Janet Bannister hadn’t yet arrived at the Elevate technology conference in Toronto Wednesday, but she was already making waves among the tech leaders and investors gathered there. Montreal-based Real Ventures announced that morning that Bannister is stepping down as managing partner. Co-founder and partner John Stokes will fill the role.
The investor and former eBay executive has been the face of Real for the past eight years, investing in early-stage companies over four funds whose portfolios include League, Clearco, Mejuri and Sonder.
Her departure has stoked speculation within Canada’s tech ecosystem that Real is on its last fund. The firm has struggled to raise a new pool of capital. Those efforts were put officially on hold with Bannister’s move.
In an interview with The Logic shortly after the announcement, Bannister said the decision to step down was hers alone, but acknowledged there’s been tension between Real’s general partners and the limited partners that back the fund.
The interview has been edited for length and clarity.
Talking Point
Janet Bannister is stepping down as managing partner at Montreal-based Real Ventures. She will stay on as a partner and maintain relationships with her existing portfolio companies, but will not pursue new investments with Real as she transitions to a part-time role. In an interview with The Logic, Bannister said the decision was “100 per cent my decision.” She acknowledged the firm had struggled to raise its latest investment round, which is now on hold.
Tell me about your decision to leave Real Ventures.
First of all, I’m not leaving. I’m just moving from a managing partner role to an investment partner role, and over time will transition to a part-time role. I’m maintaining all of my boards, all of my portfolio companies, I’m still working with them. I’m committed to our funds and to our LPs. It’s just that I want to reduce that time, to have the freedom to explore other opportunities—other ways that I can contribute to the Canadian tech ecosystem and support early-stage founders.
Going forward at Real, you’ll be maintaining your existing relationships with startups but not pursuing any new investments?
Yes.
Can you talk more about what led to this move? Is it coming from investors, from partners?
It was 100 per cent my decision. It was not something that the Real Ventures team nor LPs asked for. It came much more from me personally, as I took the time to step back and say, ‘What do I want to do for the next 10 to 15 years?’
Beyond personal reasons for stepping down, was the decision influenced at all by the fund’s performance?
No. The funds are performing very well. That has not been the issue. The [internal rates of return] are very strong. There has been some concern that cash distributions have not been as high as some investors would like. Frankly, that’s a result of having a lot of great companies that are continuing to grow. [Investors] would say: ‘The returns are really high, but a lot of your returns are on paper. That’s great that you’re in League and BenchSci and Tenstorrent and Mejuri, and I see all these companies are on a clear path to become even larger in the future, but at the same time, it’s still on paper.’
Is Real still raising money for a new fund?
When it was decided that I was going to step down, we put the fundraise on hold.
How was the fundraising going up until that point?
It did not go as quickly as we had hoped due to several different factors. We had commitments from some of our existing LPs, but we were still working to close the size of the fund that we thought was necessary to execute on our investment strategy. The two primary concerns were, one, around some of the historical problems with the firm’s partners, including the founding partners [JS Cournoyer and Alan MacIntosh] stepping back. While we believed it was positive for Real in bringing in new partners, there were some concerns from some of our LPs. And the other thing is, even though our returns were top decile, the cash distributions were not.
How strong of an organization do you think Real is at this moment? Do you think it is on its last fund?
It’s hard to predict what will happen in the future. But I know that the existing team is committed to the firm. Real Ventures has done an incredible amount for the Canadian tech ecosystem, and has an incredible portfolio that is delivering top decile in terms of unrealized returns.
Had Real been hitting the marks LPs were looking for, and raised the funds it was targeting, would you have stayed in your role? Would you have felt like you were having the impact on the ecosystem that you’re talking about?
If we raised another fund, I would not have had the opportunity to think about ‘what do I want to do?’ I would have been committed for that time. The fact that we didn’t raise the fund, it gave me the opportunity to step back and think, ‘hey, is that what I want to do?’ I’m interested in having a different sort of impact on the ecosystem. Right now, I’m at the exploration stage. I’m not taking a step back. I’m 100 per cent all in and finding new ways to make an even bigger impact.
