Friday Interview with tech veteran Peter Schwartz

When I first met this week’s interview candidate back in 2000, Peter Schwartz was President & CEO of Descartes Systems Group (DSG:TSX). He was good enough to connect me with Lee Green, then CEO of Triple G Systems Group (TGG was eventually acquired by GE Medical); Lee became a member of Wellington Financial’s advisory council in 2003. The other debt I owe Peter is for the intro to Brian Mogg, one of the golf teacher/savant superstars of North America (unfortunately, he lives in Orlando).

After Descartes, Peter turned his entrepreneurial attention to a variety of interests, including venture capital, real estate development, and building a tech lending firm focused on SR&ED credits. If I had Peter’s copious amounts of energy and drive, I don’t doubt that our firm would be even more successful than it is today.

Here goes.

Question 1. Tell us a bit about Laurence Financial Services Corp., what part of the debt market are you addressing?

We are a vertical market lender, our first and largest market is technology where we offer a SRED financing program.

Question 2. With all of the firms and businesses you could be running, why did this attract you?

I really love working with entrepreneurs and this keeps me close to them. In particular we love being able to offer financing solutions that can really help them to improve their returns – in particular financing solutions that are not readily available to them from other sources.

Question 3. When you were raising capital in the early days at Descartes Group in the 90s, was debt even available for a growing technology company?

It was almost non-existent! This was frustrating for us given our revenue visibility and the value of our technology. We could have saved a lot of dilution had we had access to debt back in those days.

Question 4. With the benefit of hindsight as a company-builder, when does debt makes sense instead of equity for a tech CEO?

We like to think that every technology company should start by using as much debt as they can comfortably support and then supplementing their cash requirements with equity. Almost all will need equity – particularly growth companies so we believe that the typical scenario is a blend of both.

Question 5. In your travels you probably meet a lot of entrepreneurs, do you have a sense of the direction of the angel, seed and tech venture market in Canada?

It is an exciting time for all. With several new developing technology hotbeds in Canada, we hope the future direction will be to collaborate between the various providers of financing. Growth companies shouldn’t have to spend so much time figuring out what they should do with their balance sheets. We were fortunate to have great mentors and counsel around us, but for most it is very challenging to make sense of it all because the technology industry still is young and unstructured, the same financing standards and strategies that apply to other industries have only just started to be applied to the technology industry. We think it is time for the financial services industry to bring the same level of collaboration to this industry that exists in others.

Question 6. What’s the number one mistake that a CEO will make in his/her career?

Run out of money!

Question 7: What’s on your iPod?

Dude! Great question – My Chemical Romance, the New Linkin Park, some John Mayer (for my girls!), and the new Tom Cochrane CD No Stranger.

Thanks ever so much, Peter.

MRM