Ready for Launch

Launchit Ventures is going public – and thinks others should, too.

Probably not.”

But those are the people, Harsevoort notes, that may have the best insight into what life sciences workers actually need or would value. “And so we’ll partner with those people,” Harsevoort says. “We’ll do an equity or royalty arrangement. We take the risk of building and bringing the tech to market.”

“We’re the company you go to if you want to keep your day job,” Harsevoort laughs.

Growing Pains

Launchit Ventures finds itself in this strange middle-ground, though, of being simultaneously too-big and too-small. “We started off a little bit with private investment, but it was more friends and family style investors,” explains the CEO. “But we quickly realized we needed to figure out what our long-term funding model is.” 

Typically, a company like Launchit Ventures would make arrangements with investment bankers, developing an investment fund and attracting funding that way. That process doesn’t quite work for venture studios though, Harsevoort says: “If you go down the traditional fund route, you usually have a time horizon of ten years. And that’s really hard to get a group of ventures that are all going to kind of wrap up at the same point in time.”

Plus, investment in the life sciences sector “cratered” back in 2021. There just simply wasn’t money to go around.

Fortunately, there were other options.

The Venture Exchange

It also attracts a different type of investor. In a world where the fate of your publicly-traded company rests on your last-quarter performance, the TSX Venture Exchange is more “forward-thinking.” “You don’t have to immediately deliver profit,” Harsevoort points out. “The investors there are more in it for the long haul.”

They’re also not getting control over Launchit — the company’s offerings are being set up in a way so as to not dilute their current board. “So, they’ll be passive investors,” Harsevoort says. 

That is to say, they’re not going to flee after a bad quarter, scuppering your business before your developed ventures make it to market. And if they do flee, they won’t be taking the business down with them.

Oh Canada!

Harsevoort explains that most companies that use the TSX Venture Exchange are resource-driven, early-phase oil-and-gas companies, but he sees the Venture Exchange as important to the future of Canada’s life sciences sector. 

“Frankly, I think we do a terrible job of commercialization in Canada,” he says. “We do great, great research. But then what happens is it doesn’t get commercialized, and then you’re at a conference in Boston two years later and you see someone there is running with it and trying to make it a success.”

The TSX Venture Exchange, therefore, offers a unique opportunity for companies like Launchit. “How do we actually get these things to be successful in Canada?” Harsevoort asks.  “I think that going down these routes of becoming public companies, and using things like the venture exchange, provides a ton of value for both the businesses and to the Canadian investment ecosystem as well.”

“I want to do right by them.”

And in case you were still unconvinced, Harsevoort has a moral reason for wanting to take Launchit Ventures public. “I want to do right by our early investors,” he says. “It can be hard to sell parts of a private company. Being on an exchange makes it much simpler.” He also points to the opportunity to offer employees stock options as another plus.

And Harsevoort sees the process of going public as being better at business. “You’ll hear some cons about getting listed on an exchange, like about all the additional audits and documentation,” he says. “But we should want to do that anyway! That makes us a better, more-trusted company!”