The pandemic upturned venture capital operations, from conducting due diligence and meeting start-ups over Zoom to changing how fund managers interacted with LPs.
Now firms are finding that the new way they used collaboration tools and worked from home to communicate and find deals virtually can also pave the way for geographic expansion.
Take, for example, Icon Ventures. The 18-year-old firm, which makes Series B and C investments, told Venture Capital Journal that it is broadening its global footprint and is seeking deals in Europe. It has also expanded its talent program and opened operations in Toronto to help its portfolio companies recruit engineering talent.
Joe Horowitz, managing general partner of Icon Ventures, said he feels that one positive effect of the pandemic is that firms can go global while maintaining a small team and without opening up a large office space.
“We had been thinking about Europe for a long time and the pandemic accelerated that decision,” he said. “Working in a pandemic has got us all quite comfortable using Zoom while staying home, while still building new relationships and working with our portfolio. We expect those behavioral change that everyone in venture has experienced in the last year will last beyond covid.”
The firm, which has offices in Palo Alto, California, and San Francisco, is now officially in Dublin, Ireland, too, where Icon Ventures general partner Michael Mullany relocated. Mullany is a native of Ireland and will work from home while looking at deals throughout Europe.
“The companies coming out of Europe are stronger than ever, particularly in the UK, Germany, Ireland and France,” Horowitz said. “The region is worth paying attention to.”
Mullany joined Icon Ventures in 2014 and has led the firm’s investments in Alation, Timescale, Remesh, Paravision, Datrium (which was acquired by VMware) and Streamlabs (purchased by Logitech).
Icon Ventures was previously called Jafco Ventures until 2015, when it rebranded. The Japanese investor remains the largest LP of Icon, and Horowitz said his firm continues to maintain an Asia business development team in Tokyo. But he noted that the expansion to Europe is a significant step in the life of the firm. Icon is currently investing from its fifth fund, which it expanded in 2018 to $375 million.
“Expanding our geographic footprint wasn’t on our radar screen this year until we saw how efficient we can do it under covid conditions,” he said.
Horowitz said the firm has not yet invested in a European company from its expanded reach. He anticipates Icon Ventures will continue to make four to six investments a year even with a partner now sourcing deals in Europe.
Recruiting services in Canada
In addition to Europe, Icon has also established its Canadian Engineering Talent Program in Toronto as part of its value-add recruiting service it offers portfolio companies. The firm, like most others in venture capital, helps its portfolio to recruit senior managers and C-suite executives.
Horowitz said the program is meant to help the firm’s portfolio recruit engineers and establish operations in Canada, which he noted will come at a significant cost savings than in the San Francisco Bay Area, for example, but without sacrificing quality.
“Toronto has great universities feeding the talent pool and plenty of local government support,” he said.
As part of its expanded talent program, the firm has brought on board the recruiter Armand Obreja as talent manager in Toronto to lead the firm’s effort.
Horowitz said Obreja has already helped two of the firm’s portfolio companies recruit Canadian engineers.
Horowitz said the expanded talent operations also gives the firm an impetus to invest more in Canada.