Not all venture capitalists sit on a golden throne on top of 50-floor buildings somewhere in the Silicone Valley or on Wall Street. Larry Lau is the owner and founder of Eighty8 Ventures, a venture studio based in London, Ontario — a city known for its university and snowy winters. Yet Lau was able to carve space in his hometown to not only grow businesses from all around Canada, but also to co-found the largest e-commerce agency in the country, Northern Commerce.
Eighty8 Ventures works with everyone from startups to medium-sized companies to help transform their ideas into reality. Instead of providing businesses with capital, the studio invests by providing the software development resources required to help products take flight.
“For those who have a great idea but don’t have a technical background, they can get $200,000 of funding but still have to figure out how to build their product,” said Lau. “We bypass this whole process and work with entrepreneurs as their technical co-founders.”
By doing this, Eighty8 Ventures helps entrepreneurs mitigate a lot of risks. These businesses could look to family and friends for capital, but family and friends may not always be qualified to do more than provide money.
He started his first business, which later became Northern Commerce, working at a bank part-time. At this job, he familiarized himself with the business owners that came in. And soon, Lau was helping these businesses build websites for as little as $300-$500. Once, he was even paid in nutrition supplements.
Before this work, his only experience designing websites was from a pet project. Lau had once created a Pokemon fansite called Poketown, which at one point, was the fifth largest Pokemon website in the world.
As he continued to get more clients, Lau graduated from Western University and pursued his business full-time with a business partner. Living at home and being a recent university graduate made running his business significantly easier, as it alleviated a lot of the risks. He didn’t need to worry about a mortgage or about providing for a family and children.
The first major risk Lau and his partner took occurred six months after taking their business full-time. They decided to move into a commercial office. This office space was essential to meet clients and to establish their credibility as a company.
“Getting an office was scary,” recalls Lau. “Even though the lease was only $600-$700 a month, which is cheap compared to now, we only had $2,000 in our bank account and didn’t have any committed or upcoming work.”
But this risk pushed Lau to work harder. And soon, the small business hired their first employee. In their second year of operations, this grew to four or five employees. But despite the rapid growth of their team, the two founders barely paid themselves at all. In their third year, Lau and his business partner saw all the work they were putting in without much reward, so they made a decision: they had to pay themselves a reasonable amount or else they would pivot their business model.
Luckily, the hard work paid off. The business found the success it was looking for, brought in bigger and bigger clients, and picked up industry awards on its way. In 2015, a merger with a local software development company made them the largest eCommerce agency in Canada. But as Lau’s business grew to new heights, he decided to walk away to start Eighty8 Ventures.
“We built this big machine that had big clients but was a repetitive process,” he said. “It was no longer exciting to me. It was more exciting working with entrepreneurs.”
For Lau, investing and building companies is a passion. His biggest advice for small business owners is to not put all the responsibility on yourself and think “me, me, me”:
“People who think like this tend to have slow-growing businesses,” advised Lau. “You need to delegate responsibilities, trust others, and build a team to accelerate growth.”
As someone always listening to budding entrepreneurs pitching the next big thing, he emphasizes the need for business owners to tell a story: Why is your business trying to solve a certain issue? What is the exclusive opportunity? And why do you think you’re the appropriate person to solve this issue?
So what’s next for Eighty8 Ventures? One problem with investing in startups is that Lau’s studio isn’t always involved in the decision-making process. That’s why Eighty8 wants to build its own products to move quicker. The studio has started using technologies such as machine learning to build an automatic speech recognition project that transcribes audio. While transcription services already exist, Lau believes that Eighty8 Ventures can carve a niche by focusing on diarization and by creating a unique training model.