Janet Bannister’s solo fund leads $5M seed round in Calgary’s Fillip Fleet

By Catherine McIntyre, The Logic

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Fillip provides digital fuel cards for companies that operate vehicle fleets. The financing is the first of three cheques that the former Real Ventures managing partner has cut since launching Staircase Ventures, a $34- million fund for early-stage software companies.

Bannister began raising money for Staircase, her first solo fund, after Montreal-based Real’s failed attempts to close a new seed-stage fund of its own. Despite the challenging economy, Bannister expects strong companies to emerge in this market—and she’s offering founder-friendly perks to buy into what she sees as a promising vintage of Canadian startups.

“The fact that her philosophy is different than has been traditional in VC —it’s a huge benefit to our organization,” Fillip co-founder and CEO Alice Reimer told The Logic.

The deal: Fillip raised the all-equity round from a group of new and existing investors that included—along with Staircase—former Suncor CEO Mark Little, Calgary-based Thin Air Labs and San Francisco-based Azure Capital Partners. Reimer said the company plans to use the capital to grow its customer base, including those with larger fleets. Currently, the company mainly works with firms that have about five to 25 vehicles per fleet.

A different approach: A major criticism of Real Ventures was its “spray-and-pray” model, in which an investor cuts many cheques in many small startups. The theory is that a handful of the investments will generate outsized returns and make up for the other losses. But Real struggled to translate its investments into cash returns for investors.

Like Real, Bannister is investing small amounts of money in emerging startups: between $500,000 and $2 million per company. But she plans to do fewer deals and focus her funding specifically on business-to- business software companies. She’s aiming to make 12 investments over three years, or about one deal per quarter. So far, she’s kept that pace. Along with Fillip, Bannister has invested in Toronto-based drug- discovery startup Biossil, and another firm that hasn’t yet announced the deal.

Incentivizing founders: Bannister is also trying a new way to motivate founders by offering them a cut of the fund’s profits. She is setting aside 20 per cent of the carry—the returns on fund’s investments—to founders and advisors. “We should be thinking about our founders as part of our team that we want to support,” said Bannister, comparing the initiative to an employee stock-ownership plan—something she said VCs often encourage their portfolio firms to adopt. “And we want them incentivized to help each other.”

Bannister is also offering founders access to personal health coaching, personal financial advice and a stipend for child care and family support. The perks are meant to set founders up for success in every aspect of their lives, said Bannister, not just at work.

Reimer said she’s already taking advantage of the benefits, like professional coaching, which helped the firm establish a new operational management system. “It’s not easy to fundraise in this environment,” she said. “We really had to work hard to find the right partners who were interested in investing in the vision and potential we have in front of us.”