Rhino Ventures, ‘the funders we wished we had as founders,’ launch $120M Fund III
Rhino Ventures, ‘the funders we wished we had as founders,’ launch $120M Fund III
Rhino partners Jay Rhind and David Hogarth reflect on six years, six exits and Thinkific’s IPO.
Vancouver VC firm Rhino Ventures operates with an ethos to “be the funders we wished we had as founders.” Today, founders can rejoice in learning that Rhino has announced a $120 million third fund, $20 million oversubscribed.
Founded in 2015 by Fraser Hall and Dan Eisenhardt, the now founder and CEO of FORM, the firm’s first fund was $14 million later that same year. Partner Jay Rhind joined in 2015. He was inspired by the “chip on our shoulder” nature of the firm and its place within the BC venture capital landscape—perhaps even shifting the paradigm within it.
“We were the new kids on the block. We still think of ourselves that way,” Rhind told me. “So in 2015, we raised what we called, our minimum viable fund—an ode to us being entrepreneurs first. Test things before you try to scale it. So, that was the $14 million fund back in 2015. If I were to take the pessimistic view of what's made Rhino successful, it’s that there was such a contrarian perspective back then to building a venture fund in Vancouver focused exclusively on Vancouver-based companies. That perspective is, I think, no longer contrarian,”
After experiencing success with a hyper-local model of investing, Rhino zoomed out. Rhino Fund II $33M was an early-stage fund that began deploying capital in 2018. It was built on the idea that the firm’s success in Vancouver could be replicated across Western Canada, a region ripe with talent according to Rhind. “There's still world-class entrepreneurs doing incredible things in the areas that are deserving of time and attention.”
The momentum continued to pick up, particularly closer to home. Rhino can boast of six exits and noteworthy companies in their portfolio include Vancouver successes Klue and Thinkific.
Partner David Hogarth, who joined Rhino in May, can be at least partially credited for Thinkific’s positioning within Rhino’s portfolio. Hogarth was working for CIBC but with a particular eye on the Vancouver tech scene. When Thinkific came across his radar, he connected with Rhino. All the WhatsApp messages and phone calls led to a connection not only between firm and company but between Hogarth and Rhind.
“He was pitching us relentlessly on Thinkific,” Rhind recalled. “But, he was doing it in a way more thoughtful way than a traditional way. Then, obviously, we decided with the management team to take Thinkific public. It was through that journey that we realized that this is a different kind of banker that we're dealing with and said, ‘You're too good for this role. Come on over, we're gonna do something a bit bigger.’”
With a laugh, Hogarth quipped that joining Rhino was an “adventure bet” before expanding on his move to the firm. “I've seen a lot of financial sponsor portfolio company dynamics. They often seem, at best, somewhat hierarchical, and, at worst, varying degrees of adversarial. This completely flipped on its head with Rhino and Thinkific. They're really treating each other as partners and ultimately, they're doing whatever they can to help the management teams be successful. It was more like a collaborative relationship. That approach to try to build something I found quite appealing,” he said.
Hogarth then painted a perfectly Canadian analogy for how it feels to see the success of the portfolio companies. “The way I look at it is, let's say you play on a fairly competitive hockey team. Your linemate gets drafted to the NHL. Finally, there’s worldwide recognition for how great your linemate was. It ultimately makes you look a little bit better, but you're obviously not in the spotlight,” Hogarth said.
NHL draftees are rewarded, initially, with a team hat and jersey on draft night. For portfolio companies, the gift is a silver rhino, the brainchild of community manager Candace Hobin. Larger victories, the Stanley Cup-equivalent milestones (to belabour the hockey metaphor), require celebrations of an appropriate scale.
Rhind says that this stays true to the firm’s core. “All that stuff is part of the secret sauce and part of the core ethos of us building these incredibly high trust relationships with founders.”
The team will continue to build these relationships through Rhino Fund III. The fund will remain sector agnostic and cover pre-seed through to Series A. Initial cheques will range from $500,000 to $5 million. The firm will also retain significant reserves for follow-on investments. Further, Rhino teased global investments. There are plenty more silver rhinos out there to be gifted, after all.