Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Alireza Rahnema was recorded in January 2019.
Alireza Rahnema, Principal and General Partner at 7 Gate Ventures, talks about the Vancouver startup ecosystem and his firm’s investment thesis.
Sramana Mitra: Let’s start by getting you acquainted with our audience. Tell us about you. Tell us about 7 Gate Ventures. What kind of investment strategy are you following?
Alireza Rahnema: I’m excited to talk to you about 7 Gate Ventures. Before I do that, I’ll give a little bit of background about myself. My background academically has been in science. I have a Master’s in physics from McGill University of Montreal. My work has taken me all over the world. I’ve had seven to eight years of experience working at Nortel Networks back in early 2000 before all the telecom boom happened. My work background has mostly been in technology.
After working at Nortel, I went back to my home country in Iran after being away for almost 10 years. Along with my partner, we were behind the first e-commerce sites in the nation leading to one of the largest technology company. Ten years later, we had the largest software and service platform in Iran with partnerships from MTN, an African telecom provider.
That process led to LST, a venture investment in the region, generally in the Middle East. We turned our first investment to the largest VC’s in the country. That success allowed us to look at other opportunities globally. Almost seven years ago, both myself and my partner left the country. I have since been living in the States and my partner has been living in Vancouver, Canada. We have been deploying our own capital to explore 7 Gate Ventures.
7 Gate Ventures initially started as a family office/marketing Bitcoin. We had $3 million worth of capital. The main focus of this fund is to identify early-stage companies from entrepreneurs that we identify as people that we can work with. We would like to think of ourselves as entrepreneurs and allowing us to add value to the early stage startups that we invest in. To this date, we have 22 companies in our portfolio – 75% of them being Canadian startups, the other 25% located in Silicon Valley.
The overall strategy of this fund was to identify talents and entrepreneurs that we think are geared towards growing their company and investing in them early. We generally are the first check in the company. We help them grow and reach those KPIs and milestones that make them investable in their later stage in their growth. That’s what we had built in the Valley to help them raise. We tend to invest alongside with them. So far, we’ve had three successful exits. I’m very happy about that. There are some companies that we are excited about in the portfolio. I’m helping them rise in the Silicon Valley ecosystem.
Sramana Mitra: Let me double-click down on a few points that you’ve made. Let’s first talk about geography. You’ve talked about Middle East, but the fund that you’re investing right now is focused primarily on the Canadian ecosystems – specifically Vancouver with a little bit more of West Coast United States. Is that an accurate assessment?
Alireza Rahnema: That’s right. We have two offices. One office in Vancouver, which is the larger one. We have another office in San Francisco. Our office in Vancouver is around 5,000 square feet. We have leveraged a strong relationship with University of British Columbia in Vancouver to identify those technical founders that are coming out of the science and electrical engineering department out of UBC and Simon Fraser University, which is another highly reputable university in Vancouver.
We invest early in them and help them grow and reach a pay grade that could potentially raise their next round in the Valley. In the past year, we have started to look at the Waterloo and Toronto corridor, which has a great pool of technical talents coming out with entrepreneurial aspirations. There are opportunities there where we can actually build. We try to add value and build other businesses there.