A Lasting First Impression
Victoria Xu fondly remembers the first investment she made as an angel investor—it was in a brilliant biotech company cofounded by Ella Korets-Smith. We asked the women to share their journeys both securing and providing investment, and the successes that have followed.
Honouring International Women’s Month, Ottawa’s Capital Angel Network and the National Angel Capital Organization are proud to feature a series of stories celebrating the women who mobilize angel investment for Canada’s bold women entrepreneurs.
By Lisa van de Geyn
During International Women’s Month 2024, Ottawa’s Capital Angel Network and the National Angel Capital Organization featured a series of stories celebrating the women who mobilize angel investment for Canada’s bold women entrepreneurs.
Victoria Xu is a born problem solver. Give her a challenge and she’ll get to work, looking for practical solutions to achieve success. It’s a mindset that’s served her well in her career, and it’s also an approach that’s led her to playing a key role in Ontario’s innovation ecosystem. “I’m drawn to uncertainty. If something has a clear answer and a clear playbook, it tends to get boring after a while. I like being challenged and I like the unknown,” she says. “Those are two of the reasons I became an angel investor.”
Xu joined Ottawa’s Capital Angel Network (CAN) in 2020, her training in biomedical engineering, a decade of experience at an industry-leading telecom corporation and knowledge of public management in tow. She joined the group with a strong desire to contribute to the early-stage tech ecosystem. “Startups are fundamental for the advancement of society, and we need tech startups right now. I saw angel investing as a great opportunity for so many reasons: It’s strategic, there’s a lot to learn, there’s potential for huge reward, it’s never boring, and I felt I could make a difference bringing in my experience.” She immersed herself in the space, and before writing a cheque, she did her own form of due diligence—she got to know companies coming out of local incubators and accelerators, she volunteered with SheBoot (an investment-readiness program that aims to prepare women founders to pitch their innovations and secure funding; it was jointly established by CAN and Invest Ottawa and today is a standalone entity), and absorbed all she could from her fellow angels. “I wanted to get to know the ecosystem, who the entrepreneurs were and the challenges they faced. After I did that, I felt comfortable to make my first investment,” she says.
Virica Biotech is the medical sciences startup that first caught Xu’s attention. The Ottawa-based startup uses biotechnology to boost the production of viruses for the benefit of disease-fighting gene therapies, and their goal is to make cell therapies and viral medicines easier and less expensive to produce so more patients can access the treatments they need. Founded in 2018 by Ella Korets-Smith (a scientist, business development expert and now the company’s chief strategy officer), Ken Newport (a serial life-sciences entrepreneur and the executive chairman) and Dr. Jean-Simon Diallo (originator of the Virica technology, CEO and scientific founder), Virica is based on more than a decade of research conducted at the Ottawa Hospital Research Institute, where Dr. Diallo studies immunotherapy that uses viruses to kill cancer cells. During this research, he developed small molecules (called viral sensitizers) to enhance the efficiency of these therapies, and identified ways viral sensitizers could benefit gene therapies. With Virica, patients with rare hereditary diseases—sickle cell disease and Duchenne muscular dystrophy, for example—would be able to access treatments that haven’t been easy to get because of the huge demand and significant cost.
Prior to the pandemic, Korets-Smith’s cofounders started pitching Virica Biotech to potential investors and were invited to present to Xu and CAN’s angels. “We started the company in an academic lab, and we had to actually make molecules, do validation studies and set up a supply chain so we could ship to customers who were interested in trying them,” Korets-Smith says. “Back then it was just the three cofounders working on this. We had to have initial funding to start meeting clients’ requests—we needed money to get it off the ground.” Xu says Virica’s pitch stuck with her—not only was she impressed with the founders, but with her background in biomedical engineering, she immediately saw global potential. “I joined the deep dive and within about a month I committed to investing. We had quite a few investors from CAN on this deal. Some members didn’t want to invest but offered to share their concerns, and that was helpful, too. That’s an advantage of being in a group—you can tap into group intelligence and feel supported.”
Korets-Smith says angels like Xu were critical at this stage. “It was still very much an idea with data and a strong hypothesis behind it, as well as customer interest. Our angel funding got us to the point where we could have validation for the technology, because without those early clients, we couldn’t have been able to go after our series A,” she says, adding Virica will soon be closing their series B. And while they’ve received investment from angels, there have been other advantages. “We got introductions to several other angels, who then introduced us to their friends and colleagues. We also have a few angels from our industry, and we were able to have many conversations about our business model. It gave us confidence, comfort and allowed us to keep the momentum going.” Xu says she made a point to reach out to the cofounders, asking if she could assist in an area she excels in. “I offered to work on some grants for them—grants are a lot of work, and I knew this was a way I could help,” she says.
As a female founder, Korets-Smith says she values women investors like Xu—she says it’s vital for angels to have belief and trust in a startup’s management team, and the more women angels there are, the more female founders feel like they belong and can access capital. “There are so many fewer female angels and fewer female founders and it’s important to find each other, connect and build relationships.” Xu is one of a small handful of Virica’s female investors, and it’s not lost on her that her first-ever deal with CAN was in a company with a female cofounder. Still, she says more women angel investors can only benefit entrepreneurs. “Women have misconceptions about angel investing—they think it’s daunting, and they think they have to be a billionaire to participate. My advice to women is as long as you’re qualified, you should come out to angel group meetings and learn what it’s all about—investing in startups is a portfolio we shouldn’t ignore. You’re investing in people when you’re an angel investor,” she says. “It can be complicated, but it’s really rewarding when you have all the moving parts and you’re trying to figure things out. Groups like CAN do the heavy lifting for you, and there’s good deal flow, so even if you don’t come from a tech background, there will be companies that fit your passion and interest.” Xu has done 10 deals since joining CAN (most are technology-enabled software) and is ardent about the need for women with a variety of experiences to get involved. “I can judge startups on the tech side, but if a retail tech company comes in, for example, I don’t know much about the retail industry. Having likeminded people in the room allows you to communicate and ultimately make better judgements on deals.”
Virica now has 30 on their team and they’re expanding their labs in Ottawa. They also have dozens of customers, and they’re expecting clients to take their viral sensitizers through regulatory agencies and into clinics later this year. “Virica has been a big success in my portfolio,” says Xu. “Some deals work out and some go bust. It’s inevitable. But Virica has been a great case for me to learn in terms of how angels evaluate a startup and the decision-making process that happens in a group. It’s been a great learning experience in every way, and I’m looking forward to seeing what they do next.”