Novacap, the Canadian private equity firm with more than $5.8 billion in assets, has been around since 1981.

It was founded by entrepreneurs for entrepreneurs, and according to Kristin Smith, Partner in Novacap’s $1.8 billion tech, media, and telecom fund, and HR tech lead, “what differentiates us is our true…partnership-based culture”.

“Being a trusted partner to our management teams is something we instill across the organization” – therefore Novacap sees “first-hand the challenges companies are facing around HR, recruitment, talent management and retention”.

Kristin Smith, partner, Novacap.

A core part of Smith’s role is to not just look at what tech companies Novacap wants to invest in, but also to work on the transactions themselves and support existing portfolio companies with strategic decisions.

The standout portfolio company in this sector is LGI Healthcare Solutions, an HCM giant focused on the healthcare industry, which “has particularly complex HR needs.”

UNLEASH is thrilled to welcome Smith as our VC Voice for March – she is our eighth interview in this Editorial series, and she follows in the footsteps of Lucy O’Brien from Eight Roads, Acadian Ventures’ Thomas Otter and Igor Ryabenkiy of Altair Capital.

Read on to find out Smith’s exclusive insights into her route into investment, and why HR teams must seize the opportunities presented by technology, and particularly AI.

Allie Nawrat: How did you get into investing? What is the one piece of advice you would give to your younger self?

Kristin Smith: Investing came about later in my career, I didn’t even know what private equity was in university.

Prior to Novacap, I worked in investment banking, advising businesses who were looking to sell or raise capital. I loved working with entrepreneurs and management teams.

After my children were born, I decided to return to Canada from Denver, Colorado, and it provided me with the opportunity to consider a potential career change.

I wanted to continue to work with mid-market businesses in the technology sector and luckily, I found Novacap.

It’s been an amazing journey and being an investor is even more rewarding and interesting than I could have imagined.

There’s three pieces of advice that I would give to my younger self:

1. Don’t underestimate the importance of the relationships you build early. Later in your career those relationships are like gold. It’s amazing how often I will reach out to someone today who I’ve known since university or early in my career for advice.

2. The first 100 days of a new job is where you make your reputation so don’t waste them.

3. It’s a smaller world than you think and, similar to my first point, you never know when you’ll run into people from your past. Always treat people with respect and act with integrity. It’s a win-win as you will be much happier, those you work with will be happier and it will serve your career well in the long run.

AN: As an investor, what gets you up in the morning, and what keeps you up at night?

KS: My family is what gets me up and that is what drives me. While my job can be intense, family is what matters most.

That being said, I am lucky to have found a job that I love. I decided a long time ago that life was too short to dislike what I do. Luckily, I’ve found something interesting, where I am learning every single day and that I am passionate about.

I really try to avoid letting work related stress keep me up at night. It’s not that it never happens, however I try to remember that I can’t change what is in the past and what matters is how we move forward.

AN: Who inspires you, and why?

KS: Founder CEOs inspire me.

Building a business from nothing, being resilient through all the trials you experience as CEO and rallying a team around you who believe in you and your vision.

I love meeting founders, there is something special about people who have the guts and passion to start their own business.

AN: What makes great founders and CEOs in your view? What makes a good pitch, and what are the common mistakes you see?

KS: There are three traits I like to see in our founders and CEOs and by association, their pitches:

1. You need to be able to inspire your employees, your customers, and your investors.
2. Not being afraid to answer difficult questions honestly and frankly. Dealing with difficult subjects head on demonstrates both leadership, but it also builds trust with employees and investors.
3. A solid grasp on the company’s core metrics. As investors, we are financially minded people. The story and strategy are key, but having a solid grasp of KPIs is also important.

The common mistakes are:

1. Businesses trying to chase too many things without a clear enough growth strategy and a tangible plan to achieve it.
2. Not acting fast enough when changes need to be made. We live in a world that is constantly throwing curve balls at businesses: Inflation, COVID-19, talent shortages and cyber crime are only a few.

CEOs aren’t always going to get it right but don’t wait too long when change is needed. As CEO, you have to make a decision and course-correct if it wasn’t perfect.

AN: What makes a company stand out in the overcrowded tech space?

KS: We specialize in mid-market buyouts – at that stage, I often feel that proof of excellence is in the customer quality and retention.

A company with a top-tier list of highly satisfied customers is doing something right.

AN: What are the most exciting innovations on the horizon for tech, and particularly HR tech?

KS: There is just so much opportunity in HR to leverage technology to simplify and improve hiring, retention and talent management, and to manage increasingly disperse, contract, gig and global workforces.

I’d be remiss not to mention AI and the huge impact it can have on things like making better hiring decisions and using generative AI to help with HR support and operations.

It’s an exciting sector to be in!