage my JD in tasks such as assembling a terms sheet, conducting legal due diligence, governance, voting thresholds, and so on. There’s so much more from a legal standpoint that goes into deal structuring - way beyond “is it a good company to invest in”. Having both the legal and financial side has been a huge asset for me at the firm. It’s a continuous process of understanding a company’s legal structure and their financial structure, so I’m very happy I did this along with my MBA, it’s been invaluable.
I would definitely advocate for getting some sort of legal understanding if looking to jump into a PE role because it’s just so critical to have. Any sort of law background is just incredibly advantageous to have.
What would be your advice to the current Master’s students at Smith to make the most of their one year?
Never close a door....
... There are so many different opportunities to take advantage of through Queen’s, QUAAF being one of them. Being able to try so many different things in my MBA really allowed me to get a feel for what I wanted to do in my career after graduating. I think QUAAF and my MBA were pretty foundational for me going into venture post-grad. I would say always take on different opportunities and don’t say no because you don’t know if you’d like it or not – try it out, because it can be surprising how much that opportunity changes your perspective. I originally thought I was going to work in law right out of school, working at Bay street doing some form of commercial securities or M&A law. I actually chose to do a full pivot to investments mid-MBA, and a lot of that is because I found my passion in finance, in particular alternative assets. If I didn’t do QUAAF, its likely I would be in a very different position or career path entirely.
I would say always take on different opportunities and don’t say no because you don’t know if you’d like it or not – try it out, because it can be surprising how much that opportunity changes your perspective.
At our age, there’s just so much to learn in life. We’re often forced to make big career decisions early and we just don’t know what’s really out there yet. I look back at the end of law school and even back before undergrad, and my perspective of what I thought I wanted in life has changed once every six months because of the new experiences I had. Funny enough, in undergrad I really didn’t like business – I didn’t have a passion for it and didn’t like commerce, and it just wasn’t for me. Undergrad was also a lot more theoretical, as opposed to MBA being practical and case based. I was happy to have stepped back and done an MBA because I wanted to try a different experience and it worked out for me. You just need to have an open mind and try whatever piques your interest.
What’s a book, movie, TV show, or general activity you like to do when you unwind?
In general, I usually unwind by finding a good book to read – both as a way of keeping my mind open as well as a way to just relax at the end of a long day. One book I’m reading right now that I love is called Never Split the Difference by Chris Voss, and it’s about negotiation and how to approach negotiating with people. It’s actually written by an FBI hostage negotiator who was a genius at negotiating because he went against the grain on the how engage with people in negotiations. Typical top negotiators are taught to that assume everyone is rational; he said no, people are not rational, they’re irrational and to negotiate effectively you need to understand the underlying reasons of why and leverage that understanding to negotiate with them in a better way. As someone who spends a lot of time negotiating deals back and forth with people, it was a pretty important book for me.