Pursue Smart Growth with Douglas Holt

Pursue Smart Growth with Douglas Holt

Kelly Kennedy: Welcome to episode 102 of the business development podcast. And on today's expert guest interview, we have associate VP of investments from Alberta Innovates, Douglas Holt. Stick with us. This is an awesome episode. You're not going to want to miss it.

Intro: The great Mark Cuban once said business happens over years and years.

Value is measured in the total upside of a business relationship, not by how much you squeezed out in any one deal. And we couldn't agree more. This is the business development podcast based in Edmonton, Alberta, Canada, and broadcasting to the world. You'll get expert business development, advice, tips, and experiences, and you'll hear interviews with business owners, CEOs.

And business development reps, you'll get actionable advice on how to grow business. Brought to you by Capital Business Development, capitalbd.ca. Let's do it. Welcome to the Business Development Podcast. And now your expert host, Kelly Kennedy.

Kelly Kennedy: Hello. Welcome to episode 102 of the Business Development Podcast.

Wow. Blows my mind. We have crossed 100. At this point, we've actually done this in less than a year, which is absolutely bonkers. I'm happy to be here. Happy to have you guys listening. We have an absolutely amazing, amazing expert guest interview for you today. Today we are chatting Alberta Innovates with Doug Holt.

Doug has over 20 years of leadership experience. He's a dynamic force across the financial services, government, technology, and education sectors. His expertise in buy side and sell side financial services, particularly in credit analysis and structured finance, distinguishes him as a key player in the complex world of investment banking.

As the Associate Vice President of Investments for Alberta Innovates, Doug is instrumental in steering the corporation's research and innovation investments. His strategic vision significantly impacts Alberta's post secondary institutions, entrepreneurs, Accelerators and all contribute to the region's economic and technological growth.

Beyond finance, Doug's leadership extends to technology and education. His knack for managing high functioning teams, implementing corporate strategies, and conducting intricate financial analysis showcases his multifaceted skill set. Doug Holt stands as a visionary leader, seamlessly navigating the intersection of finance, technology, and education, shaping the future defined by innovation and success.

Doug, it's a pleasure to have you on the show.

Douglas Holt: Kelly. Thanks for having me with that introduction, man, I would love to have you just come around and just hang out with me on a regular basis.

Kelly Kennedy: I'm just thankful to have you on the show. I I've been wanting to have this conversation with yourself and Alberta innovates for a while.

And yeah, it's been, it's been a back and forth. We've been planning this for months at this point.

Douglas Holt: Yeah, yeah, we have. It's been great to be here. I'm glad. And the honor is mine.

Kelly Kennedy: The honor is mine. And, you know, congratulations on an absolutely amazing career. We'll talk about it today. But, you know, you have such a varied career.

You've done so much. So the honor is mine. It's truly mine. You know, take us back to the beginning. Obviously, we're going to talk Alberta Innovates. today and we're, we're psyched about that. I know we got lots of founders, entrepreneurs listening and, and wanting to know more, frankly, about the ecosystem.

When we had Catherine Warren from Edmonton Unlimited, it was one of our bigger shows, lots of people interested. Lots of people know that Edmonton, Alberta as a, as a tech sector is a booming, booming place. You know, we're internationally recognized at this point. Probably the fastest growing tech sector in the world at this point.

And it's pretty amazing. It's pretty cool to be right dead set in the middle of that and just have our show coming out right around the same time. Just, just synchronicities, but, but, you know, Doug take us back to the beginnings, you know, I like to talk, it's not just about, you know, the, the end goal, I love to talk about the journey and tell us a little bit.

Who is Doug Holt? How did you end up on this path?

Douglas Holt: Yeah, interesting. It's it's been a long and varied one. I'm I'm the sort of the poster child for reinvention. I think you could say I was originally way back when I was a teacher, I taught high school. And I taught math and phys ed, and I did that for a number of years, and I quite enjoyed it.

That was, I always, I've always had a passion for helping people. And so that was what drew me to that space, started down that path. And it was great. But then I got to a place where I was like, you know, there's, there's something else for me. There's something that's just niggling at me. And I went back to school, did an MBA.

And I just discovered this love and this passion for business. Then I'm Went off into the into the business world was working for a tech company helping them raise, raise dough. So the head of investor relations there, as well as helping with their marketing. And it was a tremendous experience, a wild ride there.

They raised a lot of capital. I learned a lot in that process too. Unfortunately, it was a situation where. Things didn't work out and I won't go into details on this podcast, but through that process of, of capital raising, I was introduced to a fellow that was down in Santa Barbara and we we became tight and he was running an ETF down there, asked me to come down and started to work with him and I was running their energy and chemicals portfolio.

And we took that that from 80 million under management us to just over a billion. So yeah, pretty exciting. And what that was, that was a cool ride. Founded a company up in Alberta just after the oil fell off of a cliff. Because we saw an opportunity there in Alberta to deliver debt capital solutions to EMPs and work there for a bit was a challenging situation because just for whatever reason we were trying to deliver U. S. middle market debt solutions to these EMPs, but at that time, I think we were a little early, we, our market timing was a little early because there was a belief among many that The banks were going to come bail them out and we're going to take care of them and they didn't need other solutions. And so it was, we didn't get the traction with that.

We thought we would and when you got three kids and you got the mouths to feed at home, you've got to figure out what you're going to do quickly. I pivoted and worked with some, some guys in investment banking for a short period of time delivered on a number of engagements, they're working on mainly debt, restructurings and debt, financing's a couple of M and A opportunities.

And then an opportunity came up with Albert innovates, and I, it was an interesting time because I started to look at the world and I said. You know, there are so many winds of change about right now. And if it was, if it was just artificial intelligence, for example. That would be world changing. That would be an unbelievable opportunity to get involved in.

And then currently, you know, in Edmonton, that's an amazing space to be in. But when you layer in IOT, when you layer in blockchain, when you layer in AR, VR, 5G the connectivity and autonomous robotics, all of these things coming at the exact same time, it was evident to me, I was like. Well, the world is going to change dramatically.

It's going to change fast and I got to get smart in this and I got to get smart now. And the opportunity with innovates was a great one where I could come in and I could be exposed to all the different changes in the markets. What's happening here. The new markets that are emerging in these respective industries and the, the way these technologies are going to play off each other and how they're going to help companies grow and challenge themselves and change in that time.

You know, it was really an interesting time because. With oil staying down for as long as it did it really forced a structural change in the Alberta economy, wherein a lot of people left oil and gas for good, and they decided they were going to pursue something else. And so we have this, this groundswell of new entrepreneurs bubbling up that are looking at the world differently, that they're pursuing global opportunities, and it's been a really exciting time in the upper ecosystem because of.

All of the changes we've seen, and I've just been happy and one of the happy to be there to be present for it and to be able to watch it and help facilitate some of that growth during that.

Kelly Kennedy: I'll be honest. I, I wasn't aware because I was in the oil and gas sector for many, many, many, many years. So I remember 2015.

Yeah, well, we, we got through it. Massive pay cuts, massive restructurings. I remember I remember at the time they kept coming back for more discounts. So you get. They'd reach out initially in like, I think it was like 2014, mid 2014, mid 2015, and said, Hey, obviously we're going through a bit of a downturn.

We need a little bit of support. Will you give us like a 10 percent discount on, on services? It was like, Oh yeah, no problem. A month later. Oh yeah. Now we need like another discount. A month later, another discount. Oh, and by the way, we're pushing your payment terms to like 120 days. It's like, Holy cow.

Yeah. You, you know what? You had a, you had a brilliant idea. You know, like you, like you said, maybe just the timing might've been just a hair off, but like it was a big, big problem.

Douglas Holt: Yeah, massive. And I mean, it ended a lot of companies and that's just the reality of it.

Kelly Kennedy: We were in the inspection space at that time. And yeah, I think probably at least 50 percent of our competition folded like it was just it was an absolute bonkers time to be an oil and gas business.

And you're right, it never it did recover. But I'll be honest, it never did recover, not to the same level, not to pre 2014 levels. It never did.

Douglas Holt: No, no, it didn't. It's I do think it's structurally changed. And I think it's been to the benefit of Alberta as a whole in the long run, because there's, there is more diversity, there is more opportunity in this province now, and I think as I go forward as an economy, it's going to be more resilient than maybe it has in the past.

I think it's about 7 percent of the workforce is now engaged in tech. You know, where historically we've, we've built our economy on oil and gas and agriculture, and in both instances, you know, you've got a suite of, well, you just talked about the service industry that sprung up around oil and gas restaurants, hotels, all of those things were all built around that industry.

And so we've got to have that breadth. Of diversity in order to remain a little more resilient than I go for.

Kelly Kennedy: Yeah, yeah, and you're absolutely right. It's like, you know, you know, we, we grew up. Are you Albertan all the way like you grow up here? Okay. Okay. So, you know, just like growing up in school, we were taught, you know, like, obviously you get out, you're going to work in oil and gas.

It doesn't really matter what you do. You're probably going to end up in oil and gas because right down to McDonald's, it's all paid for by oil and gas dollars. And so you're, yeah, you're right. It's like, I'm not sure that without 2015 happening the way that it did and making people like really leave the sector.

And I know a lot of people did, you're absolutely right. And we'll never go back because it was just, it was, it was horrible, right? Like that, that shakeup just destroyed careers for a lot of people, destroyed businesses for a lot of people. You know, do you think, do you think. Obviously Alberta is energy based.

We have been forever. Do you think that that's going to shift over the next decade? Do you think, do you think we're going to have a major shift? Like obviously with all this tech booming up, with Alberta Innovates funding so many great new ideas trying to, you know, expand us as a tech leader in the world.

Do you think that we can get to a point where tech You know, at least is a 50, 50 matcher with energy.

Douglas Holt: You know, I think down the road, that's, that's a potential. The good news is we're so far down the path now with tech and the, and, and the, the winds of change are upon us is no longer theoretical. And if artificial intelligence is really going to have such a dramatic effect, we're actually feeling the effects of chat GPT and things like that alone.

I mean, how it's changing and what's happening. So I don't think there's any. Scenario where Alberta starts to back away and go, no, you know, we're going to head back straight to energy and that's going to be our deal. And that we're just going to so I think that we're moving in that direction, how rapid that happens.

And then how quickly we move there is really a function of how. How aggressively we commit ourselves to supporting the diversification of this ecosystem and entrepreneurs and founders and promoting that growth. We're poised, I think, for tremendous growth in the next decade. And it's just, some of it is just timing.

I mean, let's look at the facts. If you are a millennial and you're living in the GTA and you want to raise a family, where in the world are you going to go live? Where are you going to buy a house? You can't, you can't afford one in GTA. You can't afford one in Montreal, Vancouver. So you, you're, you're, you're starting to figure out, well, what am I going to do here?

And, and that's why we're seeing the highest net migration into this province since they've been measuring it. And that's over 50 years. So right now we're just seeing an influx of people coming here, wanting to set up their lives here and run their lives here. And I think with that, you're going to see a lot of them be, be entrepreneurs that are bringing that diversification.

They're bringing a different perspective. With it. So the lowest cost of living in the province or in the country the lowest corporate tax rate, you know, these things are just all coming together to create a perfect storm for a really tremendous period of growth, I think, for Alberta. So I'm really, really bullish on what's going to happen here in the province in the next 10 years.

And then you layer that on the fact that we've already got this. Tremendous, all these tremendous supports in the ecosystem that are ready to go and they're already activated. It's not like this is something we're thinking about doing, we're, we're hitting it and we're in, you know, we're shifting on a third into fourth gear on a lot of this stuff.

So as that more of that energy shifts this way, I think there'll be even more.

Kelly Kennedy: Yeah, and it's so. funny to you because I only really started to have my eyes open to how big this sector is. This tech sector is in Edmonton when I started the show because like I said, I was, I was very much an oil and gas background.

It wasn't until I started the podcast and really started speaking to, you know, a lot of founders locally. That I recognize, holy cow, like Edmonton is a powerhouse and we didn't even know it. Like I feel like there's a lot of Edmontonians that don't even recognize, you know, how strong we are in tech or the fact that, that Edmonton is one of the fastest growing tech sectors in the entire world.

Like. People think it's like, Oh, it's Silicon Valley. When they think about tech, it's like, no, you need to be thinking about Edmonton.

Douglas Holt: Yeah. Like, I mean, just let's just take artificial intelligence alone. The depth of knowledge and the history that exists in Edmonton is incredible. Like AlphaGo, things like that, that all came out of Edmonton.

I mean, ranked fourth, fifth in the world, however you judge it based on various different rankings, but in reinforcement learning, that is, that is really something to be proud of. And I think it's something that it's also something to rally around because how many other cities in the world would. You know, give their eye teeth to be in that position, have that sort of notoriety and that sort of ranking.

The opportunity set to develop a robust startup ecosystem around that knowledge base I think is, is a trend.

Kelly Kennedy: And your time to like, you know, you, you mentioned that the timing might've been a little poor with your, with your business venture, but your timing for coming into Alberta Innovate, Innovates was absolutely on point.

Like you've been there now six years. And so you've seen, you've seen a lot. You know, tell me a little bit about what that was like. Obviously being at the forefront, seeing AI, you know, maybe for the first time in some cases, like let's get real. Like we only as like consumers of AI only really started using it.

I would say over the last year, I say 2023 was the year of AI where people were like, Oh yeah, that's useful. We can actually use that, but you've seen it. From the very beginning, you know, tell me a little bit about what your experience has been like being able to see technology ahead of when it becomes commercially viable.

Douglas Holt: Yeah, I mean, what we're doing in the at the post secondaries is always very interesting. They're on the they really are leading edge in terms of the. The research that's being done there and how that's being incorporated into broader models. Google just released their, their touting is their, their chat GPT killer.

And what they've done is they've taken a large language model similar to and trained it, but they've incorporated, incorporated reinforcement learning into that. And that's why it's got, it's become so much more powerful and so much stronger than than it's, but the predecessors. So it's, it's, it's.

Those sorts of competencies that are really leading global change that we're not even aware of or talking about, but moreover, in my journey with with innovates and then watching the I'll talk about from the business perspective watching the change in the applications that we've seen come into the programs, it has been phenomenal.

I mean, when I started a lot of the the applications that were coming in the. From a, from a market opportunity standpoint, it was very regional in nature. You know, this is going to serve the, the medicine hat community, or this is going to serve the, you know, at best Alberta, I mean, rarely were we seeing things that were targeted in that scale.

And so a lot of what we've been seeing as a, as a shift is a shift in a mindset from that traditionally very Alberta centric. Type of business model that's coming out of this region, because up until recently, 80 percent of what we produced in Alberta was consumed in Alberta with the exception of resources into that of a global platform, looking at the global market, how are we going to compete on the global platform or in the global market?

And how are we going to fight for market share? And this is why we have the ability to become globally known, you know, and. You know, there's, you know, the neo financials and jobbers and, and others that are, that are popping up all over. And they're, we're seeing more and more potential unicorns that are I think just companies that are on the cusp of becoming that.

And so it's a real shift in the mindset. Of the Alberta entrepreneurs and that's been really

Kelly Kennedy: encouraging to see.

Have you noticed that

primarily that's due to the shift to tech being more of a worldwide consumer? Is that, is that why? Or is it, is it, is it specifically with, due to a change of industry?

Douglas Holt: Well, it's both. On one hand, if you're just in oil and gas and your whole industry is predicated on pulling something out of the ground cheaper and faster than the person next to you, putting on a pipe to a customer at the other end that has an insatiable demand, you never had to learn how to fight for market share.

You never had to compete in that space. The price was set. Similarly, up until recently, if you were in agriculture, you took your product, you gave it to the Canadian wheat board at a fixed price, and they sold it. Okay, so industry plays a role for sure. When you start diversifying out of that, and you're into a very dynamic industry, a marketplace where prices fluctuate, and you're competing on price, you have to understand your pricing model better, all those things.

It definitely, it's, it's a big piece of it then on the technology side. Absolutely. If you're a software based SAS model, you know, that is your, your, your audience is no longer regional. It is global in nature, in many respects, even if you're in a niche, you know, even if you provided, you're providing us a SAS.

product to the oil and gas industry. There's nothing to say that you can't be working and delivering to customers in Houston in Norway, in the North Sea and, you know, in other places. Like there really, it really has changed a lot of things.

Kelly Kennedy: What does this mean for Alberta? Obviously before with it all being regional still benefited us, but you know, what does a worldwide consumership mean for our province?

Douglas Holt: You know, we talked a little bit about this before. I think largely it, it goes to one, a more resilient economy as a whole. So there's, there's that piece two, I think it's a, an opportunity for, we'll see a shift in the way we, we've always touted ourselves as entrepreneurs and we are absolutely on a per capita basis.

There's more entrepreneurs in this province than there aren't any other province in the country. But this will be a really robust. And diverse group of entrepreneurs that are delivering in a bunch of different areas. And I think we're going to start to see wins. We're going to start to see companies that grow, get big, get bought.

And then we're going to see out of that, all of those people that worked inside those companies, they'll get the win. They'll because they'll be shareholders and then they will go spin out and start their own companies and it'll sort of feed itself and we'll get that momentum that's growing. So, you know, gratify is an example of a company that just sold.

And so I think we'll see more exits like that and more spin out opportunities. And the trick, of course, is to keep these entrepreneurs in the province and keep them starting up new, new businesses and not doing the old the old oil and gas trick where I get an exit and I moved to Kelowna and I retire.

So that's, you know, that's what we got to avoid. But if we can get these people. Feeding back into the ecosystem. That I think that's a great opportunity.

Kelly Kennedy: Absolutely. And I think that there's been, there's been a, there's been a resistance, you know, especially here in Alberta. Right. I think, I think it's, it's come because we have been so oil and gas based.

Our parents worked in oil and gas. Their parents worked in oil and gas is it's literally part of our blood as Albertans. Right. And so I feel like there has been a reluctance to, to You know, look at other things, but I do think you're right. I think now's the time we're there and it doesn't have to be the end of oil and gas.

And I really want the world to understand this. I think there's this idea that if Alberta starts to focus on other things on tech, on, you know, healthcare, on all these other things that, oh, well, it's going to hurt the oil and gas industry. Why does it have to, I don't understand. There's this like. There's there seems to be this idea that if we invest in things that isn't oil and gas, we are hurting ourselves, but the opposite is true.

There doesn't have to be one or the other. There can be both.

Douglas Holt: Absolutely. I mean, oil and gas is not going anywhere. We have the third largest reserves in the world. The Western Canadian Sedimentary Basin is a very strong gas basin. There's a big blue hydrogen opportunity in here as well. I don't think that we're going anywhere with what we're doing in oil and gas.

And the world is not shifting away from it anytime soon either, in my humble opinion. The grid can't handle it. There's a number. Constraints that I think we can sort of say with confidence that oil and gas is going to be around for a while.

We should also be grateful as Albertans that we have such a strong core industry and it will remain the core industry for quite some time as well. But why would we put all of our eggs in one basket? Why would we continue to say, well, We're gonna continue to be in this boom and bust cycle, which we've historically always stayed in.

If we have the opportunity to break that, yeah. Why wouldn't we? I mean, so it's, it's just logical from a business standpoint. If you're running the business called Alberta, that you would wanna have more diverse revenue streams, you'd be more resilient to downturns that you'd be, have a wider tax base, you'd have more opportunity for revenue growth.

And a lot of these tech businesses that are spurring up are going to make our oil and gas companies more efficient. They're targeting oil and gas companies to make them more efficient, to ultimately decrease what it costs to produce a barrel of oil. And because you don't control the price on the other end of the trade.

So why wouldn't we want to be doing that? So there's lots of reasons why I think that we should be celebrating both sides and, and not ever saying one is better than the other, or we shouldn't be doing one,

Kelly Kennedy: we should be Yeah, and you know, recently we had Dan Balaban on the show from Greengate Power, and we were talking about the same thing.

It was like Oh, yeah, the reality is there's room for both the clean energy is never going to completely replace oil and gas, at least on some level, right? There's there's no reason that we can't have both. And I think it's silly. It's silly to put all of our eggs in one basket only and say, okay, well, that's just it forever.

Like we know that that that doesn't work long term. And you're absolutely right. We are fortunate in Alberta to have so much opportunity. It's like we have clean power. We have oil and gas. We have tech. Why not celebrate it all? Agreed. You know, one of the things that I really wanted to talk to you about Doug, obviously, you know, we've been chatting about just our lovely province and, and tech and everything, but I really wanted to get into Alberta innovates with you.

I think that there's a bit of a lack of understanding about how the whole ecosystem works. And I think we'll get into that, but can you just delve a little bit into the history, you know, in my digging and learning and researching for the show, what I learned was Alberta innovates is over a hundred years old.

Douglas Holt: Yeah, unbelievable, right? In one form or another. We are over 100 years old. And the the, the latest iteration Alberta innovates has really only been around since 2016, where a number of different, organizations were amalgamated in the province to create Alberta Innovates but the research council has been around for a long time in this province.

So a spirit of innovation in Alberta is not something that's new. It's something that the government has been a proponent of for. A heck of a long time. What we're what we've done most recently is, I think, allowed our province to leapfrog ahead of some of the others by consolidating these entities. And so now we are in a place where, in its current form, innovates is, you know.

Over just about 600 employees we've got nearly, you know, nearly 100 PhDs that work in the organization where you have 11 locations across the province, a million plus square feet of lab space 600 acres of research farmland two subsidiaries that in Innotech, Alberta and C for technologies, both engineering firms that test and validate heavy equipment And an annual operating budget of about 250 million.

So we do a lot of different things in the process.

Kelly Kennedy: That's crazy. That is crazy. Why do you think there's Okay. I'm going to ask you the crippling question here. What is it? What is Alberta Innovates?

Douglas Holt: We describe ourselves as the province's research and innovation engine. We're here to promote the development of technology, the, the, the use of technology in new ways and the adoption thereof.

And so we're trying to create an environment, whether it's in clean resources or in health. Or in my space in the entrepreneurial ecosystem, wherein we create that space for entrepreneurs to grow and thrive, try new projects. And so we, we have funding supports for that to to allow for them. And that can be large industry in some cases, and right down to the, the SMEs.

We span the continuum of early stage research. Right through to large industry projects. So on an, on an ecosystem basis, we touch all aspects of the ecosystem and are able to have a purview. That's lets us see where there's needs and where there's gaps gives us the opportunity to fill those gaps or convene the people who can in a fashion that other.

Agencies simply aren't, you know, I invited the, I guess you would call them our sister organization in, in Saskatchewan and in British Columbia to a meeting and it was a great meeting. I really enjoyed meeting with both agencies, both of their agencies would fit inside my team alone in terms of staff and, and, and what they're doing.

So they're like, from a scope and size There's nobody that comes close to in the country to innovate because of this consolidated path that we've chosen.

Kelly Kennedy: Wow, man, that makes me proud to be Albertan. I sure love our province.

Douglas Holt: Yeah, me too. I mean, right now I think we have about 1. 3 billion. In in projects under management.

That's, you know, 1, 200 active projects.

Kelly Kennedy: Wow, you know, and it just makes you like, it makes you just realize, like, these are projects of the future. These are, these are game changing projects. And, and you know what I mean, it's going to shift the world. And it's just, it's wild. It's wild to think that all this is just happening in our backyard.

And that we have organizations like you guys to help us out. Do you mind just spending a little bit of time telling us about what you do as the Associate VP of Investments?

Douglas Holt: Sure. Yeah. Happy to. So my portfolio is called the investments portfolio and it has three main areas. One, the first area is called post secondary investments and emerging technologies.

So any investments or anything that research wise we're doing with emerging technologies that comes out of that portfolio Amy, for example the Artificial Machine Learning Institute sits under that portfolio as well as, you know, what we're doing around cyber security, what we're doing with quantum, what we're doing with ARBR down in in Lethbridge, advanced manufacturing, all of those things would sit under that portfolio.

Then inside that portfolio, also, we have a suite of programs designed to support researchers if they're advancing a project that is In line with that, or to support graduate student scholarships so that we can increase the number of highly qualified personnel on the province in these spaces.

So we're not, we're not funding graduates to go and research. Sea ice thickness in the Arctic because that's not going to translate into benefit for Alberta. But we are interested in things that are going to be relevant to Alberta and make sure that they're going to have.

Kelly Kennedy: Okay. So, so everything that that Alberta innovates would invest in, it has to have a return for Alberta.

Is that a fair statement?

Douglas Holt: Totally, totally. So in my, in the entrepreneurial investments line of business. For every dollar we put into the ecosystem, we get over 33 back in fallout on investment. And for every dollar we put into the ecosystem, we get over 9 in revenue growth by the companies that we invest in.

It is a highly successful. Program and we have a suite of programs that are intentionally designed to work with entrepreneurs and founders to help them along their journey towards success such and they're designed in such a way that they fit certain points in that client's journey. So, if you're early stage and you're just trying to get traction, we have some programs for that.

If you're a little later on, maybe you've got a, you know, what we need some dough to build this product and get to where we need to go. We have, we have funds for that. Maybe you've got a big fish on the hook and you know, they're saying, listen, if you can do a demonstration with us, you know, we'll sign up and buy 10 of these things.

Well, then we have a program for that. And so there's all kinds of things where maybe, you know, you need to hire a business development person. And you do need some help subsidizing that salary or a CFO or what have you, a marketing lead, then we have programs for that too. There's all kinds of different opportunities.

And as you said, you know, the impact is what drives everything we do. We're looking for anything we're doing in the ecosystem is getting the return on investment. Does he deserve? Are we, are we meeting our fiduciary responsibility?

Kelly Kennedy: That is an amazing ROI. Congratulations. That's crazy. Those are huge numbers.

I can't actually believe that a little bit. Thank you. Yeah, that's very impressive. How were you able to, you know, obviously that takes a very smart internal team to be able to vet a company, to be able to decide, yeah, we can provide that level. What does that process look like for a company that you guys are evaluating?

Douglas Holt: Yeah, it's so I have a really talented team, frontline team that are called our technology development advisors, and there's 10 of them across the province. And our whole premise here is that we're not just trying to provide funding support. It is coaching community and capital. So these are, these are experts in their own right that are working with companies and coaching them along in terms of what maybe they need to be doing, how they can tweak and, and gain greater traction in what their existing efforts are.

Certainly they act as stewards, then to connect them into the community. Maybe there's some strategic partners that they know. Potential customers or into perhaps, you know, the regional innovation network, and we can talk about that later. They the community piece is a big part of what we do, and the capital side of it is the last piece of it.

And then not that it's not important. It's very much so, but. We're much more than just a granting agency in that capacity. These, these TDAs work closely with clients and they help them achieve great results. So there, that revenue growth, that follow on investment, those metrics are doing parts of the great work that those, those technology development advisors do with our clients.

Then on the capital side of it we go through, I call our process best in class coming out of investment management I, I can speak to that with some degree of authority and the work that we do is, is rigorous on companies. We track a number of different data points, making sure that. Anything, any investment we're making in a company is one that we feel on a risk adjusted basis has a good, good chance of being a positive outcome.

We're not the same as private equity. We're not the same as a VC. We don't, we have a higher risk tolerance because we are trying to de risk these propositions such that private equity and angels and the like can come in. So we are creating that environment for follow on investments. To be more likely as well but that does not negate the fact that we go through a very it's, it's a fairly intensive process to make sure that any company we're funding is a company that's, you know, one Alberta based and and that they have they, they meet our Alberta misquotient but also they've got a business that is going to be scalable, that is going to be has a potential to grow.

Provide great return for the province and create jobs as well as revenue.

Kelly Kennedy: Okay, no, that's awesome. That really explains it. So what you're really trying to do is just give these organizations the little boost they need to get to that next stage where they can get some extra investment. How many, you know, obviously 250 million is a lot of money to invest in organizations over a year.

How many organizations do you guys typically work with over, over a year's time?

Douglas Holt: Well, not all of that is in my budget. Let me be clear that the lion's share of that is not. But you know, we'll, we'll invest in I think at present we have about 1, 500 active clients in our, in our projects. So there, there's, there's quite a few that we have on the go at one time.

Kelly Kennedy: That is a lot of companies to be keeping up with. Wow. How big did you say? How, how many?

Douglas Holt: Yeah, it's an intensive process. 589.

Kelly Kennedy: Yeah, that's a lot. That's a lot of work on you guys part.

Douglas Holt: Yeah, and that's again, that's just my projects. So there's, there's a bit, it's a big company with a lot of impact in the province.

The, our digital health team is, you know, similarly doing some great work in the space trying to, Improve patient outcomes for for Albertans, you know, and healthcare is I think it's the biggest line item in our budget. So trying to manage that by way of digital solutions and reducing the burden on taxpayers to create more effective solutions for, for Albertans in terms of patient outcomes, interoperability between the technology and the data figuring out how patients can get access to data and really just sort of starting to modernize that is a big piece of it. And the clean resources team equally some incredible outcomes over there.

A lot of the investment these days is going into clean tech. It's a big space. And ironically, you know, what came out of the oil sands being tarred and feather, but in the international media for so long is that we've really buttoned up and become. Almost these clean tech experts and that, that, that there's a clean tech expertise that's emerging in this province that wasn't here before.

And it's, we're seeing a number of opportunities that are growing out of that space that are really, really excited.

Kelly Kennedy: Yeah, no, and we can definitely, if you wanted to, we can definitely speak to some of that. One of the things that I wanted to really chat with you about here was obviously when people think of Alberta Innovates, I think most people are thinking, oh, grant funding.

And when we were talking, it's like, no, there's so much more than that. There's so many services that are offered and all sorts of other things. So can we chat about maybe some of the services that Alberta innovates can provide over and above the grant funding more specifically to, to anybody who's looking for some help?

Douglas Holt: Sure. I mean, let's talk about it from the perspective of an entrepreneur trying to find your way through this ecosystem is challenging. Knowing what supports exist, where should I go to? Should I go to Edmonton Unlimited? Should I go to the ERIN? Should I? Where do I start? What do I do? We've. We've put together a wayfinder report, which is, which is on our website.

And that's, that's a place to start certainly. But I would encourage you to reach out to Albert Innovates and connect with us. And you'll be ingested into our system. And then we'll connect you with the TDA, those individuals that I was talking about before. And they really can help guide and, and, and move entrepreneurs through the ecosystem.

Now we're not, we're not for every business. That's that I should, you know, throw that out as a caveat. All entrepreneurs are. Equally valuable in the province, but our mandate is around technology. So if it's a, if it's a pizza joint I can't help. But if it's, if it's a tech company, then certainly that would be a place for us to go if you're not in the Edmonton region, for example and you're looking to connect, we have what's called the regional innovation network.

And the, the Alberta innovation network or the regional innovation network is. Eight separate regions in the province that Alberta animates funds, and the idea here was These regions know what's best for them. For us to sit here and say, you know, thou shalt focus on this, and you on this, and this, that's not going to be accurate.

We want them on the ground level. We want them out talking to the people, finding the opportunities, and figuring out where to go and what they should be doing. And that is, you know, whether you're in Lloydminster or if you're in Medicine Hat, or if you're in Fort Mac, or GP, or Edmonton, or Calgary, Lethbridge, that we have these RINs available, and these supports are there.

So look into those, and those would be another way to get connected into the ecosystem. These groups can help you access provincial dollars. They can also guide you towards federal dollars, federal programs that could be relevant. All of them that I've mentioned here they provide that coaching service as well.

And that's, and so it's a wayfinding and coaching piece that they can support you with in, in connecting you in to where you, where you want to go and how you want to.

Kelly Kennedy: Yeah, and you know, we talked about this before the show, and I've talked about this on other shows where. I think it can get a little bit confusing because, you know, I mean, when we see a lot of the stuff, it's even through Edmonton Unlimited or through Aaron.

It's always in partnership with Alberta Innovates, right? But like how it all ties together is kind of one of those things where it's like, why does all this need to exist the way it does? But basically what you're saying is because each region is operating differently and we give them the autonomy to make their best choices to help people the best way possible.

Douglas Holt: Totally like unlike any other way. You know, group, we view the province's ecosystem as something we're responsible for on a pan Albertan basis. And so we've got to stand up entities in the respective regions that share that vision and, and can be on the ground level boots on the ground and working with entrepreneurs to, to build that.

And so that's where, you know, we have those, those types of supports. And we also have an ecosystem development program wherein we target certain initiatives in the province that could be led by industry associations or other that we, that we feel are going to build a competency in a certain space.

You know, it could, it could be IOT, it could be AR, VR, things like that, where, or blockchain where we think that there is opportunity to have. Industry led initiatives with industry pull to garner interest and garner some traction in the province for entrepreneurs and in that space. So we, we try and pull a number of different levers to make sure that we're we're, we're touching all aspects of it.

People don't often know how many, how much we're behind the scenes on, but it's. I'm not going to say all of it, but it's a lot of it.

Kelly Kennedy: That was going to be my question. It's like, how much of this stuff, like going on through ERIN or through Edmonton Unlimited is Alberta Innovates initiative?

Douglas Holt: Yeah, and it's, it gets tricky when we say initiative because we want to give these, these regional innovation networks, autonomy to pursue the areas they feel are valuable. But certainly the mandate comes from us in terms of where, what you're trying to accomplish and what you're trying to do and how they do that specifically is, is on their, their terms.

But you know, the broad and impetus for all of this came from innovates.

Kelly Kennedy: Yeah. And, and Alberta innovates is government funded, correct? Like it's a government corporation.

Douglas Holt: Yeah. It's a crown corporation. Yeah. Sole shareholder.

Kelly Kennedy: Okay. And you had mentioned, obviously, federal and provincial dollars. Is Alberta Innovates all provincial dollars?

Douglas Holt: Innovates is provincial dollars. We're funded by the government. We also generate some revenue and the the subsidiaries definitely generate their own revenue. The. The federal piece of it is we collaborate with federal government on a number of grants and initiatives, so we will co fund things like, for example the third pillar, which I didn't get to in my portfolio is the scale up and growth accelerator program.

And that was the function of a 2 year study in which we looked at the ecosystem and said, okay, you know, what we've learned is that we're great at getting companies from 8 to 10 employees. But we tend to plateau there and we don't have these companies that grow and become wildly successful unicorns and become our great, our job creators and our big revenue generators and the big stories, you know, the Shopifys of the world, et cetera.

So what, how are we gonna mitigate that? How are, how are we gonna change that rather? And we looked at it and we said, well, I mean, we could, we could follow the path of Ontario and, and British Columbia and, and, and Quebec to some degree, or we could try and accelerate. And so what we did was we issued an RFP to bring in the top global accelerators in the world.

And we had 60 some odd accelerators apply, we chose five of them with very different business models to address different areas in the funnel, if you will of a client's journey. And we've, we've brought them to task and brought them to Alberta to, to help grow our entrepreneurial ecosystem, to grow the scale ups in the province.

And that's been tremendously, tremendously successful. We, we announced in July that I think in a year and a half on a 35 million investment that involved the federal government, the municipalities of Calgary and Edmonton and the province, they're, they, they've raised 147 million dollars in, in follow on capital.

And that was back in July and that number has gone well north of that. We haven't announced because we're still tabulating, but. It really has been a great success. And so that's an example of where we collaborate with the feds and work with them. And we have a great working relationship.

Kelly Kennedy: Awesome, awesome. Yeah. And thanks for clarifying that.

Like I said, I think it's just, it's information that most people don't really understand or know. Right. So it does make sense to try to figure out how, how does it all work? Right. You know, we talked about strategic initiatives and these are the things obviously that Alberta innovates is most keen on that they want to fund and they want to grow because they see that as being the best.

Use case for the money. What are the current strategic initiatives for Alberta innovates?

Douglas Holt: In Innovates, we've got five key areas that we focus on, and that is the entrepreneurial ecosystem which falls under my purview artificial intelligence, which to a large degree falls under my purview with emerging technology piece, but also obviously extends into the other areas, digital health.

And I talked briefly about them as well as clean resource technologies and smart agriculture. So we, we, those would be the five areas that we tend to focus on. And yeah, we think that those are critical pieces of the puzzle for our success.

Kelly Kennedy: Yeah, and so it's obviously very much geared towards what are our strengths as Albertans, right?

That's what it's focused on, right?

Douglas Holt: Well, yeah, they are. Absolutely. And they've got, you know, they've got good business cases behind them too. Like when we talk about clean resources technologies, for example, we're, we're not talking about the phasing out of oil and gas, and that's not the focus of it, but it's, it's the, how can we take what we're doing, make it cleaner.

More efficient you know, through, through carbon capture technologies, or maybe what can we take that we're currently producing and transition it into something new? And so we have a program that's called bitumen beyond combustion and the bitumen or BBC. So I don't have to keep saying that over and over again.

Really what that's talking about is taking what we're producing in the bitumen and pulling out pieces of it. By way of fractionation to create carbon fiber, and we're showing that we can create carbon fiber at market competitive rates right now in such a way that this could be a multi billion dollar opportunity for Alberta going forward.

So, in no way are we saying, you know, let's. Let's shut it down. And then these turn these well pairs off. No, no, no. It's how do we take what we're doing? Make it cleaner, make it better and use the products in maybe a different way than we're thinking about using them today. And so it doesn't have to be associated with DH3s necessarily.

So that's a really cool example of innovation that's going on in the digital health. You know, we talked about that with everything that's going on with. How, what a big line item healthcare is in our provincial budget and making that more affordable. Alberta is the only province that has just one healthcare provider.

So that means one place holds all the data. In other provinces it's fractionated, in other states it's fractionated or fractionalized all over. So that, that's a really unique data opportunity that we're exploring and I'm not sure where that goes, but that's a neat one for us to be thinking about.

And what that could mean for Albertans as a whole smart ag. I mean, food security is one of the biggest issues facing the world today. And the price of food is mad. And you go to the grocery store, it's just unbelievable. Furthermore, family farms are, they're dying in Canada and they're dying because they're not, they're not profitable.

And we're seeing larger groups come in and take them over. And that's. That's something we can work to start to prevent by way of using technology to enhance profitability and to, once we enhance profitability, we can control food costs. Things like that and make sure that we're mapping a world where we better, we can better understand droughts, we can better understand a soil quality and things like that to make sure that yields are as high as they possibly can be to feed Canadians and make sure that we're keeping the quality of life that we're used to.

Artificial intelligence, you know, that's, we've talked about that being fourth in the world. In reinforcement learning, clearly a massive opportunity and as we were talking about before 3rd generation Albert entrepreneurs, it's in our blood. It's what we are. So we think that those are great areas of focus for us that are really driving Alberta's.

Sort of success.

Kelly Kennedy: Yes. Yes. No, 100%. And, you know, appreciate you guys appreciate what you're doing. You know, I mean, all of this is for the good of us. And I absolutely love that. It's not, it's all about helping. It's all about making a better future for our children, for our grandchildren and for the future of Alberta.

And yeah, I'm thankful to have Alberta Innovates in our corner doing this hard work, this heavy lifting to to help our entrepreneurs out, you know, people. Obviously, we're coming up to the end of our show. I really appreciate it. This has been an amazing show. I think we've taught people a lot about what Alberta innovates is all about and the great work that you guys are doing.

You know, you're speaking to a lot of entrepreneurs right now, Doug, right at right at New Year's. They have some great resolutions just on the tip of their tongues. What piece of advice might you give them for 2024 to just make sure that they're the most successful they can be?

Douglas Holt: I think going into 2024, we're, we're still in a a capital market situation where capital markets are constrained.

And I think that's just a reality. So it would be in 2021, we would, there was a lot of A lot of talk about growth at any cost and investment was coming in and it was just put the money to work, low interest rates, go after it, do what you need to do. Well, that's not the case anymore. Cost of capital has gone up considerably for capital providers and for entrepreneurs.

So, right now it's about managing costs. It's about. Pursuing smart growth cost efficient growth, profitable growth, only profitable growth, and and, and looking for those opportunities to align with capital that aligns with your priorities to, to make sure that they're going to be helpful in their cap, in your cap structure, and they're going to be.

Ones that you want there in the long term some patient capital was probably.

Kelly Kennedy: Yeah. Agreed. Agreed. You got to stay profitable or it just doesn't work out. Amazing. This has been episode 102 of the Business Development Podcast. We've had Doug Holt, Associate VP of Investments with Alberta Innovates.

Thank you so much for this one on one Doug. This educational episode is going to help a lot of people. And until next time we'll catch you on. The flip side.

Outro: This has been the business development podcast with Kelly Kennedy. Kelly has 15 years in sales and business development experience within the Alberta oil and gas industry and founded his own business development firm in 2020.

His passion and his specialization. Is in customer relationship generation and business development. The show is brought to you by Capital Business Development, your Business Development Specialists. For

more, we invite you to the website @ www.capitalbd.ca. See you next time on the Business Development Podcast.