Venture capitalist Gregg Sedun, president and CEO of Vancouver-based Global Vision Capital Corp., talks with the Opportunist’s Managing Editor Leslie Stone about his career, what he looks for in prospective projects and which industry sectors he finds most promising.
Gregg Sedun is an independent venture capital professional and former corporate finance/mining lawyer with 29 years of industry-related experience. Throughout his career, companies in which he has been involved as a founding director, shareholder or senior executive have collectively created billions of dollars of gains for shareholders.
Opportunist: How did you become a venture capitalist?
Gregg: During my previous career as a corporate finance/mining lawyer, I was working with a number of different public companies. Diamond Fields Resources Inc. was one of them. This was a startup company of which I was one of the founding directors and within two years of start-up we discovered the massive Voiseys’ Bay nickel deposit, which ended up launching the company to great success and its eventual takeover for $4.3 billion. That allowed me to retire from the legal business, at which point I decided to get into venture capital and I have been doing it for the better part of the last 15 years.
Opportunist: What is your focus at Global Vision Capital Corp.?
Gregg: My focus is early stage opportunities that have very material reward potential to them. To put it in baseball parlance, I look to hit a home run or a grand slam on my investments but, of course, they do have risk. Projects must have the potential to be almost game changers because, in the early stages especially, you do have failures and situations that don’t work out as planned. I try, of course, to minimize that in a number of ways.
Opportunist: How so?
Gregg: First and foremost I believe is the importance of backing talented, smart people with high integrity. It really comes down to management and backing the jockey and I certainly put a lot of emphasis on that. We meet management and do our due diligence, and where possible we try to back people who have had some success in the past. In my business about 10 percent of the people create 90 percent of the wealth. Those are the ones you want to back but, of course, that is not always possible.
Like any project, it’s also important to look closely at the time and place in which you are entering the game. For example, if you got into the technology sector in the late 1990s, everything was working out. If you got in around, say 2001, it was almost sure to become a disaster—and there has been a 10-year-plus down cycle for the technology space since then.
Opportunist: What is your role at the company?
Gregg: I am the founder and CEO. I have had partners in the past, but now I do not because I like to do what I want to do when I want to do it—without all the restrictions, if you will, that come with other people’s involvement. I’m at that point in my life where I’d rather keep my business to a size that I can manage rather than try to expand by adding more partners. Some venture capital businesses are all about taking in more money and expanding their size and growth profile, which I completely understand. My life is not at that stage anymore. I am happy to say that I have achieved a sense of balance that lets me enjoy my life and do a fair amount of travel for both business and pleasure. I work with companies with projects in different parts of the world—from Africa to South America to Asia—and I feel my life and career are both at a good place.
Opportunist: Can you share some highlights from your overseas adventures?
Gregg: Sometimes when you’re dealing with early stage companies it takes you to different parts of the world and you have some bizarre encounters—such as having your passport taken away when you’re trying to get into a country so that it can be “approved.” You end up for days on end after that in negotiations with people to sell your passport back to you. [Laughs] There you are in a very high-risk country without a passport or any other way to essentially get out at that point. So, you have to buy back your own passport to just leave the country.
Opportunist: Can you tell us a little about some of your successes in the investing business?
Gregg: Well I mentioned Diamond Fields, which has to go down as almost unbeatable on a percentage return basis as our initial financing was done at $0.15 and the company was eventually taken over at more than $170--factoring in stock splits for about $4.3 billion. Adastra Minerals, which is another company we launched, was involved in mining in the Congo at one time. Adastra started out at $1 per share and went to $18 at one point and was eventually bought out for about $300 million. There have been others that have worked out well. Peru Copper was also a startup company of which I was one of the founding shareholders and which was sold for about $800 million. Those were some dynamic investments that worked out pretty well.
Opportunist: Which industry sectors do you find the most promising and can you mention some companies you like?
Gregg: We’ve certainly had a good run in the resource space (precious and base metals, oil etc.) over the last decade, but I don’t think that’s over by any means. When you look at the world’s financial condition—especially from Europe to North America—you see that a lot of countries are essentially printing money to dig themselves out of debt. Looking at world currencies, such as the U.S. dollar, the euro, the yen etc., those are currencies that were once pillars of strength that are no longer. In the long run that has to be good for gold.
I am the chairman of Goldgroup Mining Inc. (TSX: GGA), which is focused on gold production in Mexico. This company has a great growth profile as it significantly expands its production over the next year or two and puts its flagship project into production. Also, Oceanic Iron Ore Corp. (TSX.V: FEO) is another exciting company with substantial growth potential. It has a huge iron ore deposit in Northern Canada, which is one of the best countries in the world to be in. And, of course, iron ore is used to manufacture steel that is needed to fuel the growth in Asia, South America and other parts of the world.
The growth and urbanization of Asia and other parts of the world has resulted in significant movement of people from rural to urban areas. This has caused huge consumption of base metals (such as copper, zinc, nickel, iron ore, etc.) and other resources used to manufacture everything that people want in cities (all the things that we are fortunate enough to have), from cars, housing, cell phones, air conditioners, etc. There is a secular bull market, if you will, in the commodity space, although I believe it is in a corrective phase right now with all the debt problems in Europe. So, overall, this is a great place to be. I must, however, be somewhat of a contrarian in my business and look for the new places to invest. In Canada we are big into hockey. So, we must ask where is the puck going, not where is the puck right now? [Laughs]
Opportunist: What about the technology sector?
Gregg: Technology is my contrarian investment space. There has been a decade long bear market in this sector but we are slowly coming out of it, especially with the proliferation of social media successes like Facebook and LinkedIn. An example of a smaller company I founded as an investor is called Sweetrlife Technologies Inc., which has an exciting app soon to be released, called “Sweetr.”
Opportunist: Please tell us about it.
Gregg: With always on and always connected devices in our hands, I believe we are entering the next stage of social, that’s the intersection of social and mobile, or social discovery. Let me draw you a matrix.
In the top left of this matrix you’ve got Facebook, which is for managing your tight ties in the real world. That’s your offline friends and family, the people you already know. In the top right you have LinkedIn, which is where you manage your curriculum vitæ (cv), your business connections. Twitter is in the bottom left where you follow celebrity and brands, your key influencers as it were. That leaves the bottom right…that’s where we see Sweetr being the network for social discovery.
That is to say, Sweetr is for finding the people, places and experiences that you don’t already know, or have not already found and experienced. Connecting with strangers with shared interests, geography, or just for fun. We think social discovery could be as big as social networking in five years. So, watch for that company in the near future.
Opportunist: What advice do you have for others who are considering a similar career path?
Gregg: Getting an education and a discipline is a great way to start. Law incorporated with business is certainly a great combination, but it doesn’t have to be that. The key is to pursue your passions and work with quality, bright people. Don’t be afraid to be bold and reach out. I believe, in a sense, that’s one of the things that ultimately led to my success. When I was starting out I targeted people who emulated what I wanted to be in life. They became my mentors. I was very persistent and eager in pursuing my goals. It’s important to be aggressive and never doubt that you’re capable of achieving the things that you really want to do.
Opportunist: What objectives do you have for the coming year?
Gregg: First of all, I think we’ve got some very strong projects with Goldgroup Mining in Mexico that will be expanding into more significant production next year. This will throw off fairly significant cash flow, which will be used to make other acquisitions and, hopefully, build that into a much larger gold producing company. I believe Goldgroup is undervalued now and has a great future going forward. Also Oceanic Iron Ore will be advancing its large iron ore deposit by completing a pre-feasibility study later this year and Sweetrlife will be launching its social media app “Sweetr” as well.
Opportunist: What do you enjoy most about your work?
Gregg: I would definitely say meeting the people. Part of my business involves travel to some pretty interesting parts of the world—from Asia to Africa or down in Mexico—and I am always meeting people as part of that. In the finance community, whether you’re in New York or London or Toronto, you’re constantly meeting new people as well and, of course, we have great people in our office and our companies.
Also, it’s almost like a game where you’re searching for the next big opportunity. Fortunately, I have been involved in some that have worked out quite well for my shareholders and for myself. Trying to find that next home run is a big part of my business.
Opportunist: Where do you see yourself in five years?
Gregg: Hmm. In five years I may or may not be doing this on the same scale, but I will definitely keep my head in the investing and venture capital business on maybe a somewhat reduced basis. I think I’ll just continue to do as much as interests me at the time. I know that’s kind of a vague answer but I’m not in a massive expansion mode on my business, so I will just move it along until it’s no longer fun and interesting.
Leslie Stone is an award-winning writer/editor with more than two decades of experience covering business, finance and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides in the Orlando area.