EUVC

EUVC | E385 | Inovia's Michael McGraw European LPs and why a higher risk appetite could pay for itself

Dec 4, 2024

Michael McGraw, Principal at Inovia Capital, shares his insights on the European venture capital landscape. He discusses how European LPs can benefit from a higher risk appetite, drawing lessons from Canadian investment strategies. The conversation delves into Inovia's selective approach to scaling Series B to pre-IPO companies across Europe and North America. Michael also highlights the challenges faced by European LPs and the importance of building relationships in the venture ecosystem. Notable success stories, including investments in companies like Lightspeed, illustrate the potential for innovation.

54:09

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Episode guests

Michael McGraw

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Quick takeaways

European LPs could significantly enhance their investment portfolios by adopting a higher risk appetite, mirroring the dynamic Canadian market.

The fragmented structure of European pension funds limits effective venture capital investments, contrasting sharply with Canada's centralized system.

Educating European LPs about the distinctions between venture capital and traditional private equity is crucial for fostering better investment strategies.

Deep dives

European LPs and Risk Appetite

A significant point discussed is the potential benefits for European Limited Partners (LPs) if they adopt a higher risk appetite. Drawing on his experience from working at a large Canadian pension fund and Inovia, Mike McGraw emphasizes that a willingness to embrace risk could lead to greater returns. He parallels the investment ecosystems in Canada and Europe, highlighting that Europe's relatively conservative investment approach might limit opportunities. By contrasting this with the more dynamic Canadian market, he suggests that European LPs could enhance their portfolios and contribute to local ecosystems by seeking out higher-risk, high-reward investment opportunities.

Intro

2min

Navigating Transatlantic Ventures and Success Stories

2min

Embracing Risk: Lessons from Canadian Ventures

6min

Navigating Venture Capital: Challenges and Strategies

11min

Building Relationships and Educating Limited Partners in Venture Capital

2min

Venture Capital Dynamics in Europe

21min

The Value of Headspace Over Time

2min

Fundraising Fundamentals for Venture Capitalists

7min

In this episode of the EUVC podcast, Andreas sits down with Michael McGraw, Principal at Inovia Capital, a €415M growth equity fund headquartered in Canada but making waves in Europe.

Inovia has €2.3B in assets under management and a track record of backing companies like Cohere, Lightspeed, Neo4j, and Wealthsimple. Mike brings a unique perspective shaped by his journey from LP at CDPQ—one of the world’s largest pension funds—to leading growth-stage investments at Inovia. Together, we’ll dive deep into the evolving role of European LPs, exploring why embracing a higher risk appetite could yield outsized returns and drive systemic innovation.

We’ll also discuss Inovia’s strategy for scaling Series B to pre-IPO companies across North America and Europe, shedding light on key challenges and opportunities in the software space. Whether you’re an LP curious about market dynamics or a founder navigating growth-stage fundraising, this episode is packed with insights you won’t want to miss.

Go to eu.vc to read the core take-aways.

Chapters:

01:00 Meet Michael McGraw from Inovia
01:59 Inovia's Strategy and Focus
02:23 Inovia's European Expansion
03:22 Success Stories and Notable Investments
04:05 The Role of CDPQ and Mike's Experience
04:55 Canadian vs. European VC Ecosystems
07:22 CDPQ's Investment Strategy
11:42 Challenges for European LPs
16:49 Fundraising in Europe: Insights and Observations
27:27 Firepower and Fund Allocation
28:05 Late Stage Market in Europe
28:28 Investment Strategies and Risk Appetite
29:49 Challenges in European Venture Growth Capital
31:45 Government's Role in Venture Capital
32:27 Canadian Venture Capital Action Plan
34:09 Fund of Funds in Europe
37:45 Mike McGrath's Background
41:41 Lessons Learned in Venture Capital
48:06 Fundraising Tips for VCs

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EUVC

EUVC | E385 | Inovia's Michael McGraw European LPs and why a higher risk appetite could pay for itself

Episode guests