Kent Thexton steps down as ScaleUP Ventures GP to become CEO of Sierra Wireless...
Oct 16, 2018
ScaleUP Ventures (SUV) and Sierra Wireless both announced today that founding general partner Kent Thexton has stepped down from the role to become CEO and president of the Vancouver-based wireless communications equipment manufacturer. Thexton will remain an SUV board member and advisor. The transition comes smack in the middle of the Toronto-based VC firm’s first fund, which initially closed at $100 million in September 2017 before stretching to a final tally of $106 million. Chair of Sierra’s board and a board member since 2006, Thexton stepped in as interim-CEO in June. Thexton had been operating in a paired role at SUV and Sierra Wireless. Chair of Sierra’s board and a board member since 2006, Thexton stepped in as interim-CEO in June, managing the day-to-day affairs of the business while the board pursued a full-time replacement. The board then surprised him with a full-time offer a few weeks ago. According to SUV’s other founding general partner Kevin Kimsa, Thexton had been splitting his weeks between Sierra and the VC firm over the summer, managing his existing investment portfolio but not looking at new deals. While not as dramatic as other recent high-profile VC departures , the official transition offer “was a surprise to all parties, including Kent,” he said. “There was no plan for him to do this – the interim role was designed to be interim.”
Kimsa rejected any notion that Thexton’s departure would torpedo the fund, noting that SUV had originally planned for Fund I to have three partners, but ended up with four following the addition of Vancouver-based Derek Spratt in June 2017 (disclosure: frequent CanCon podcast panelist Matt Roberts is SUV’s other partner). SUV will distribute Thexton’s portfolio amongst its remaining partners. “We have a depth chart that’s quite appropriate for the fund’s activity,” Kimsa said. “Operationally, Fund I is fine.”
Part of the reason for that is SUV’s approach to portfolio management, which sees a lot of cross-management and support of its investments rather than a siloed model. Kimsa, for example, often meets with SUV’s investments when it’s time to talk KPIs. “We’re kind of fortunate that we have a multi-dimensional interface for all of our portfolio companies – they know more than the one partner that led the deal [at SUV],” he said. SUV will be “aggressive and methodical in our approach to getting a new GP,” Kimsa said. SUV also has its Executive Leadership Council to lean on, which includes the CEOs of RBC, Scotia, TD, as well as the ‘big three’ carriers. The Council, which Thexton will now join as CEO of Sierra, offers SUV portfolio companies access to these leaders for mentors, as well as a sales and investment pipeline if the pairing is right. “That’s where our portfolio companies get to leverage the experience of these institutions, whether anybody does investments or not,” Kimsa said. Kimsa did note that SUV would be adding a new GP to replace Thexton, which will likely be an external addition over an internal promotion. SUV will be “aggressive and methodical in our approach to getting a new GP,” he said, hoping to have the role filled by early 2019. The timing coincides nicely with the fundraising timetable for SUV’s Fund II, which Kimsa placed between Q3 and Q4 of 2019. It’s a safe bet that the VC firm will choose someone with a network and relationships that overlap with SUV’s LP targets for Fund II. While Kimsa maintained that everything remains on course for SUV, the general partner acknowledged the reality that he had just lost his co-founder in the middle of their first fund. “It’s a lot for sure,” he said. “Kent and I go back 20 years as friends, and we’ll continue to be friends. “I look at it as an opportunity,” Kimsa continued. “Kent will still be involved, we’ll be adding a new GP, and then we’ll have Kent and a great new GP.”
“I believe once we get the transition complete we’ll be perfectly well-equipped to carry out [SUV chair] Nadir Mohamed’s vision for a VC firm tying corporate Canada in more effective ways to the tech ecosystem.”