How to Exit in the North: Discussing Fintech Funding in Canada

Abstract: The 2024 Canadian Lenders Summit panel, “How to Exit in the North: Discussing Fintech Funding in Canada,” features a discussion with Michael Garrity, Chairman of Financeit and Venture Partner at Exit North Ventures, moderated by Tal Schwartz, Canadian fintech newsletter writer and general partner at Exit North Ventures. The conversation explores the challenges and strategies involved in raising capital for Canadian fintech companies. The panel emphasizes the unique resilience of Canadian entrepreneurs, the importance of disciplined spending, and how mentorship and strategic networks are essential to overcoming the obstacles of building and funding a fintech business in Canada.  👉 Check out the full video here.   👀  

Tal: I’m a general partner at Exit North Ventures, a Canadian fintech-focused venture fund that we publicly launched recently. I’m joined today by my good friend, Michael Garrity, Chairman of Financeit and a venture partner at Exit North Ventures. 

Michael: Financeit is Canada’s largest point-of-sale financing company for home improvement, with over 10,000 merchants offering our financing options. But let’s rewind to the early days—when we were just getting started, pitching investors. Back then, it was incredibly challenging.

Tal: What was that experience like? Can you tell us about those early days?

Michael: Sure. At the start, my first company idea was called “Community Lend,” which eventually evolved into Financeit. My wife was actually my first investor, and from there, I was on the hunt for angel investors—essentially begging and borrowing to get initial funding. We managed to raise $2.5 million in our first round, primarily from U.S.-based angels and some seasoned Canadian entrepreneurs who had exited previous companies and were eager to reinvest locally.

Tal: It sounds like you encountered significant hurdles along the way. How did you manage to overcome them?

Michael: The support from experienced investors was crucial. One early investor, a successful entrepreneur himself, convinced others not to pull their investments when Community Lend wasn’t working out. This support allowed us to pivot and ultimately transform the business into Financeit, focusing on point-of-sale lending for home improvements.

Tal: Fundraising in Canada can be challenging compared to Silicon Valley. How did that impact your strategy?

Michael: Raising capital in Canada requires resilience. Unlike Silicon Valley, where rapid growth is prioritized, Canadian investors tend to focus on unit economics and sustainable growth. There’s also a cultural emphasis on not failing—failure here is remembered, so you build resilience, which ultimately strengthens Canadian companies.

Tal: And how does this play into Exit North Ventures’ approach?

Michael: Exit North Ventures is designed to fill a gap in Canada’s early-stage funding ecosystem by connecting entrepreneurs with mentors who understand the landscape because they’ve been through it themselves. We believe that having experienced partners who can offer guidance during difficult times can make the difference between success and failure for these companies.

Tal: As someone who’s been on both sides—raising funds and now investing—what makes you optimistic about Canadian tech?

Michael: Canada produces incredibly resilient and skilled entrepreneurs. We have a strong education system, robust social infrastructure, and a stable banking environment, which gives our entrepreneurs a unique foundation. With proper guidance and capital, Canadian startups can achieve remarkable success.

Tal: Thank you for sharing your insights, Michael, and thanks to everyone for joining us today.  Check out the full video here.   👀  

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